The purpose of this paper is to develop a political‐economy model to show how political imperatives lead to reforms in administering direct tax collection.
A static, political‐gain approach was used to model employment in the tax collection sector and then the implications of an increase in revenue pressure were derived through a comparative statics method.
As revenue pressure increases, the “political value” in terms of granting employment falls and thus efficiency resulting from purely political motives decreases.
This paper is an original work.
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