This paper analyzes the problems in designing a tax sharing system when there are two governments levels with rights over the same taxes. Using a principal-agent model, the optimality of the different tax sharing systems is discussed. The presence of efficiency problems derived from the lack of...

This paper deals with the problem of fiscal corresponsability of twogovemment levels in a game theory context. It is assumed that Nash equilibriaof the non-cooperative game between both Govemments are not Pareto optimal.Then, assurning the existence of non-equilibrium strategies, which would...