Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition.
This paper develops a model of the political economy of tax-setting in a multijurisdictional world where voters' choices and incumbent behavior are determined simultaneously. Voters are assumed to make comparisons between jurisdictions to overcome political agency problems. This forces incumbents into a (yardstick) competition in which they care about what other incumbents are doing. The authors provide a theoretical framework and empirical evidence using U.S. state data from 1960 to 1988. The results are encouraging to the view that vote-seeking and tax-setting are tied together through the nexus of yardstick competition. Copyright 1995 by American Economic Association.
Year of publication: |
1995
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Authors: | Besley, Timothy ; Case, Anne |
Published in: |
American Economic Review. - American Economic Association - AEA. - Vol. 85.1995, 1, p. 25-45
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Publisher: |
American Economic Association - AEA |
Saved in:
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