Fiscal Coordination and Political Competition
This contribution investigates fiscal coordination in the framework of two countries asymmetric in respect of their capital-labor endowment. When tax policies are decided by majority voting inside each country, and they are not coordinated at a supranational level, factors of production are inefficiently allocated, at equilibrium. Our main result shows that fiscal coordination, via a minimum capital tax, does not always lead to a Pareto-improvement for the median voter's welfare, with respect to the noncooperative outcome. Copyright 2003 Blackwell Publishing Inc..
Year of publication: |
2003
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Authors: | Grazzini, Lisa ; Ypersele, Tanguy Van |
Published in: |
Journal of Public Economic Theory. - Association for Public Economic Theory - APET, ISSN 1097-3923. - Vol. 5.2003, 2, p. 305-325
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Publisher: |
Association for Public Economic Theory - APET |
Saved in:
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