The present paper analyzes expectations of German politicians about the German debt brake (Schuldenbremse), which became part of the German constitution in 2009. This fiscal rule requires the federal government and the German states to run a (cyclically adjusted) budget deficit of no more than...

The provisions of the German financial equalization system (Länderfinanzausgleich), a specific form of a fiscal union among the federal states (Länder), will expire in 2019. In this paper, we assess the effects of the system as well as of reform proposals on key macroeconomic variables and...

Whenever a central government faces a sub-unit in financial distress, the unpleasant question arises of whether to assist the unit or not. On the one hand, resisting to bail out the unit may lead to default or bankruptcy, which could be very costly both economically and politically. On the other...

In a context in which environmental protection have become in an important issue, the paper analyses which would be the optimal division of environmental policymaking functions among the different government levels. From the point of view of the fiscal federalism theory, we will design the most...

This paper will analyse the importance that the Regional Solidarity Funds have acquired in the financial systems of those Autonomous Communities able to benefit from them, and the influence that these Funds have had in their development. In addition, the special role that Structural Funds have...

The tax auditing parameters have scarcely been analyzed by the literature as relevant policy-making instruments; however the enforcement strategies are crucial elements of the tax burden. In this paper we show that in a federal framework the tax auditing policies could represent additional tools...

The identification of strategic interactions among local governments is typically plagued by endogeneity problems. This paper proposes a quasi-experimental strategy to identify independent personal income tax setting by Swiss municipalities making use of the multi-tier federal system. State...

The literature on horizontal tax interdependencies offered limited attention to the interactions on administrative policies although they play an important role in determining the total tax revenues collected. The incentive for sub-central tax authorities to share relevant taxpayer-specific...

We analyze productivity enhancing public expenditure in a spatial economic model with labor mobility, firm-specific increasing returns to scale, and transport costs. Building on Krugman (1991), Fujita, Krugman and Venables (1999) and Redding (2016), we compare optimal investment and tax policies...

While many studies explored impacts of political quotas for females, often with ambiguous results, underlying mechanisms and long-term effects have received relatively little attention. Nation-wide data from India spanning a 15-year period allow us to explore how reservations affect leader...