Tax competition is supposed to lead to inefficiencies in the provision of public goods and difficulties for decentralized redistribution. A necessary condition for these ef fects to occur is that residence and location decisions are determined by fiscal considerations. In this paper, the impact...

The impact of corporate income taxes on location decisions of firms is widely debated in the tax competition literature. Tax rate differences across jurisdictions may lead to distortions of firms investment decisions. Empirical evidence on tax induced relocation and subsequent economic...

According to the Leviathan-Model, fiscal federalism is seen as a binding constraint on a revenue-maximizing government. The competitive pressure of fiscal federalism is supposed to reduce public sector size as compared to unitary states. However, empirical results concerning the Leviathan...

Mitten in der Griechenland-Krise haben die Präsidenten der fünf wichtigsten europäischen Institutionen Vorschläge für eine weitere Integration der Europäischen Währungsunion unterbreitet. Sie beziehen sich dabei auf die Wirtschafts-, Finanzmarkt- und Bankenunion und gehen sogar so weit,...

In 2009 Germany introduced a new fiscal rule in its Basic Law. It stipulates that the federal budget must be (structurally) close to balance from 2016 onwards and does not allow (structural) budget deficits in the Laender (states') budgets after 2019. While the already existing debt brakes at...

In 2009 Germany introduced a new fiscal rule in its Basic Law. It stipulates that the federal budget must be (structurally) close to balance from 2016 onwards and does not allow (structural) budget deficits in the Laender (states') budgets after 2019. While the already existing debt brakes at...

We study the effect of fiscal decentralization on economic growth for twenty-three Organisation for Economic Co-operation and Development countries from 1975 to 2008. In order to proxy fiscal decentralization, we use both traditional Government Finance Statistics (GFS)–style measures and...

The advantages and disadvantages of fiscal federalism are widely discussed in economics and political science. While some authors argue that federalism favors individual initiatives and serves as a market preserving device, others emphasize the dangers arising from an increasing corruption and...

We study the relationship between fiscal decentralization and economic growth for 23 OECD countries from 1975 to 2001 by using new panel data on sub-federal tax autonomy. While initial estimations suggest that fiscal decentralization causes lower growth rates, we find that this result is not...