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This note studies the choice of tax structure in a majority voting model with tax competition. Regions may tax mobile capital or immobile labor. Individuals differ with respect to their relative endowments of labor and capital. Even though a lump sum tax is available, the equilibrium capital tax...
Persistent link: https://www.econbiz.de/10011437882
This paper takes a mechanism design approach to federalism and assumes that local preferences are the private … information of local jurisdictions. Contractual federalism is defined as a strategy-proof contract among the members of the …-proof mechanisms, but they are socially worse than non cooperative decentralization. Federal mechanisms which are neutral and robust to …
Persistent link: https://www.econbiz.de/10008860044
decentralization ; fiscal federalism ; vertical interactions ; partial decentralization ; elections …Fiscal decentralization is high on the agenda in policy fora. This paper empirically investigates the underlying causes … of fiscal decentralization, based on the predictions of a simple political economy model. We argue that the likeliness …
Persistent link: https://www.econbiz.de/10009301206
traditional, expenditure-related motives for centralization considered in the fiscal federalism literature is present. If central …
Persistent link: https://www.econbiz.de/10011523762
traditional, expenditure-related motives for centralization considered in the fiscal federalism literature is present. If central …
Persistent link: https://www.econbiz.de/10011523838
We propose a theory of tax centralization in politico-economic equilibrium. Taxation has dynamic general equilibrium implications which are rationally internalized at the federal, but not at the regional level. The political support for taxation therefore differs across levels of government....
Persistent link: https://www.econbiz.de/10011810615
Alienation to politics weakens political competition and can undermine the acceptance and legitimacy of democracy as a political system. Governance and representation problems at the local level cause part of citizens' lack of power and political alienation. Citizens have local power if they can...
Persistent link: https://www.econbiz.de/10014068720
This paper overviews theoretical and empirical contributions that study political borders from an economic perspective. It reviews theories of the number and size of nations focused on the trade-off between economies of scale in public-good provision and heterogeneity of preferences over public...
Persistent link: https://www.econbiz.de/10013473678
This paper overviews theoretical and empirical contributions that study political borders from an economic perspective. It reviews theories of the number and size of nations focused on the trade-off between economies of scale in public-good provision and heterogeneity of preferences over public...
Persistent link: https://www.econbiz.de/10014290075
In his seminal work on fiscal federalism, Oates (1972) addressed the so-called Decentralization Theorem, which states …
Persistent link: https://www.econbiz.de/10014058981