Carlos Scartascini

Inter-American Development Bank | IDB · Research Department

Punitive anti-crime policies in the Americas have contributed to steadily increasing rates of incarceration. Harsh penalties are often demanded by citizens, making them attractive to politicians. Yet the contextual determinants of participation in crime are rarely understood by the public. In this article, we employ a survey experiment conducted in...

Participatory programs can reduce the informational and power asymmetries that engender mistrust. These programs, however, cannot include every citizen. Hence, it is important to evaluate if providing information about those programs could affect trust among those who do not participate. We assess the effect of an informational campaign about these...

Telemedicine can expand access to health care at relatively low cost. Historically, however, demand for telemedicine has remained low. Using administrative records and a difference‐in‐differences methodology, we estimate the change in demand for telemedicine experienced after the onset of the COVID‐19 epidemic and the imposition of mobility restric...

Anti-crime policy is often unresponsive to reductions in crime. To address why, we provide a model and empirical test of how citizens’ anti-crime policy preferences respond to information. Our model shows that preferences for anti-crime policy hinge on expectations about the crime rate: punitive policies are preferred in high crime contexts, wherea...

We examine whether public spending misallocations may reflect voter demand factors such as political and interpersonal trust or risk and time preferences. A model of voter preferences over public spending tradeoffs provides individual-level testable hypotheses. The data come from an original survey that offered voters in seven Latin American countr...

Trust is the most pressing and yet least discussed problem confronting Latin America and the Caribbean. Whether in others, in government, or in firms, trust is lower in the region than anywhere else in the world. The economic and political consequences of mistrust ripple through society. It suppresses growth and innovation: investment, entrepreneur...

Environmental policies are characterized by salient short-term costs and long-term benefits that are difficult to observe and to attribute to the government's efforts. These characteristics imply that citizens’ support for environmental policies is highly dependent on their trust in the government's capability to implement solutions and commitment...

Most tax agencies use letters as the method of communicating with taxpayers. Still, other technologies exist that could be more effective. This paper reports the results of a field experiment conducted by the National Tax Agency of Colombia (DIAN), using phone calls to reduce tax delinquencies. DIAN randomly assigned 34,000 tax debtors to a phone c...

Diagnostic and contact tracing apps are a needed weapon to contain contagion during a pandemic. We study how the content of the messages used to promote the apps influence adoption by running a survey experiment on approximately 23,000 Mexican adults. Respondents were randomly assigned to one of three different prompts, or a control condition, befo...

Positive inducements and rewards have become a popular tool of tax administrations around the world. Yet, evaluation of the impact of rewards has been mostly absent from the empirical literature on tax compliance. In this paper we evaluate the effect of positive rewards on property tax compliance by exploiting a natural experiment in which a munici...

Crime is a major problem in Latin America and the Caribbean. With 9 percent of the world's population, the region accounts for 33 percent of global homicides. Using new, extensive survey data, we endeavor to identify what anti-crime policies citizens in the region demand from their governments. We also analyze who is demanding what and why. We find...

We present the results of a survey experiment designed to evaluate the effects of social media exposure on perceptions of personal health and job risks during the COVID-19 pandemic in Mexico. Our framing experiment treats respondents to positive and negative partisan messages from high-level politicians. Descriptive findings show divergent evaluati...

We present the results of a survey experiment designed to evaluate the effects of social media exposure on perceptions of personal health and job risks during the COVID-19 pandemic in Mexico. Our framing experiment treats respondents to positive and negative partisan messages from high-level politicians. Descriptive findings show divergent evaluati...

The Database of Political Institutions presents institutional and electoral results data such as measures of checks and balances, tenure and stability of the government, identification of party affiliation and ideology, and fragmentation of opposition and government parties in the legislature. The current version of the database expands its coverag...

While effective preventive measures against COVID-19 are now widely known, many individuals fail to adopt them. This article provides experimental evidence about one potentially important driver of compliance with social distancing: social norms. We asked each of 23,000 survey respondents in Mexico to predict how a fictional person would behave whe...

