We study the effect of direct democracy on local taxation. Our setting is the German federal state of Bavaria, where in 1995 a state-wide referendum introduced the possibility to initiate direct democratic legislation into the local government code. Relying on a sample of all Bavarian...

Den Kantonen geht es viel besser als sie sagen: Systematisch schätzen sie ihre Einnahmen zu tief ein, weisen zu tiefe Vermögen aus und rechtfertigen damit unsinnige Sparpläne. Dies zeigt eine ökonomische Analyse des SGB.

We study the tension between fiscal decentralization and progressive taxation. We present a multi-community model in which households differ in incomes and housing preferences and in which the local income tax rate is a function of an exogenous progressive tax schedule and an endogenous local...