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 show that warm-glow motives in provision by competing suppliers can lead to inefficient charity selection. In these situations, discretionary donor choices can promote efficient charity selection even when provision outcomes are non-verifiable. Government funding arrangements, on the other...

We develop a counterterrorism model to analyze the effects of allowing a government agency to torture suspects when evidence of terrorist involvement is strong. We find that legalizing torture in strong-evidence cases has offsetting effects on agency incentives to counter terrorism by means...

We use a novel identification strategy to shed light on the effect of grant funding. We focus on charities that applied to a UK lottery grant programme. Where charities score the same on formal criteria, it is likely that informal criteria orthogonal to quality are used to break the ties,...

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...

Interjurisdictional competition over mobile tax bases is an easily understood mechanism, but actual tax-base elasticities are difficult to estimate. Political pressure for reducing tax rates could therefore be based on erroneous estimates of the mobility of tax bases. We show that tax...

Many investment companies have begun providing their defined-contribution pension participants with individualized, retirement income projections. The U.S. Congress is currently considering whether to require them all to do so. Evidence on the potential impact is scant, though a large body of...

This paper provides a simple political agency model to explain the effect of political alignment between different tiers of government on intergovernmental grants and election outcomes. Key features of the model are: (i) rational voters interpret public good provision as a signal of incumbent...

This paper studies the impact of commodity taxes on the sustainability of collusion in imperfectly competitive markets. We consider both a Cournot and a Bertrand supergame with discounting, with collusion being supported by either grim trigger strategies or stick-and-carrot optimal punishments....

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...