The paper empirically analyzes whether electoral rules make legislators differently responsive to changes in fiscal incentives. Key to the analysis are two unique reforms in the German state of Lower Saxony which changed (i) the municipal charter by replacing the council-manager system...

Conventional wisdom has it that proportional representation leads to more coalition governments and so to greater government spending, especially in redistributive categories favoured by special-interest groups. In contrast, we show in a theoretical model that first-past-the-post systems of...

We develop a general equilibrium model of trade with multiple countries and industries in the spirit of Eaton and Kortum (2002) and Bernard, Eaton, Jensen, and Kortum (2003). We structurally estimate the parameters of the model and calibrate it to data on 33 OECD countries and one country that...

This paper studies the effect of sharing a common native language on international trade. Switzerland hosts three major native language groups which adjoin countries sharing the same native majority languages. In regions close to the internal language border the alternate major language is...

We propose a Pareto-improving policy which reduces the overall wage tax burden in an economy with intergenerational trade in a fixed factor of production, here labelled as land. We analyse a second-best environment in which the government cannot resort to non-distortionary land taxes. Reducing...

We propose a Pareto-improving policy which reduces the overall wage taxburden in an economy with intergenerational trade in a fixed factor ofproduction, here labelled as land. We analyse a second-best environmentin which the government cannot resort to non-distortionary land taxes.Reducing the...

The pressure on Switzerland to reform the tax treatment of those companies with a special cantonal tax status has increased substantially over the last years. One element in the current discussion regarding the reform of the corporate tax system is the introduction of a licence box, in which...

In earlier literature, the suggested Pareto improvements in pay-as-you- go (PAYG) systems have relied on the presence of externalities or the possibility of intragenerational redistribution. We show that neither assumption is necessary in an economy with intergenerational trade in a fixed factor...

The paper provides an equilibrium analysis of how countries compete for migrants. The type of competition (tax or transfer competition) depends on whether the competing countries have similar policy preferences. With symmetric preferences, countries compete in taxes for migrants. With asymmetric...

Using an agency model of firm behavior, the paper analyzes whether the cost of investment should be tax exempt. The findings suggest that, when managers engage in wasteful capital expenditures, welfare may decline if the cost of investment is tax deductible, as commonly advocated. The extent to...