Agnar Sandmo

Bio: Agnar Sandmo is an academic researcher from Norwegian School of Economics. The author has contributed to research in topics: Public good & Public finance. The author has an hindex of 40, co-authored 107 publications receiving 11518 citations. Previous affiliations of Agnar Sandmo include University of Pennsylvania & University of Copenhagen.

Optimal Taxation in the Presence of Externalities

Abstract: This paper attempts to integrate the theory of optimal taxation with the analysis of the use of indirect taxation to counteract negative external effects (Pigovian taxes). A first-best solution to the problem of the optimal tax on an externalitygenerating good is contrasted with the case where the government also needs other, distortionary taxes in order to satisfy its revenue requirements. The main result is that the Pigovian principle holds in a modified form in the latter case as well. The problem of the distributional impact of taxation is also studied for the special case of individuals with identical preferences and a utilitarian social welfare function.

The Theory of Tax Evasion: A Retrospective View

Abstract: The paper gives an overview of some main themes in the theory of tax evasion, starting from Allingham and Sandmo (1972). It reviews the comparative statics of the original model of individual behav...

Economic growth and income inequality

Abstract: We investigate whether income inequality affects subsequent growth in a cross-country sample for 1965-90, using the models of Barro (1997), Bleaney and Nishiyama (2002) and Sachs and Warner (1997), with negative results. We then investigate the evolution of income inequality over the same period and its correlation with growth. The dominating feature is inequality convergence across countries. This convergence has been significantly faster amongst developed countries. Growth does not appear to influence the evolution of inequality over time. Outline

Adoption of agricultural innovation in developing countries : a survey (revised)

Abstract: This paper is a revised version of Staff Working Paper 444 It reviews various studies which have provided a description of and possible explanation to patterns of innovation adoption in the agricultural sector It therefore covers both empirical and theoretical studies The discussion highlights the diversity in observed patterns among various farmers' classes as well as differences in results from different studies in different socio-economic environments, and reviews the attempts to rationalize such findings Special attention is given to the methodologies which are commonly used in studies of innovation adoption, and suggestions for improvements of such work through the use of appropriate economometric methods are provided The diversity of experiences with different innovations in different geographical and socio-cultural environments suggest that studies of adoption patterns should provide detailed information on attributes of the institutional, social and cultural setting and their interactions with economic factors These may be an important element in explaining conflicting experiences

On the Determination of the Public Debt

Abstract: A public debt theory is constructed in which the Ricardian invariance theorem is valid as a first-order proposition but where the dependence excess burden on the timing of taxation implies an optimal time path of debt issue. A central proposition is that deficits are varied in order to maintain expected constancy in tax rates. This behavior implies a positive effect on debt issue of temporary increases in government spending (as in wartime), a countercyclical response of debt to temporary income movements, and a one-to-one effect of expected inflation on nominal debt growth. Debt issue would be invariant with the outstanding debt-income ratio and, except for a mirror effect, with the level of government spending. Hypotheses are tested on U.S. data since World War I. Results are basically in accord with the theory. It also turns out that a small set of explanatory variables can account for the principal movements in interest-bearing federal debt since the 1920s.

Adoption of agricultural innovations in developing countries: a survey

Abstract: This paper reviews various studies which have provided a description and possible explanation to patterns of innovation adoption in the agricultural sector. The survey points out that the tendency of many studies to consider innovation adoption in dichotomous terms (adoption/nonadoption) may not be appropriate in many cases where the actual decisions are defined over a more continuous range. More attention needs to be given to the socio-cultural and institutional environment in area studies so that their interrelation with economic factors affecting adoption can be inferred. The presence of several interrelated innovations is another aspect that needs to be considered more carefully in future research, since a number of simultaneous decisions may be involved. Furthermore, the possibility of regular sequential patterns in adopting components of a new technological package should be specifically addressed in future studies. Finally, the impact of differential adoption rates on land holding distribution merits attention in future research.

Shadow Economies: Size, Causes, and Consequences

Abstract: Using various methods, the size of the shadow economy in 76 developing, transition, and OECD countries is estimated. Average size varies from 12 percent of GDP for OECD countries, to 23 percent for transition countries and 39 percent for developing countries. Increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy, especially in OECD countries. According to some findings, corruption has a positive impact on the size of the shadow economy, and a growing shadow economy has a negative effect on official GDP growth.