This paper explores the structure of party competition across democratic nations and its impact on the size and composition of government spending. The analytical framework expands on the norm of universalism, applies it to multi-party legislatures, and develops several propositions. We examine these propositions empirically using panel data for tw...

Recent increases in uncivil dialogue, political polarization, and fake news in social media raise questions about the relationship between negative online messages and the decline in political trust. We implement a trust game in a survey experiment with 4,800 respondents in Brazil and Mexico. Our design models the effect of social media on trust an...

Este documento ofrece una guía práctica para el diseño de comunicaciones e intervenciones informadas por la economía del comportamiento con el fin de contener el contagio de la COVID-19. ¿Cómo y con qué materiales hay que comunicar para contrarrestar los profundos sesgos de comportamiento que todos tenemos y que se acentúan en situaciones de estrés...

High levels of trust, both interpersonal and in institutions, are fundamental for fostering inclusive growth. Trust affects growth directly. However, trust is affected by a number of factors one of which is the distribution of income and wealth in a society, particularly when that distribution is not perceived as legitimate. Societies with higher l...

High levels of trust, both interpersonal and in institutions, are fundamental for fostering inclusive growth. Trust affects growth directly. However, trust is affected by a number of factors one of which is the distribution of income and wealth in a society, particularly when that distribution is not perceived as legitimate. Societies with higher l...

La confianza facilita las transacciones entre las personas, las empresas y los gobiernos. Desafortunadamente, ha ido disminuyendo en el mundo y en la región, y ha aumentado los costos operativos, impidiendo que los recursos sean canalizados hacia el uso más eficiente posible, reduciendo así la actividad económica. Este capítulo explora la relación...

Trust facilitates transactions between individuals, firms, and governments. Unfortunately, it has been on the decline in the world and in the region, increasing transaction costs, preventing resources from flowing to their most efficient use, and reducing economic activity. This chapter explores the relationship between trust and inclusive growth a...

Do voters punish governments that introduce fiscal “austerity” measures? If so, does voter response vary according to the composition of fiscal adjustments? The empirical literature on the political economy of fiscal adjustments, which is mostly OECD-based, argues that consolidations do not have significant electoral consequences. In contrast, we f...

Del confinamiento a la reapertura: Consideraciones estratégicas para el reinicio de las actividades en América Latina y el Caribe en el marco de la COVID-19

Con miles de casos nuevos y muertes confirmadas a diario en todo el mundo, el nuevo coronavirus y la enfermedad que provoca, COVID-19, está impactando todos los rincones del planeta. Para detener el contagio, así como para manejar el pánico, evitar la falta de cuidado personal y en su debido momento retornar paulatinamente a la vida normal, es fund...

Com milhares de novos casos e óbitos confirmados diariamente em todo o mundo, o novo coronavírus e a doença que ele provoca, a Covid-19, estão afetando os quatro cantos do planeta. Para deter o contágio, bem como administrar o pânico, evitar a falta de cuidados pessoais e, no devido tempo, retomar gradualmente a vida normal, é essencial que as ferr...

Behavioral insights are becoming part of the policy toolkit in countries around the world, and the IDB has positioned itself at the forefront of this movement in Latin America and the Caribbean. This policy brief discusses some of the reasons behind its success and serves as an encouragement for policymakers in the region to adopt some of these too...

Sending messages and providing information to individuals tends to affect their behavior (e.g., reduce energy consumption, increase donations, reduce tax evasion). Most studies to date have concentrated on evaluating the effect of different types of messages but they have avoided discussing if the method to communicate those messages could affect t...

Parecerían existir diferencias sustanciales entre lo que los consumidores responden en una encuesta y lo que ellos deciden cuando se enfrentan a una decisión de consumo concreto. Frente a igual calidad, precio y prestaciones, 8% de los argentinos dice elegir el producto importado. Cuando se bajó 10% el precio del bien importado, eso provocó una sel...

