Strengthening the banking sector through higher equity capital is one of the key elements of policies aiming to reduce the probability of crises. However, the ‘corporate debt bias’ – the tendency of corporate tax systems to favour debt over equity – is at odds with this objective. This column estimates the benefits for financial stability of eliminating the corporate debt bias. Fully removing the debt bias is estimated to reduce potential public finance losses by between 25 and 55% for the six large EU countries sampled.
Sven Langedijk, Gaëtan Nicodème, Andrea Pagano, Alessandro Rossi, Saturday, July 4, 2015 - 00:00
Andrés Rodríguez-Pose, Yannis Psycharis, Vassilis Tselios, Tuesday, March 3, 2015 - 00:00
Hans Holter, Dirk Krueger, Serhiy Stepanchuk, Friday, February 20, 2015 - 00:00
Ameet Morjaria, Wednesday, February 5, 2014 - 00:00
Ethnic favouritism is a longstanding problem in Africa. This column presents new evidence of this phenomenon and how democracy affects it. Data on road building in Kenya confirms strong ethnic favouritism that disappears during periods of democracy.
Joakim Ruist, Saturday, January 18, 2014 - 00:00
The lifting of transitional access restrictions for Romanian and Bulgarian workers is a hotly debated topic in the EU with big implications for public finances in destination countries. This column presents analysis of immigrants in Sweden, which never imposed access restrictions when these two countries joined the EU. Romanian and Bulgarian migrants to Sweden under this unrestricted regime make a sizeable positive contribution to Swedish public finances. Contributions can be expected to be even larger in the UK and Ireland.
Joakim Ruist, Tuesday, September 17, 2013 - 00:00
This year the free movement of eastern European workers within the EU has been questioned. Fearing excessive use of their own welfare systems, governments have argued for continued access restrictions. This column presents research showing that eastern European migrants have been net contributors to public finances of the richer EU15 nations that received them.