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Séminaire du leo du jeudi 12 septembre : Gerhard Toews Du 12 septembre 2019 16h00 au 12 septembre 2019 17h20 | Salle des thèses

Attention au changement exceptionnel de jour.

Gerhard Toews (New Economic School Moscow) présentera un article intitulé "Weak Institutions and Relational Taxation: Evidence from the Oil & Gas Industry" au séminaire de recherche du LEO, le jeudi 12 septembre 2019 de 16h à 17h20, salle  des thèses. Cet article est co-écrit avec Radek Stefanski et Marta Troya-Martinez.

Abstract:

Evidence from the Oil & Gas IndustryInternational contracts are difficult to enforce, especially in coun-tries with weak institutions. Thus, oil rich countries can hold upinternational oil firms by renegotiating taxes once the investmentis sunk. If future gains from trade exist, countries can devise aself-enforcing agreement instead. We use elections to show thatgovernments in countries with weak institutions indeed face a bind-ing self-enforceability constraint, while countries with strong insti-tutions do not. We show that only in countries with weak insti-tutions, incumbent governments, facing a non-zero probability oflosing power, increase taxes by 10pp in the year of the election tosatisfy the self-enforceability constraint. A self-enforcing agreementwould require investment and taxes to be backloaded (Thomas andWorrall (1994)). We explore this empirically and show that con-tracts in countries with weak institutions seem to be relatively morebackloaded than those in countries with strong institutions.