Faculty & Research

Business, Government & the International Economy

Business, Government & the International Economy

Overview Faculty Curriculum Seminars & Conferences Awards & Honors
    • 2021
    • Working Paper

    The Incidence of the Corporate Income Tax is Irrelevant for its (Benefit-Based) Justification

    By: Matthew C. Weinzierl

    Robust support for corporate income taxation is a puzzle for standard tax theory because the tax’s incidence is uncertain and unreliable. We propose a resolution: if the corporate tax is seen as a benefit-based tax, its normative appeal depends on the correspondence between its incidence and that of the benefit which corporations derive from the state’s activities. We show that a simple mechanism makes this correspondence exact—and the net incidence of the tax zero—when the tax base matches what we call the benefit base. As a result, the appeal of the corporate income tax is independent of incidence as conventionally understood.

    • 2021
    • Working Paper

    The Incidence of the Corporate Income Tax is Irrelevant for its (Benefit-Based) Justification

    By: Matthew C. Weinzierl

    Robust support for corporate income taxation is a puzzle for standard tax theory because the tax’s incidence is uncertain and unreliable. We propose a resolution: if the corporate tax is seen as a benefit-based tax, its normative appeal depends on the correspondence between its incidence and that of the benefit which corporations derive from the...

    • November 2021
    • Case

    The Global Great Depression, 1929-1939

    By: Alberto Cavallo, Sophus A. Reinert and Federica Gabrieli

    • November 2021
    • Case

    The Global Great Depression, 1929-1939

    By: Alberto Cavallo, Sophus A. Reinert and Federica Gabrieli

    • 2021
    • Working Paper

    COVID-19, Government Performance, and Democracy: Survey Experimental Evidence from 12 Countries

    By: Michael Becher, Nicholas Longuet Marx, Vincent Pons, Sylvain Brouard, Martial Foucault, Vincenzo Galasso, Eric Kerrouche, Sandra León Alfonso and Daniel Stegmueller

    Beyond its immediate impact on public health and the economy, the COVID-19 pandemic has put democracy under stress. While a common view is that people should blame the government rather than the political system for bad crisis management, an opposing view is that dissatisfaction with government performance may cause deeper dissatisfaction with democracy even in consolidated democratic regimes. We use a pre-registered survey and experiment covering 12 countries and 22,500 respondents to examine the impact of the pandemic on public attitudes about incumbent governments, the functioning of democracy and support for different types of regimes. To estimate causal effects, we leverage experimental treatments using an instrumental variable design. We find that dissatisfaction with the government, which is equally driven by economic and health considerations, decreases satisfaction with how democracy works. However, it does not translate into an embrace of non-democratic regime types.

    • 2021
    • Working Paper

    COVID-19, Government Performance, and Democracy: Survey Experimental Evidence from 12 Countries

    By: Michael Becher, Nicholas Longuet Marx, Vincent Pons, Sylvain Brouard, Martial Foucault, Vincenzo Galasso, Eric Kerrouche, Sandra León Alfonso and Daniel Stegmueller

    Beyond its immediate impact on public health and the economy, the COVID-19 pandemic has put democracy under stress. While a common view is that people should blame the government rather than the political system for bad crisis management, an opposing view is that dissatisfaction with government performance may cause deeper dissatisfaction with...

About the Unit

The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.

The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.

  • The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
  • The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
  • The Unit examines other countries’ business environments and their historical development.
  • The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.

Recent Publications

The Incidence of the Corporate Income Tax is Irrelevant for its (Benefit-Based) Justification

By: Matthew C. Weinzierl
  • 2021 |
  • Working Paper |
  • Faculty Research
Robust support for corporate income taxation is a puzzle for standard tax theory because the tax’s incidence is uncertain and unreliable. We propose a resolution: if the corporate tax is seen as a benefit-based tax, its normative appeal depends on the correspondence between its incidence and that of the benefit which corporations derive from the state’s activities. We show that a simple mechanism makes this correspondence exact—and the net incidence of the tax zero—when the tax base matches what we call the benefit base. As a result, the appeal of the corporate income tax is independent of incidence as conventionally understood.
Related

