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How to target enforcement at scale? Evidence from tax audits in senegal


Developing economies are characterized by limited compliance with government regulation, such as taxation. Resources for enforcement are scarce, but the increasing availability of digitized data and data processing technologies have the potential to improve the targeting of enforcement. Levering an experiment at scale in Senegal, we compare the yield of tax audit cases selected by a risk-scoring algorithm to cases selected by tax inspectors based on a traditional discretionary procedure. Discretionary methods select larger firms on average and uncover equivalent evasion rates as the algorithm, thus outperforming it in terms of fines

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