TABLE 4
FROM:
Moral Hazard in Property Tax Administration: A Comparative Analysis of the Czech and Slovak Republics
Phillip J Bryson and Gary C Cornia
BACK TO ARTICLETable 4. Moral hazard: property tax policy and administration
| Policy Development | ||
|---|---|---|
| Central government | Sub-national government | |
| Administration Central government | Complete centralisation benefits from resources, technical support, and policy experience. There is little incentive to improve administrative outcomes. The result is a lagging effort on the part of central administrators. Discovery and audit are especially underdeveloped. Likelihood of moral hazard problems is high. | Sub-national Governments have substantial input on policy issues, but there is less chance to monitor the behaviour of the administrator of the property tax. The potential for moral hazard problems is moderate. |
| Sub-national government | Centralisation of policy facilitates development of policy. Local governments benefit directly inthe outcomes of the administrative processes. Revenues collected can be used by the local government. The potential for moral hazard problems is low. | Complete decentralisation diminishes the uniformity between taxing jurisdictions, creates potential for tax wars,and has uneven resources assigned to policy. To overcome potential policy problems administrators rely on strong administrative responses that only exacerbate the problems of the tax. Likelihood of moral hazard problems is high. |
