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Corporate Taxation under Weak Enforcement

By Pierre Bachas and Mauricio Soto

American Economic Journal: Economic Policy, November 2021

How should developing countries tax corporate income? We study this question in Costa Rica, where firms face higher average tax rates on profits when revenues marginally increase. We combine discontinuity and bunching designs to estimate the elasticity of...

Democracy and Aid Donorship

By Angelika J. Budjan and Andreas Fuchs

American Economic Journal: Economic Policy, November 2021

Almost half of the world's states provide bilateral development assistance. While previous research takes the set of donor countries as exogenous, this article introduces a new dataset on aid giving that covers all countries in the world, both rich and po...

Disclosure and Subsequent Innovation: Evidence from the Patent Depository Library Program

By Jeffrey L. Furman, Markus Nagler, and Martin Watzinger

American Economic Journal: Economic Policy, November 2021

How important is access to patent documents for subsequent innovation? We examine the expansion of the USPTO Patent Library system after 1975. Patent libraries provided access to patents before the Internet. We find that after patent library opening, loca...

Urban Water Disinfection and Mortality Decline in Lower-Income Countries

By Sonia R. Bhalotra, Alberto Diaz-Cayeros, Grant Miller, Alfonso Miranda, and Atheendar S. Venkataramani

American Economic Journal: Economic Policy, November 2021

Historically, improvements in municipal water quality led to substantial mortality decline in today's wealthy countries. However, water disinfection has not consistently produced large benefits in lower-income countries. We study this issue by analyzing a...

Why Are Relatively Poor People Not More Supportive of Redistribution? Evidence from a Randomized Survey Experiment across Ten Countries

By Christopher Hoy and Franziska Mager

American Economic Journal: Economic Policy, November 2021

We test a key assumption underlying seminal theories about preferences for redistribution, which is that relatively poor people should be the most in favor of redistribution. We conduct a randomized survey experiment with over 30,000 participants across 1...

Do Value-Added Taxes Affect International Trade Flows? Evidence from 30 Years of Tax Reforms

By Youssef Benzarti and Alisa Tazhitdinova

American Economic Journal: Economic Policy, November 2021

This paper uses all value-added tax (VAT) changes across EU Member States from 1988 to 2016 to estimate the effect of VATs on trade flows. We find small elasticities of trade flows with respect to VATs, even when VAT changes are large. These elasticities ...

Market Power and Income Taxation

By Louis Kaplow

American Economic Journal: Economic Policy, November 2021

This article analyzes concerns about market power and inequality in a model with multiple sectors, heterogeneous abilities, endogenous labor supply, and nonlinear income taxation. Proportional markups with no profit dissipation have no effect on the econo...

The Effects of the 1930s HOLC "Redlining" Maps

By Daniel Aaronson, Daniel Hartley, and Bhashkar Mazumder

American Economic Journal: Economic Policy, November 2021

This study uses a boundary design and propensity score methods to study the effects of the 1930s-era Home Owners Loan Corporation (HOLC) "redlining" maps on the long-run trajectories of urban neighborhoods. The maps led to reduced home ownership rates, ho...