This paper analyzes political agency with endogenous information collection and revelation by third-party auditors. While increasing incentives for auditors to provide information straightforwardly improves political control, a small amount of pro-incumbent bias can also be useful for...

Numerous theories posit that the fiscal decisions of one jurisdiction influence the fiscal decisions of its neighbors. The main contribution of this paper is to address empirical difficulties in testing for spillovers using a regression discontinuity design on a newly collected dataset. I...

We examine the efficiency, distributional, and environmental consequences of assigning spatial property rights to part of a spatially-connected natural resource while the remainder is competed for by an open access fringe. We refer to this as partial enclosure of the commons. We obtain sharp...

The Tiebout model has been the reference point for the classical approach to fiscal federalism. Its emphasis on mobility, benefit taxation, and the advantages of fiscal competition have informed fiscal federalism since the seminal contributions of Musgrave and Oates. This paper reviews the...

Though the traditional literature in fiscal federalism argues that the Federal government should have primary responsibility for income redistribution, U.S. states are in fact actively engaged in redistribution. This paper develops a positive model of the respective roles of state and Federal...

This paper contributes to the discussion on Separate Accounting versus Formula Apportionment in the corporate income taxation of multinational enterprises. The innovation is that we consider a general equilibrium tax competition model with an endogenous interest rate. In contrast to previous...

We test the premise of the theoretical literature that M-form political hierarchies are effective in creating yardstick competition between regional divisions only when those divisions have sufficiently diversified or similar industrial composition. The reason for this is that the competition...

The economics of fiscal federalism has identified two book-end departures from first-best provision of a public good. Local governments may respond to local conditions, but ignore inter-jurisdictional spillovers. Alternatively, central governments may internalize spillovers, but impose uniform...

Previous literature widely assumes that taxes are optimized in local public finance while expenditures adjust residually. This paper endogenizes the choice of the optimization variable. In particular, it analyzes how federal policy toward local governments' influences the way local governments...

This paper investigates the relationship between the size of interest groups in terms of voter representation and the interest group's campaign contributions to politicians. We uncover a robust hump-shaped relationship between the voting share of an interest group and its contributions to a...