糖心原创

Title: Fiscal Fragmentation and Global Misallocation

Abstract: Resource misallocation is a fundamental driver of aggregate productivity differences, yet the underlying distortions are rarely observed directly. We study a unique laboratory where they are: more than a century of field-level data on production, inputs, and tax payments in the global oil and gas industry. We document substantial distortions. The world’s current oil output could be produced with far fewer resources if inputs were reallocated to equalize pre-tax marginal products. Because our data span more than a century, we observe the birth of this misallocation. We show that since 1970, the dispersion of fiscal wedges across firm-country pairs has risen sharply due to divergent sovereign tax policies—a phenomenon we call fiscal fragmentation. Embedding these directly measured wedges into a macroeconomic model of entry and production, we quantify their aggregate costs. Fiscal fragmentation accounts for roughly two-thirds of the sector’s total allocative inefficiency, operating almost entirely on the intensive margin. Finally, we show why standard country-level aggregates mask this inefficiency: fiscal regimes compress private returns across borders even as true pre-tax marginal products remain highly dispersed.