We study the impact of tax competition on equilibrium taxes and welfare, focusing on the jurisdictional fragmentation of federations. In a representative-agent model of fiscal federalism, fragmentation among jurisdictions with benevolent tax-setting authorities unambiguously reduces welfare. If,...

We study the impact of tax competition on equilibrium taxes and welfare, focusing on the jurisdictional fragmentation of federations. In a representative-agent model of fiscal federalism, fragmentation among jurisdictions with benevolent tax-setting authorities unambiguously reduces welfare. If,...

We study the impact of tax competition on equilibrium taxes and welfare, focusing on the jurisdictional fragmentation of federations. In a representative-agent model of fiscal federalism, fragmentation among jurisdictions with benevolent tax-setting authorities unambiguously reduces welfare. If,...

This papers analyzes the disciplining role of elections under asymmetric information when voters have to rely on relative performance evaluation to tame the Leviathan. If elections are held in different regions, voters are able to reduce political rents below the Leviathan outcome by carrying...

In this paper, we test empirically for competition among Chinese provinces embedded in a centralized political system. To motivate the empirical work, we adapt Besley and Case's model (American Economic Review, 1995) to a model of yardstick competition ‘from the top’. In this model, the...

This paper examines how capital tax competition affects jurisdiction formation. We describe a locational model of public goods provision, where jurisdictions are represented by coalitions of consumers with similar tastes, and where the levels of taxation and local public goods provision within...

We examine both vertical and horizontal tax competition over time by studying the strategic response of county sales taxation to state sales taxes and to cross-border neighboring municipalities' combined (state and county) taxes. Using county and state sales tax data from 2003 through 2009, we...

While some scholars argue that fiscal decentralization gave Chinese local officials strong incentives to promote local economic growth, traditional fiscal federalism theories are not directly relevant to explain such an effect in the particular context of China. In this paper, we explain the...

We analyze the impact of large firms on business tax rates using data from German mu-nicipalities in Hesse in 1998-2005. Results suggest that business tax rates decrease with tax-payers’ concentration, indicating strong local lobbying power of large firms.

This paper investigates efficiency losses caused by independent tax systems and proposes ways of remedying this coordination failure Whereas the harmful effects of tariff competition have been thoroughly explored in the trade policy literature little is known about the externalities that result...