According to the Globalization Paradox, globalization limits the freedom of choice for national governments. Capital mobility in particular induces tax competition, thus putting downward pressure on capital taxes. However, while capital mobility introduces the inefficiency of tax competition, it...

A large literature examines government fiscal interactions in federations. However, the empirical evidence is scattered and inconclusive, especially with respect to the size of interactions, as well as the institutional and economic determinants underpinning them. This paper uses meta-regression...

We set up a general model on capital mobility which contains many of the models in the literature as special cases. The race to the bottom results not from a capital flight effect, but rather from a kind of Laffer curve effect in public good provision. Selectively introducing simplifying...

Random factors such as bad weather or exogenous economic shocks affect the re-election of politicians and can reduce accountability. Such distorted election choices interact with the architecture of government. Contrasting centralized with decentralized political systems, this study shows that...

The aim of the paper is to analyze a model of local public good provision with positive interjurisdictional spillovers comparing decentralized and centralized system. As in the recent Second Generation Theory (SGT) of fiscal federalism (Seabright 1996; Lockwood 2002, 2006; Besley and Coate 2003; Weingast...

We propose that outcome utility and process utility can be distinguished and empirically measured. People gain procedural utility from participating in the political decision-making process itself, irrespective of the outcome. Nationals enjoy both outcome and process utility, while foreigners...

This paper investigates the behavior of rent-seeking politicians in an environment of increasing economic integration. The focus of the paper is on the implications of globalization-induced political yardstick competition for constitutional design with a view to the current discussion in the...

The traditional school of economic policy analysis predicts that globalisation will give rise to predatory competition between the governments of the European nation states. The consequence is anticipated to be a marked reduction in, if not the destruction of, the benevolent Welfare State. The...

We ask whether the birthplaces of Italian members of Parliament are favoured in the allocation of central government transfers. Using a panel of municipalities for the years between 1994 and 2006, we find that municipal governments of legislators' birth towns receive larger transfers per capita....

We present and test a theory of prospective and retrospective pocketbook voting. Focusing on two large reforms in Sweden, we establish a causal chain from policies to sizeable individual gains and losses and then to voting. The Social Democrats proposed budget cuts affecting parents with young...