El BID y la implementación de las políticas públicas usando las herramientas de la economía del comportamiento

La economía del comportamiento puede incrementar la moral tributaria a través de la aplicación de principios como la disuasión, la reciprocidad o el efecto de los pares.

¿Cómo explotar el potencial del deporte como herramienta de cambio? ¿Qué características deben tener los programas de deporte para el desarrollo? ¿Qué está funcionando? Este capítulo intenta dar respuesta a estas preguntas examinando la evidencia existente sobre el impacto del deporte en el desarrollo, en general, y más específicamente en el desarr...

When the tax authority increases the enforcement for one tax, what happens to the level of compliance in other taxes (spillover effect)? In this paper, we present a simple analytical model that shows that the sign of the spillover depends on how taxpayers update their beliefs about penalties and detection probabilities for one tax after observing t...

The Political Economy of Taxation in Latin America - edited by Gustavo Flores-Macías June 2019

Limited attention affects our ability to make good choices, but governments can improve decision-making by providing simpler and more salient information. We evaluate the role of inattention in decision-making in the context of a field experiment implemented during a tax amnesty in the city of Santa Fe (Argentina). Tax amnesties are advertised to d...

Does providing information improve citizens' perception about government transparency? Does all information matter the same for shaping perceptions about the government? This paper addresses these questions in the context of an online randomized survey experiment conducted in Argentina. Results show that providing information to citizens matters fo...

This volume documents a pattern of spending policies in Latin America and the Caribbean in which governments leave money on the table: spending inefficiencies that, if removed, would allow governments to provide more and better services to more citizens. These inefficiencies pose a difficult puzzle: since citizens in these countries elect their gov...

Este volumen analiza un patrón de las políticas de gasto de América Latina y el Caribe de acuerdo con el cual los gobiernos desperdician dinero, es decir, hay ineficiencias del gasto que, en caso de ser eliminadas, permitirían a los gobiernos prestar más y mejores servicios a una mayor cantidad de ciudadanos. Estas ineficiencias plantean un dilema...

The Database of Political Institutions presents institutional and electoral results data such as measures of checks and balances, tenure and stability of the government, identification of party affiliation and ideology, and fragmentation of opposition and government parties in the legislature, among others. The current version of the database, whic...

The IDB has been supporting Sports-for-Development (SFD) initiatives in Latin America and the Caribbean since 2004. This document reviews IDB-sponsored initiatives in 18 countries to shed light on what works and doesn’t work. Given the importance of designing programs right to avoid unintended consequences, increasing data collection and analysis i...

Innovations for increasing tax compliance in Latin America

Innovative Methods to Improve Tax Compliance and Subnational Fiscal Management

Countries with different levels of state capacity have access to different sets of policies. In particular, countries with strong state capabilities are able to draw from a broader menu of policies than countries with lower capabilities. We apply and test this insight to the case of exposure to trade-related risk. So far, most of the literature has...

This paper evaluates the effect of positive inducements on tax behavior by exploiting a natural experiment in which a municipality of Argentina randomly selected 400 individuals among more than 72,000 taxpayers who had complied with payment of their property tax. These individuals were publicly recognized and awarded the construction of a sidewalk....

This paper examines whether elections, which are generally held on fixed dates, and banking crises explain the timing of tax reforms and the allocation of the additional tax burden. Using an original fine-grained data set of tax reforms, the paper finds support for the role of these two sources of variation. In particular, the probability of reform...

This article explains variations in levels of institutionalization across legislatures of the world. It construes institutionalization as an equilibrium outcome that emerges from beliefs and investments made by political actors. Drawing insights from work on US congressional institutionalization and congressional organization, and on comparative pa...

When studying the politics of taxation it is important to evaluate changes to the tax code in terms of rates, bases, and exemptions instead of just revenues. With that objective in mind, we have compiled a more comprehensive database of tax reforms for Latin America. In this article, we present a description of the database as well as the stylized...

