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    Canadian Political Science Association
    2020 Annual Conference Programme

    Confronting Political Divides
    Hosted at Western University
    Tuesday, June 2 to Thursday, June 4, 2020
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    Presidential Address:
    Barbara Arneil, CPSA President

    Origins:
    Colonies and Statistics

    Location:
    Tuesday, June 2, 2020 | 05:00pm to 06:00pm
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    KEYNOTE SPEAKER:
    Ayelet Shachar
    The Shifting Border:
    Legal Cartographies of Migration
    and Mobility

    Location:
    June 04, 2020 | 01:30 to 03:00 pm
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    Keynote Speaker: Marc Hetherington
    Why Modern Elections
    Feel Like a Matter of
    Life and Death

    Location:
    Wednesday, June 3, 2020 | 03:45pm to 05:15pm
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    Plenary Panel
    Indigenous Politics and
    the Problem of Canadian
    Political Science

    Location: Arts & Humanities Building - AHB 1R40
    Tuesday, June 2, 2020 | 10:30am to 12:00pm

Political Economy



G10 - Political Economy of Public Finance in an Era of Permanent Austerity. II

Date: Jun 3 | Time: 10:30am to 12:00pm | Location:

Chair/Président/Présidente : Olivier Jacques (McGill University)

Discussant/Commentateur/Commentatrice : Peter Graefe (McMaster University)


Session Abstract: Public finances are under strain in most industrialized economies. Aging, low growth and post-industrial social changes put an upward pressure on expenditures, while tax competition and lower productivity growth weakens governments’ capacity to raise revenues without provoking public resistance. OECD countries are in a prolonged era of “permanent austerity”, as governments’ fiscal room to maneuver shrinks. How are governments adapting their public finances to austerity? What is the impact of austerity on welfare states, labour market protection and tax policies? How do citizens react to austerity? This panel is divided in two related sessions of four papers each. The first two papers of this second session look at tax avoidance and the capacity of the international tax governance system. Genest-Grégroire presents an original individual-level measurement strategy of tax avoidance using list experiments and explores the individual determinants of tax avoidance. Moving to the international arena, Alepin, Latulippe and Otis examine how different actors shape international tax governance and whether this system is able to respond to tax competition and digitalization. The two other articles discuss public finance in subnational governments. Hanniman examines how the fiscal federal environment shapes the quality of market signals in subnational bond markets and shows that market discipline is a flawed device to promote the fiscal health of subnational governments. Finally, Jacques analyzes the impact of fiscal pressures and government partisanship on expenditure composition in Canadian provinces, revealing that regardless of government partisanship, fiscal pressures accelerate the crowding out effect of rising health care.


Who Avoids Taxes: Results Form a Survey Experiment: Antoine Genest-Grégoire (Carleton University)
Abstract: Better understanding about the individual and social roots of illegal actions to reduce individual’s tax payments is very valuable to governments trying to design interventions to raise compliance. However, the validity of such behavioral models and interventions cannot be assessed without tackling the question of tax evasion measurement. This paper presents an experimental method to try to measure the propensity to evade taxes, despite the sensitivity bias of such a subject. By using list experiments, it provides individual measures of the prevalence of tax evasion amongst different groups of the population. Using this method from political science research, we find that income tax is evaded by 13 percent of the Canadian population and consumption taxes by 29 percent. These estimates are robust to various changes in model specification and they are of a comparable magnitude to estimates done using audit data (Kleven et al., 2011). The estimated propensities are lower for women or older respondents, higher for Quebecers but not statistically different for the self-employed. Education and income are associated with more income tax evasion and less consumption tax evasion. Our results provide a test of the usefulness of list experiments to measure both income and consumption tax evasion (Fergusson et al. 2017). The method should provide researchers with a method to test recent theories about individual causes of evasion such as tax morale (Luttmer and Singhall, 2014) or trust and authority (Kirchler et al. 2008).


The International Tax Agora: Strengths and Shortcomings: Lyne Latulippe (Université de Sherbrooke), Brigitte Alepin (Université du Québec en Outaouais), Louise Otis (McGill University)
Abstract: This research will study constituent actors and organizations of the international tax agora taking part in the global tax discussion in recent years, and their influence on the evolution of the international tax system. The objective of the analysis is first to identify actors and organizations and their general contribution to global tax governance and the international tax agenda. Secondly, the analysis will describe strengths and shortcomings of this agora in terms of modernizing the international tax system. The research aims at understanding how the actual international tax agora facilitates or hinders the tackling of crucial issues of the current tax system arising from the globalization and the digitalization of the economy. This research will discuss how the international tax policy process could increase the representativeness of stakeholders.


Budget Priorities in Canadian Provinces: When and How Does Government Partisanship Matters: Olivier Jacques (McGill University)
Abstract: Canadian provinces’ public finances are facing serious fiscal pressures. On the one hand, aging and cost inflation are constantly increasing health expenditures while on the other hand, provinces are vulnerable to fiscal pressures resulting from reductions of federal transfers and from the volatility of natural resource royalties. Fiscal pressures are interesting to study since they force government to make difficult arbitrations between programs and to reveal their priorities. Which type of expenditures are prioritized and which ones are likely to be cutback when governments are facing fiscal pressures? Does government partisanship matter more when provinces are under fiscal stress than when they have sufficient fiscal room to maneuver? This article models budget policy choices in the ten Canadian provinces from 1980 to 2017 using a compositional dependent variable analysis, a method specifically designed to analyze the impact of an exogenous variable on budget composition. This is the first article modelling the impact of the interaction of fiscal pressures and partisanship on expenditure composition, rather than on levels of spending in Canadian provinces. The study reveals that when provinces face different types of exogenous and endogenous fiscal pressures, the proportion of health care expenditures increases, education and social spending are preserved, while “other” government expenditures are retrenched. Interestingly, the impact of fiscal pressures is not conditioned by government partisanship as most government react in a similar way to fiscal pressures. It is when governments have more fiscal room to maneuver that government partisanship matters most.




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