In a common market with costless mobility of all factors, regional governments can attract mobile firms by granting subsidies which must be financed out of wage taxes on mobile labour. Since firms locate where subsidies are highest and workers settle where taxes are lowest, government are forced...

In a common market with costless mobility of all factors, regional governments can attract mobile firms by granting subsidies which must be financed out of wage taxes on mobile labour. Since firms locate where subsidies are highest and workers settle where taxes are lowest, government are forced...

This is a comment on Urs Schweizer's paper with the above title presented at the International Seminar on the New Institutional Economics in Wallerfangen, May/June 1989. After focusing on problems in selecting rules and outcomes of rules, it discusses the Buchanan-Tullock issue of...