This paper establishes, in a very general setting, necessary and sufficient conditions for harmonization of economic policies to be welfare-improving. As an application, it is shown that under circumstances in which harmonization is known to be welfare-improving when taxes are levied on a...

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This paper shows that under imperfect competition the welfare effects of indirect tax harmonization may depend crucially on whether taxes are levied by the destination or the origin principle. In a standard model of imperfect competition, while harmonization always makes at least one country...