Efficiency, equity, and politics: Democratic controls over the tax collector Academic Article uri icon


  • A tradeoff among the principles of efficiency, equity, and political responsiveness is often alleged but seldom analyzed empirically in public administration. We show that the tradeoffs among these principles, implicit in the allocation of resources across different jurisdictions, can be explicitly modeled in terms of an agency utility function. We then use a SUR regression model to estimate the relative impact of each principle on district-level audit allocation by the IRS for the periods 1963-1980 and 1982-1991. The results indicate that efficiency has by far the greatest influence on the allocation of IRS audits, with equity and direct political responsiveness playing lesser roles. The relative emphasis on efficiency is also responsive to historical and partisan changes in national politics. Before 1981, the IRS increased its concern with equity when Democratic influence increased. However, after the 1981 Reagan tax cut and consequent revenue shortfalls, the direction of partisan impact reversed as Democrats became more concerned with efficiency and Republicans with equity. Furthermore, efficiency and political responsiveness both increased in importance relative to equity as deficits and partisan differences over tax and spending policies grew following 1981.

published proceedings


author list (cited authors)

  • Scholz, J. T., & Wood, B. D.

citation count

  • 26

complete list of authors

  • Scholz, JT||Wood, BD

publication date

  • October 1999