I ncreased expenditures and the government size is an important issue in public sector economics. In this regard, various theories have been developed in order to justify the reasons for the public expenditure growth, and the theories have been empirically tested. One of the outlooks explaining the government expenditures growth and the economy size, is fiscal illusion approach. According ...

The tax-expenditure hypothesis posed by Milton Friedman emphasizes a positive causal relationship between government tax revenues and government expenditures. If citizens do not have a correct perception of the real tax burden and under-estimate the price of public goods and services, there is a negative causal relationship between tax revenues and government expenditures, which indicates exist...

abstractaccording to public choice theory, the features of the tax structure effect on voters' perceptions from the tax burden, so they pay more cost for public goods, lower than the estimate. in this study has been investigated the relationship between tax and public expenditures in the iranian economy during 1360-1390 based on public choice theory to examine the level of government spend...

abstract the present study attempted to experimentally analyze the effect of fiscal illusion in the form of flypaper effect on spending demand levels of provincial governments in iran. to this aim, theoretical foundations and literature review were presented, and then the model used for investigation was specified. finally, using time series data for provinces of iran during 2000-2013 estimatio...

In this paper we present survey evidence suggesting that there exists a sizeable fiscal illusion amongst the general public in Sweden. Respondents in a nationwide and representative survey systematically underestimate the share of an ordinary worker‟s income that is transferred to the public sector. Furthermore, we make a theoretical distinction between tax illusion and fiscal obfuscation, a pr...

This paper examines the empirical analysis of the five main hypotheses subsumed under the generic term fiscal illusion. After placing these hypotheses within a common theoretical framework, the paper attempts to evaluate empirical research into the revenue-complexity hypothesis, the revenueelasticity hypothesis, the flypaper effect, renter illusion, and debt illusion.