Is There a Culture of Tax Compliance in Argentina?

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In Chile, everybody pays their taxes 98%. And in Argentina, maybe 50% probably not. So there's two different equilibria there and you can't move from one to the other unless everybody moves at the same time. I had a student once who did a comparison of the tax compliance cultures between Chile and Argentina. They were on TV saying you should pay your taxes. But they had to pull the ads within a week because none of the actors had paid their taxes.

Economist and political scientist Michael Munger of Duke University talks about industrial policy with EconTalk host Russ Roberts. Munger argues that in a democracy, the default outcome for industrial policy is crony capitalism--attempts to improve on that outcome either by appointing experts or eliminating cronyism are going to fail for political reasons. The conversation concludes with a discussion of the reliability of Munger's claim and what options are left for dissatisfied reformers.