A growing literature documents the existence of strategic political reactions to public expenditure in one jurisdiction on either neighboring or reference jurisdictions. The latter might give raise to downward expenditure spiral, or "race to the bottom". However, in ascertaining the empirical...

The paper analyzes under what circumstances policymakers experiment with policies with uncertain outcomes, when they prefer to imitate policies initiated in other countries, and when they prefer to coordinate policies internationally. Policymakers have private costs of active policies and...

This paper critically surveys the growing literature on the policy choices of local governments. First, we identify various reasons for local government policy interactions, including fiscal competition, bidding for firms, yardstick competition, expenditure spillovers, and Tiebout sorting. We...

A lack of transparency about policy performance can pose a major obstacle to welfare-enhancing policy competition across jurisdictions. In parallel surveys with German citizens and state parliamentarians, we document that both groups misperceive the performance of their state's education system....

This paper investigates the relationship between electoral incentives, institutions and corruption. We assume that voters use a yardstick criterion. The incumbent provides a public good and extracts rent, which are financed by imposing a distortionary tax. We demonstrate the possibility that...

This paper evaluates the effects of a major Swedish school choice reform. The reform in 1992 increased school choice and competition among public schools as well as through a large-scale introduction of private schools. We estimate the effects of school choice and competition, using precise...

This study evaluates the role market competition plays in determining inflation based on sector-level data from OECD countries. In theory, trade openness can affect inflation through changes in market competitiveness and productivity. Nonetheless, previous empirical studies often fail to account...

We study the effect of a merger between two Dutch supermarket chains to assess its effect on the depth as well as composition of assortment. We adopt a difference-in-differences strategy that exploits local variation in the merger's effects, controlling for selection on observables through a...

We provide an evaluation of the impact of public subsidy schemes that aimed to support the development of basic broadband infrastructure in rural areas of Germany. Such subsidies are subject to state aid control by the European Commission (EC). While the EC increasingly recognises the role of...

This article analyses the dynamics of electoral promises, building on an electoral competition model with endogenous policies. It extends the Grossman-Helpman (1994) model [Grossman G., Helpman E. [1994], "Protection for sale", American Economic Review, 84, 4, 833-850] to include sanctions from...