This paper concerns optimal taxation and public goods in an economic federation with decentralized leadership, where one lower level government is first mover also in the horizontal dimension. Under plausible assumptions, horizontal leadership reinforces the incentives created by decentralized...

This paper analyzes environmental policy in a decentralized economic federation comprising two countries, where a federal government decides upon environmental targets (maximum allowable emissions) for each country, which are implemented by the national governments. Both national governments...