Efficiency, enforcement and revenue tradeoffs in participatory forest management: an example from Tanzania

Where joint forest management has been introduced into Tanzania, ‘volunteer’ patrollers take responsibility for enforcing restrictions over the harvesting of forest resources, often receiving as an incentive a share of the collected fine revenue. Using an optimal enforcement model, we explore how that share, and whether villagers have alternative sources of forest products, determines the effort patrollers put into enforcement and whether they choose to take a bribe rather than honestly reporting the illegal collection of forest resources. Without funds for paying and monitoring patrollers, policy makers face tradeoffs over illegal extraction, forest protection and revenue generation through fine collection.

Exploring unanticipated consequences of strategy amongst stakeholder segments: the case of a European Revenue Service

This article applies FIMIX-PLS segmentation methodology to detect and explore unanticipated reactions to organisational strategy among stakeholder segments. For many large organisations today, the tendency to apply a “one-size-fits-all” strategy to members of a stakeholder population, commonly driven by a desire for simplicity, efficiency and fairness, may actually result in unanticipated consequences amongst specific subgroups within the target population. This study argues that it is critical for organisations to understand the varying and potentially harmful effects of strategic actions across differing, and previously unidentified, segments within a stakeholder population. The case of a European revenue service that currently focuses its strategic actions on building trust and compliant behaviour amongst taxpayers is used as the context for this study. FIMIX-PLS analysis is applied to a sample of 501 individual taxpayers, while a novel PLS-based approach for assessing measurement model invariance that can be applied to both reflective and formative measures is also introduced for the purpose of multi-group comparisons. The findings suggest that individual taxpayers can be split into two equal-sized segments with highly differentiated characteristics and reactions to organisational strategy and communications. Compliant behaviour in the first segment (n = 223), labelled “relationships centred on trust,” is mainly driven through positive service experiences and judgements of competence, while judgements of benevolence lead to the unanticipated reaction of increasing distrust among this group. Conversely, compliant behaviour in the second segment (n = 278), labelled “relationships centred on distrust,” is driven by the reduction of fear and scepticism towards the revenue service, which is achieved through signalling benevolence, reduced enforcement and the lower incidence of negative stories. In this segment, the use of enforcement has the unanticipated and counterproductive effect of ultimately reducing compliant behaviour.

Revenue-neutral tax policy under price uncertainty

The firm's response to revenue-neutral taxation is investigated under price uncertainty. Revenue-neutral policies adjust simultaneously the marginal tax rate and the level of exemptions while keeping expected tax receipts constant. Nonincreasing absolute risk aversion is sufficient to sign the firm's response: a reduction in the marginal rate causes the firm to contract output. Implications are established for the equilibrium level of treasury receipts.

Revenue-neutral tax policies under price uncertainty: reply

In their comment on my 1990 article, Yeh, Suwanakul, and Mai extend my analysis-which focused attention exclusively on firm output-to allow for simultaneous endogeneity of price, aggregate output, and numbers of firms. They show that, with downward- sloping demand, industry output adjusts positively to revenue-neutral changes in the marginal rate of taxation. This result is significant for two reasons. First, we are more often interested in predictions about aggregate phenomena than we are in predictions about individual firms. Indeed, firm-level predictions are frequently irrefutable since firm data are often unavailable. Second, the authors derive their result under a set of conditions that appear to be more general than those invoked in my 1990 article. In particular, they circumvent the need to invoke specific assumptions about the nature of firms' aversions toward risk. I consider this a useful extension and I appreciate the careful scrutiny of my paper.