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Cited by 277Taxation and Compliance StudiesLocal Government Finance and DecentralizationEconomic and Fiscal Studies

The DOI matches its Crossref record; 49 of the 50 references it cites were found in a registry or an index.

Tax farming redux: experimental evidence on performance pay for tax collectors

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Khan, Adnan Q., Khwaja, Asim I., Olken, Benjamin A.·2016·The Quarterly Journal of Economics
DOI 10.1093/qje/qjv042
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Abstract

Abstract Performance pay for tax collectors has the potential to raise revenues, but might come at a cost if it increases the bargaining power of tax collectors vis-à-vis taxpayers. We report the first large-scale field experiment on these issues, where we experimentally allocated 482 property tax units in Punjab, Pakistan, into one of three performance pay schemes or a control. After two years, incentivized units had 9.4 log points higher revenue than controls, which translates to a 46% higher growth rate. The scheme that rewarded purely on revenue did best, increasing revenue by 12.9 log points (64% higher growth rate), with little penalty for customer satisfaction and assessment accuracy compared to the two other schemes that explicitly also rewarded these dimensions. The revenue gains accrue from a small number of properties becoming taxed at their true value, which is substantially more than they had been taxed at previously. The majority of properties in incentivized areas in fact pay no more taxes, but instead report higher bribes. The results are consistent with a collusive setting in which performance pay increases collectors’ bargaining power over taxpayers, who have to either pay higher bribes to avoid being reassessed or pay substantially higher taxes if collusion breaks down.

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Research works printed but not linked: 1

  1. City of Cambridge, 2014, Annual Budget 2014–2015

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Metadata

Authors
Khan, A. Q., Khwaja, A. I., & Olken, B. A.
Affiliations
London School of Economics and Political Science (GB)
ORCID
Olken, Benjamin A.
Venue
The Quarterly Journal of Economics
Publisher
Oxford University Press (OUP)
Published
2015-10-01
Volume
131
Issue
1
Pages
219-271
ISSN
  • 0033-5533 (ISSN-L)
  • 1531-4650
DOI
10.1093/qje/qjv042
OpenAlex
W1592605479
Cited by
267
References
50
Citations by year
2026: 14 · 2025: 17 · 2024: 28 · 2023: 31 · 2022: 31 · 2021: 40 · 2020: 31 · 2019: 21 · 2018: 13 · 2017: 24 · 2016: 10 · 2015: 4
FWCI
49.10
Type
journal article
Language
en
Open access
Locations
  • The Quarterly Journal of Economics (publishedVersion)
  • London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (acceptedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • HighWire Press Open Archive (submittedVersion)
Funders
National Science Foundation (1124134)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Taxation and Compliance Studies
  • Social Sciences › Political Science and International Relations › Local Government Finance and Decentralization
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Fiscal Studies
Keywords
tax farming, performance-based pay, tax collectors, property tax, tax revenue, bribery, collusion, bargaining power, customer satisfaction, Punjab, Pakistan

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