DPI2015 extends DPI2012 through 2015, adding data for the years 2013, 2014, and 2015. Corrections for this round of DPI updates cover 70 different countries and 72 different variables. Most of the changes were to the party age variables (particularly EXECAGE, with 76 countries changed, and GOV1AGE, with 40 countries changed). All in all, 711 values...

Do crises really lead to more institutional reforms? This paper explores the con- nection between nancial crises and one type of reform frequently advocated during the recent global nancial crisis, namely, scal institutional reforms. Some authors expect that crises lead to reforms, but we demonstrate that the relationship is not so straightforward....

¿Por qué algunos programas sociales tienen éxito y otros no? Porque las políticas públicas no se diseñan y ejecutan en el vacío: son parte fundamental del juego político. Con este libro se intenta ayudar a entender cómo funciona el proceso decisorio en la realidad analizándolo con un nuevo lente metodológico en el que se combinan el análisis de red...

We exploit unique features of a recently introduced tariff schedule for natural gas in Buenos Aires to estimate the short-run impact of price shocks on residential energy utilization. The schedule induces a non-linear and non-monotonic relationship between households' accumulated consumption and unit prices, thus generating exogenous price variatio...

There is an ample literature on the determinants of tax compliance. Several field experiments have evaluated the effect and comparative relevance of sending deterrence and moral suasion messages to taxpayers. The effect of different delivery mechanisms, however, has not been evaluated so far. This study conducts a field experiment in Colombia that...

This paper examines whether elections, which are generally held on fixed dates, and banking crises explain the timing of tax reforms and the allocation of the additional tax burden. Using an original fine-grained dataset of tax reforms, the paper finds support for the role of these two sources of variation. In particular, the probability of reform...

Las respuestas a las políticas públicas están mediadas por la forma en que se presentan esas políticas, y por las capacidades cognitivas y computacionales, y las creencias subjetivas de las personas. Por lo tanto, políticas que parecen acertadas desde el punto de vista técnico pueden no tener el efecto esperado cuando se llevan a la práctica si req...

There is growing evidence that individual responses to public policies are, to a large extent, mediated by the way the policies are framed, by people’s cognitive and computational capabilities, and by people’s subjective beliefs. For example, people may react to price changes but not to complicated schemes that rely on people’s computational abilit...

The opinions presented here are entirely those of the authors and thus do not necessarily represent the official position of the institutions they belong to or the countries they represent. For more information about the material discussed in this presentation visit www.cscartascini.org

According to an influential theoretical argument, presidential systems tend to present smaller governments relative to parliamentary countries because the separation between those who decide the size of the fiscal purse and those who allocate it creates incentives for lower public expenditures. In practice, however, presidential and parliamentary c...

The literature has identified that countries with higher levels of openness tend to present a larger government sector as a way to reduce the risks to the economy that openness entails. This paper argues that there are a number of policies that can mitigate trade-induced risks, many of which do not have the necessary implication of increasing publi...

Most policy analyses and academic papers deal with finding the combination of policies that may bring about the best development outcomes. However, in the long run, it is the features of public policies that seem to matter for explaining development outcomes. Unfortunately, Latin America and the Caribbean lags behind other regions in the quality of...

La mayoría de los análisis sobre los resultados de las políticas públicas y los trabajos analíticos intentan encontrar la combinación de políticas que puedan producir los mejores resultados para el desarrollo. Sin embargo, a la larga, lo que al parecer importa para explicar los resultados de desarrollo no son tanto las especificidades de una políti...

This article proposes a research agenda for the organization of the executive branch in Latin America by reviewing the literature on the U.S. and Latin American presidencies and outlining the research gap between them. The study finds that while strong, regionwide patterns have been established about cabinets in Latin America, research is lagging b...

