This study analyzes the interaction between distorted election choices and the architecture of government with a focus on the implications for the accountability of politicians. Contrasting centralized with decentralized political systems, it is shown that centralization is likely to result in...

We study the strategic incentives of regional governments to allocate their budget to public investment and to public consumption expenditures against the background of an incentive-compatible redistribution policy set by the central government. Regional investment changes the productivity...

We introduce cross-border shopping and indirect tax competition into a model of optimal taxation. The Atkinson-Stiglitz result that indirect taxation cannot improve the efficiency of information-constrained tax-transfer policies, and that indirect taxes should not be differentiated across goods,...

We analyze the optimal regional pattern of public employment in an information-constrained second-best redistribution policy showing that regionally differentiated public employment can serve as an expenditure side tagging device, bypassing or relaxing the equity-effciency trade-off. The optimal...

We study the pass-through of indirect taxes on beer prices in the European Union (EU). Exploiting the variation of value added tax rates, beer excise tax rates, and beer prices in a panel of monthly data from 1996 to 2016 of all current 28 EU member states, we estimate the tax pass-through of...

Combining an intensive labor supply margin with an extensive, productivity-enhancing migration margin, we determine how regional inequality and labor mobility shape optimal redistribution. We propose the use of delayed optimal-control techniques to obtain optimal tax formulae with...

A gradually introduced reform of local government accounting made it temporarily possible for municipalities in the German state of North Rhine-Westphalia to avoid the effective control of their budget by the authorities in charge of overseeing local government budgets and enforcing the existing...

Exploiting the German 2008 tax reform we employ an event study design to assess the effects of local corporate taxes on stock prices. We match firms to the local tax rates at their respective headquarters and analyze the differential stock market responses to the reform decision. We find that...

We investigate whether public provision of positional goods can be a sensible instrument to address inefficiencies arising from relative-standing externalities associated with the excessive consumption of such goods. In situations where consumers face a discrete choice between a private and a...

We study the pass-through of indirect taxes on beer prices in the European Union (EU). Exploiting the variation of value added tax rates, beer excise tax rates, and beer prices in a panel of monthly data from 1996 to 2016 of all current 28 EU member states, we estimate the tax pass-through of...