Lattice Semiconductor and the Future of Chinese High-Tech Acquisitions in the United States

By: Meg Rithmire
  • December 2021 |
  • Teaching Note |
  • Faculty Research
Related

The Global Great Depression, 1929-1939

By: Alberto Cavallo, Sophus A. Reinert and Federica Gabrieli
  • November 2021 |
  • Case |
  • Faculty Research
Related

West Virginia: Finding the Right Path Forward

By: Matthew C. Weinzierl, Christine Keung and Reggie Smith
  • November 2021 |
  • Case |
  • Faculty Research
Related

The Rohingya Refugee: Past, Genocide, Future

By: Reshmaan N. Hussam
  • November 2021 |
  • Teaching Note |
  • Faculty Research
Related

COVID-19, Government Performance, and Democracy: Survey Experimental Evidence from 12 Countries

By: Michael Becher, Nicholas Longuet Marx, Vincent Pons, Sylvain Brouard, Martial Foucault, Vincenzo Galasso, Eric Kerrouche, Sandra León Alfonso and Daniel Stegmueller
  • 2021 |
  • Working Paper |
  • Faculty Research
Beyond its immediate impact on public health and the economy, the COVID-19 pandemic has put democracy under stress. While a common view is that people should blame the government rather than the political system for bad crisis management, an opposing view is that dissatisfaction with government performance may cause deeper dissatisfaction with democracy even in consolidated democratic regimes. We use a pre-registered survey and experiment covering 12 countries and 22,500 respondents to examine the impact of the pandemic on public attitudes about incumbent governments, the functioning of democracy and support for different types of regimes. To estimate causal effects, we leverage experimental treatments using an instrumental variable design. We find that dissatisfaction with the government, which is equally driven by economic and health considerations, decreases satisfaction with how democracy works. However, it does not translate into an embrace of non-democratic regime types.
Related

Does Social Media Cause Polarization? Evidence from Access to Twitter Echo Chambers during the 2019 Argentine Presidential Debate

By: Rafael Di Tella, Ramiro H. Gálvez and Ernesto Schargrodsky
  • 2021 |
  • Working Paper |
  • Faculty Research
We study how two groups, those inside vs. those outside echo chambers, react to a political event when we vary social media status (Twitter). Our treatments mimic two strategies often suggested as a way to limit polarization on social media: they expose people to counter-attitudinal data, and they get people to switch off social media. Our main result is that subjects that started inside echo chambers became more polarized when these two strategies were implemented. The only scenario where they did not become more polarized is when they did not even experience the political event. Interestingly, subjects that were outside echo chambers before our study began experienced no change (or a reduction) in polarization. We also study a group of non-Twitter users in order to have a simple, offline benchmark of the debate’s impact on polarization.
Keywords: Political Polarization; Social Media; Political Elections; Online Technology; Attitudes; Argentina
Related

Strict ID Laws Don't Stop Voters: Evidence from a U.S. Nationwide Panel, 2008–2018

By: Enrico Cantoni and Vincent Pons
  • November 2021 |
  • Article |
  • Quarterly Journal of Economics
U.S. states increasingly require identification to vote—an ostensive attempt to deter fraud that prompts complaints of selective disenfranchisement. Using a difference-in-differences design on a 1.6-billion-observations panel dataset, 2008–2018, we find that the laws have no negative effect on registration or turnout, overall or for any group defined by race, gender, age, or party affiliation. These results hold through a large number of specifications and cannot be attributed to voters’ reaction against the laws or measured by campaign contributions and self-reported political engagement. However, the likelihood that non-white voters were contacted by a campaign increases by 5.4 percentage points, suggesting that parties’ mobilization might have offset modest effects of the laws on the participation of ethnic minorities. Finally, strict ID requirements have no effect on fraud—actual or perceived. Overall, our findings suggest that efforts to improve elections may be better directed at other reforms.
Keywords: Voter ID Laws; Voter Turnout; Voting; Political Elections; Governing Rules, Regulations, and Reforms; United States
Related
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Contact Information

Business, Government & the International Economy Unit
Harvard Business School
Morgan Hall
Soldiers Field
Boston, MA 02163
BGIE@hbs.edu