Why Do Weak States Prefer Prohibition to Taxation? (научный семинар ИНИИ)

Докладчик: John V. C. Nye (George Mason University)

Докладчик: John V. C. Nye* (George Mason University)

7 октября, четверг, Ауд. Г-317 (Покровский б-р, 11), 18:30

Why do weak states prefer prohibition to taxation? Despite their relative inability to enforce prohibitions on many illegal activities such as gambling or selling narcotics, most states choose to prohibit rather than tax these goods and services. Moreover, nations marked by widespread corruption or low state capacity are more likely than effective states to prefer prohibition. Desierto and Nye [2010] show that keeping an undesirable good illegal is more efficient than legalizing and taxing it, even if producers of prohibited goods pay out large bribes to state enforcers. If the bribes are internalized as revenues to enforcers, this additional benefit actually shrinks net welfare loss. This paper combines this finding with empirical work on cross-national support for prohibition. Graphical analyses illustrate the net welfare losses of prohibition vs. taxation and help establish this new positive rationale for the persistence of prohibition worldwide. 

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*Nye John V. C. - Frederic Bastiat Chair in Political Economy and Professor of Economics