Tax evasion is a pervasive problem in many countries. In particular, some developing countries do not collect even half of what they would if taxpayers complied with the written letter of the law. The academic literature has not been oblivious to the need to explain why people pay (or do not pay) taxes. However, the empirical literature has not yet...

This policy brief takes stock of the research on government capabilities undertaken at the Inter-American Development Bank, highlights the relevance of government capabilities for generating better policies and higher levels of development, summarizes what has been learned about the origins of those capabilities, suggests avenues for further explor...

The literature on taxes and public finance generally focuses on revenues, an easily observable and generally available variable, as the observable measure of tax policy. Still, revenues depend on many determinants other than the political will and policy objectives of the government. It is therefore important, when studying the politics of taxation...

Why does personal income taxation (PIT) remain relatively low in many developing countries despite a period of democratic advancement and rapid economic growth? This stylized fact is hard to reconcile with standard political economy models of taxation that expect democratic regimes to bring about redistribution in countries that suffer from high in...

The capacity to sustain policies over time and the capacity to adjust policies in the face of changing circumstances are two desirable properties of policymaking systems. Veto player theory, a very influential approach in comparative politics, has suggested that polities with more veto players will have the capacity to sustain policies at the expen...

This paper addresses an important source of variation within democracies – the degree of institutionalization. The concept of institutionalization describes the extent to which politics takes place, and is believed to take place, via formal political institutions. Countries vary in their degree of institutionalization, hence, in the degree to which...

According to an influential theoretical argument, presidential systems tend to present smaller governments because the separation between those who decide the size of the fiscal purse and those who allocate it creates incentives for lower public expenditures. In practice, forms of government vary greatly, and budget institutions -the rules accordin...

This paper proposes an agenda for the study of the determinants and the processes by which strong policymaking institutions emerge, with emphasis on the most central democratic institution: the legislature. It reviews extant theories of institutionalization, and proposes further ways of specifying and studying the concept. It emphasizes the notion...

Given current evidence of potential tangible benefits, in terms of public expenditure sustainability, efficiency and effectiveness, from more efficient utilization of budgeting for results, how can we explain the uneven development of this process in Latin America and the Caribbean? This paper analyzes the conditions that favor its implementation (...

This paper argues that institutionalization is an equilibrium phenomenon and is associated with better policies and better results in terms of economic development. In support of this argument is presented a theoretical model that extends the space of feasible actions for political actors, including the possibility of investing in both institutiona...

Analysts and practitioners have always searched for policy recipes to solve the economic and social problems of developing countries. The last "universal recipe" recommended and adopted throughout Latin America were the market-oriented reforms of the 1990s. The varied and less-than-stellar performance that ensued have redirected intellectual attent...

The presidential politics literature depicts presidents either as all-powerful actors or figureheads and seeks to explain outcomes accordingly. The president and the executive branch are nonetheless usually treated as black boxes, particularly in developing countries, even though the presidency has evolved into an extremely complex branch of govern...

Personal income taxation remains relatively low in many developing countries despite recent democratic advancement and rapid economic growth; this is hard to reconcile with standard political economy models of taxation. This paper argues that the details of political institutions help to explain these low levels of personal income taxation. In part...

The requirements and regulations for starting a company vary widely across the world. While in some countries companies can start operations in a few days and after spending a small amount of money, it takes more than a hundred days and hundreds of dollars to start a business in other parts of the world. Previous literature has found that the grabb...

Government intervention in the construction sector as a way to boost the economy has been a constant in Colombia for the past 90 years. This paper explicitly tests the impact of the most recent of such interventions: a subsidy to the mortgage interest rate. The results show that the subsidy boosted mortgage loans by around 38 percent. However, it i...

This paper exploits unique features of a recently introduced tariff schedule for natural gas in Buenos Aires to estimate the short-run impact of price shocks on residential energy utilization. The schedule induces a non-linear and non- monotonic relationship between households’ accumulated consumption and unit prices, thus generating an exogenous s...