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Title:The Role of Beliefs for the Sustainability of the Fiscal Constitution PDF Logo
Authors:Neumärker, Karl Justus Bernhard
Pech, Gerald
Issue Date:2003
Series/Report no.:CSLE Discussion Paper 2003-01
Abstract:Why does the government not defect from the constitution? This article focuses on the dynamic restraints the government faces under the rule of law: violations against unconstitutional laws are not punished under the constitution. If a violating government cannot commit itself never to reinstall the constitution enforcing an unconstitutional law becomes difficult. Citizens? expectations to go unpunished when not complying may be self-fulfilling. Deriving the equilibrium of a global game we show that this mechanism is effectively deterring a government from defecting from a constitutionally permissible tax rate.
Subjects:tax evasion
global games
selffulfilling expectations
dynamic policy restraints
JEL:H26
D7
E61
K42
Document Type:Working Paper
Appears in Collections:CSLE Discussion Paper Series, CSLE - Center for the Study of Law and Economics, Universität des Saarlandes

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