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Tax Evasion and New Types of Assessment: An Introduction to Economic Analysis

Scholarship Abstract Tax evasion is still widespread around the world, among the most advanced countries too. Its level in Italy is comparatively very high, as it . . .

Abstract

Tax evasion is still widespread around the world, among the most advanced countries too. Its level in Italy is comparatively very high, as it is commonly recognized. This essay offers a broad non-technical outline of the main topics concerning tax evasion, from the economist’s point of view. The first section introduces the paper, summarizes its main contents, and depicts the basic conclusions and suggestions. The second section is devoted to a critical survey of existing empirical estimates on evasion magnitude, both in Italy and in other Western countries. Some figures on tax evasion consequences in Italy are then briefly discussed. The third section focuses on individuals’ decision to evade, inside the framework built on the classical grounds of Allingham-Sandmo’s (A/S) model. It scrutinizes A/S model’s hypotheses and implications and finally introduces some other factors which may prove relevant for the decision to evade taxes. According to this framework, the fourth section analytically derives the main properties of new audit procedures, recently adopted or proposed in Italy

NOTE: The paper is in Italian. 

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Financial Regulation & Corporate Governance

Understanding World Trade

Popular Media Even the smallest economic factor can scarcely escape the effects of global commerce today. For example, a local tomato farmer may be competing with foreign . . .

Even the smallest economic factor can scarcely escape the effects of global commerce today. For example, a local tomato farmer may be competing with foreign imports directly, exporting her produce abroad, or simply selling her tomatoes in a domestic market where the prevailing price is determined in part by the availability of competing foreign products. And it is not simply commercial activity that has an international flavor. Laws enacted in one country to protect the environment, labor standards, and competitive markets invariably affect citizens or governments of other countries.

Read the full piece here.

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Financial Regulation & Corporate Governance

Elementary and Persistent Errors in the Economic Analysis of Intellectual Property

Scholarship Abstract The literature on the economic analysis of intellectual property rights evidences a broad scholarly consensus on a number of central and important issues. First, . . .

Abstract

The literature on the economic analysis of intellectual property rights evidences a broad scholarly consensus on a number of central and important issues. First, intellectual property rights enable economic actors to capture some of the benefits of the investment they make in establishing a good reputation, creating expressive works, and inventing new and improved technology. Absent intellectual property rights, copiers are free to take for themselves a significant part of the economic benefit generated by these types of investment and to undermine the incentive to make these in- vestments in the first place. Second, the investment activities induced by intellectual property rights-developing a positive reputation with consumers, creating expressive works that consumers want to read, view, or hear, and developing improved technology- are efficient investments up to the point that consumers are willing to pay for their fruits. Third, a decentralized system of incentives such as that created by a system of intellectual property rights will over time produce results better preferred by consumers than will any kind of centrally directed subsidy system. Fourth, intellectual property rights systems have costs, costs involved in identifying, defining and enforcing the subject matter of the rights. Fifth, the intellectual property regimes of the United States, in particular, and of the developed economies are, as a general matter, economically sensible, no matter what particular details may concern a particular author. Even Justice Stephen Breyer, that once youthful Harvard skeptic, has said that the issue is not whether to have intellectual property rights, but what form they should take.

Scholars made considerable progress over the last century understanding the economics of intellectual property rights. Yet, much remains to be done. There is ample room for additional progress in the literature. Indeed, it seems likely that this progress will result in part from the work of the scholars who assembled for this conference.

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Intellectual Property & Licensing

Property Rights and Property Rules for Commercializing Inventions

Scholarship Abstract Several recent commentators have criticized trends in the patent system by suggesting that the goals of the system can be better achieved through a . . .

Abstract

Several recent commentators have criticized trends in the patent system by suggesting that the goals of the system can be better achieved through a variety of approaches that avoid or mitigate the monopoly-type impact of property rights. Suggested alternatives include the use of cash rewards, buy-outs, and liability rules, as distinct from property rules. This paper uses the important contributions made by these commentators to reveal shortcomings in any view of the patent system that focuses only on incentives to engage in inventive activity. The paper offers a new view of the patent system that embraces property rights and property rules as core elements of the patent system. According to this view, property treatment is essential for the subsequent commercialization activity that is necessary to get embodiments of nascent inventions into the hands of consumers and for efficiently identifying which inventions are worth the costs of government intervention in the first instance. The recently suggested alternatives fail to address these important goals of the patent system and would actually frustrate them. In addition, the current system already addresses many of the concerns raised by such commentary. The paper reveals how property rights and commercialization motivated the creation of our current patent system and explains many controversial trends in the system, including those that sparked the recent critical commentary, as well as those in other intellectual property regimes such as trademarks.

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Intellectual Property & Licensing

Agency Costs and the Oversight of Charitable Organizations

Scholarship This article uses property rights theory and the theory of the firm to analyze the behavior of the participants in nonprofit organizations. It locates the failure of nonprofit oversight in the confluence of strict standing rules and nearly insurmountable agency costs.

Summary

This article uses property rights theory and the theory of the firm to analyze the behavior of the participants in nonprofit organizations. It locates the failure of nonprofit oversight in the confluence of strict standing rules and nearly insurmountable agency costs. The article repudiates the conventional solutions to the problem (ranging from relaxing standing limitations to restricting the use of the nonprofit form), and proposes a contractual solution through which nonprofits or their founders would secure the services of a set of independent agents to monitor and, where appropriate, enforce the nonprofit’s charter and the relevant fiduciary rules through judicial action. Because the monitoring agents would function within a market framework, market controls should operate to constrain the behavior of these agents. Thus donors, philanthropists, and beneficiaries would receive the benefit of effectively monitored corporate (or trust) agents who do not present a significant agency cost problem. The result should be increased accountability on the part of nonprofit agents to their donors or patrons without the serious threat of frivolous suits or politically-selective attorney general enforcement.

 

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Financial Regulation & Corporate Governance