Explains that there remain important gaps in the economic theory that underlies empirical models and that are reflected in a less than satisfactory empirical understanding of the determinants of charitable contributions, real estate investment, and business fixed investment.

The standard model of strategic tax competition assumes that government policymakers are perfectly benevolent. We depart from this assumption by allowing for the possibility that policymakers are influenced by the rent-seeking (lobbying) behavior of businesses. This extension implies that...