Fiscal illusion of the stated preferences of government officials regarding interministerial policy packages: A case study on child labor in Afghanistan

Abstract

Fiscal illusion refers to taxpayers’ perceptions of the gap between their burden and their expectations regarding the provision of public services. In this paper, we provide a comprehensive picture of the preferences of central government officials with respect to a hypothetical interministerial anti-child labor policy program. In our randomized conjoint analysis , the policy program consists of five attributes: (i) share of open-air classes; (ii) share of qualified teachers; (iii) provision of child allowance; (iv) female labor participation; and (v) an attribute related to the scale of budget, defined by either tax payment or share of government expenditure . The respondents were randomly assigned to two groups by assigning different fifth attributes. We compared the supporting rate for the proposed anti-child labor policy program between the two groups of 605 respondents: tax payment and share of government expenditure. Thus, our primary goal was to compare two attributes. We found that the average marginal component effects (AMCEs) between the two attributes showed completely opposite directions, suggesting that a significant fiscal illusion problem exists among central government officials working in Kabul. Moreover, women and staff in lower positions of government were found to be more biased. It should be noted that, due to insensitivity to the tax payment levels when they are set by the comparable range of scale of budget with the share of government expenditures, and our setting of the levels of two attributes on different scales, the study demonstrates a mere qualitative comparison. • Addressing child labor through interministerial policies. • Searching fiscal illusion problems among government officials rather than voters. • Using a randomized conjoint experiment to explore the concept of fiscal illusion. • Fiscal illusion was detected among Afghan bureaucrats due to their inconsistent preferences for funding policy sources.