Fiscal capacity and capital misallocation: the economic costs of tax evasion
研究发展中国家因行政能力不足导致税率执行不均，进而影响资本配置和生产率的问题。以中国金税工程为自然实验，发现该改革通过提升财政能力，促使资本从受益大的县流出，缩小了企业间资本边际产出的差距，并提升了整体生产率。
This paper examines developing countries’ low administrative capacity to enforce uniform tax rates across space as a driver of capital allocation and a cause of low productivity. We rely on the Golden Tax Project, an information technology reform in China that eliminates the need for local tax-enforcing agencies to verify firm sales and purchases through onsite inspections, as a natural experiment to study the effects of fiscal capacity on firms’ location and capital allocation decisions. Exploiting the heterogeneous shocks that the reform exerts on the fiscal capacity of Chinese counties with different geographic ruggedness, we find that the Golden Tax Project significantly leveled effective tax rates across Chinese counties, which caused capital to relocate out of counties that experienced a bigger fiscal capacity boost after the reform. Such cross-county capital reallocation significantly equalized the marginal product of capital across firms and caused a rightward shift in productivities among them.