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....

We propose a theory of tax centralization and inter governmental grants in politico-economic equilibrium. The cost of taxation differs across levels of government because voters internalize general equilibrium effects at the central but not at the local level. This renders the degree of tax...

We propose a theory of tax centralization and inter governmental grants in politico-economic equilibrium. The cost of taxation differs across levels of government because voters internalize general equilibrium effects at the central but not at the local level. This renders the degree of tax...

We propose a theory of tax centralization and inter governmental grants in politico-economic equilibrium. The cost of taxation differs across levels of government because voters internalize general equilibrium effects at the central but not at the local level. This renders the degree of tax...

We study optimal fiscal policy in an economy where (i) search frictions create a coordination problem and generate multiple, Pareto-ranked equilibria and (ii) the government finances the provision of a public good by taxing market activity. The government must choose the tax rate before it knows...

Tiebout's basic claim was that when public goods are local, competition between jurisdictions solves the free riding problem in the sense that equilibria exist and are always Pareto efficient. Unfortunately, the literature does not quite support this conjecture. For finite economies, one must...

We propose a two dimensional infinite horizon model of public consumption in which investments are decided by a winner-take-all election. Investments in the two public goods create a linkage across periods and parties have different specialities. We show that the incumbent party vote share...

This paper examines the learning dynamics of boundedly rational agents, who are asked to voluntarily contribute to a discrete public good. In an incomplete information setting, we discuss contribution games and subscription games, the latter including a money-back guarantee in case of provision...

In this paper we analyze the optimal interplay between the publie and private enforceement of property rights. In doing so we endogenize the distinction between public and club goods on the one and private and common-pool goods on the other hand. The private enforcement of property rights is...

We study the. Incentive effects of endogenous group formation in a voluntary contributon experiment. Subjects are given information on the past contributions of others and allowed to express a preference for partners. On the basis of the stated preferences new groups are formed. We find that the...