This paper uses the quasi-experiment of Germany´s reunification to identify local tax mimicking by municipalities in Eastern-Germany. After reunification, East-German municipalities were allowed to independently set, for the first time in decades, local business and property tax rates. I...

A problematic feature of the existing empirical literature on the relationship between revenue decentralization (RD) and inflation is the use of inaccurate measures for RD. Using a newly constructed measure for RD that accounts for over-time changes in sub-national tax autonomy, this paper finds...

Theory suggests that transfers should have an effect on local fiscal policy that is similar to an equivalent increase in local incomes. Yet much of the empirical literature shows that local governments use transfers primarily to increase expenditures. Recent contributions have revisited this so...

A problematic feature of the existing empirical literature on the relationship between revenue decentralization (RD) and inflation is the use of inaccurate measures for RD. Using a newly constructed measure for RD that accounts for over-time changes in sub-national tax autonomy, this paper finds...

This paper exploits an exogenous reform of the local fiscal equalization scheme in the German State of North Rhine-Westphalia (NRW) in 2003 to identify tax mimicking by municipalities in the neighboring state of Lower Saxony (NDS). The reform caused municipalities in NRW to increase their...

This paper exploits an exogenous reform of the local fiscal equalization scheme in the German State of North Rhine-Westphalia to identify tax mimicking by municipalities in the neighboring state of Lower Saxony. The spatial lag regressions provide no evidence for the existence of strategic...

This paper studies whether higher level governments treat politically aligned municipalities differently than unaligned ones when they provide special discretionary transfers to resolve acute fiscal problems (special needs transfers). By implementing a regression discontinuity design with a...

We study the effect of direct democracy on local taxation. Our setting is the German federal state of Bavaria, where in 1995 a state-wide referendum introduced the possibility to initiate direct democratic legislation into the local government code. Relying on a sample of all Bavarian...

This paper uses the quasi-experiment of Germany's reunification to identify local tax mimicking by municipalities in Eastern-Germany. After reunification, East-German municipalities were allowed to independently set, for the first time in decades, local business and property tax rates. I explore...

This paper studies the revenue and base effects of local property and business tax hikes using a natural experiment in the German state of North Rhine-Westphalia (NRW). Due to a reform of the local equalization scheme in 2003, a set of municipalities in NRW increased their local tax rates by one...