The rule of law and sustainability of the constitution: The case of tax evasion

Nadeem Naqvi, Bernhard Neumärker and Gerald Pech ()

No 01-2012, The Constitutional Economics Network Working Papers from University of Freiburg, Department of Economic Policy and Constitutional Economic Theory

Abstract: Why do rulers play by the rules? We show that the legality requirement under the rule of law implements an endogenous enforcement mechanism supporting constitutionality. Agents which do not obey unconstitutional legal norms are not sanctioned under constitutional rule. A principal who defects from the constitution but cannot commit himself to never reinstall the constitution finds law enforcement more difficult. As more agents disobey, enforcement becomes less effective. The expectation of an eventual return to constitutionality becomes self-fulfilling. We show this mechanism to be effective in deterring a government from violating constitutional norms.

Keywords: constitution; dynamic policy constraints; tax evasion; global games (search for similar items in EconPapers)
JEL-codes: D78 H26 K10 K42 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-iue
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/57637/1/699919495.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:cenwps:012012

Access Statistics for this paper

More papers in The Constitutional Economics Network Working Papers from University of Freiburg, Department of Economic Policy and Constitutional Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().