This paper takes stock of the last 80 years of theoretical and policy literature on the issue of capital grants. In addition, we provide empirical evidence on changes in the relative importance of capital grants, and their impact on fiscal outcomes for a large number of countries. In particular,...

We first discuss a more nuanced view of the tax compliance game from the evolving perspective of behavioral economics. This discussion is followed by a more traditional analysis of issues related to taxation of the small drawing on recent insights and policy interventions. Our discussion...

In this paper we examine the Stackelberg equilibrium in a public input competition model. We demonstrate that the issue of over-provision of public inputs raised in the standard fiscal competition literature may be less strong than predicted, provided that competing jurisdictions are more likely...

The subnational dimension of infrastructure emerges as one of the greatest challenges in contemporary public finance policy and management. Given the localized nature of most infrastructures, ensuring its efficient provision represents a challenge for all countries irrespective of their level of...

The share of public investment spending at sub-national level has been slowly but steadily increasing over the past two decades across OECD countries. Degrees and forms of decentralization in infrastructure vary widely across countries, but all governments share a common objective, that is to...

Times change. In the words of an old English ballad, some things seem to have “turned upside down” in recent years. Since 2000, Latin America has become less unequal, with lower levels of poverty and likely greater economic mobility (Lustig, Lopez-Calvo and Ortiz-Juarez 2012), assisted in...

In this paper we review the structure of tax systems in Latin America and analyze their impact on the real economy-- economic growth, macro-economic stability, income redistribution and foreign direct investment--, and on the extent of informality –the size of the shadow economy—and ‘tax...

In the theoretical literature on government design, few variables have received more attention than the size of the polity. Since Plato’s famous prediction that the optimal size of a political unit should be 5040 free citizens, the list of thinkers concerned about state size would include...

This article studies the impact of vertical fiscal transfers on local tax effort in Mexico, considering evidence for municipalities in Sinaloa between 1993 and 2008. Based on cadastral information, gross added value and property taxes we create a “pure” indicator of fiscal effort which is...

The aim of this paper is to explore the recent move toward a system of dual income tax (DIT) in Japan, tracing back to the development of the individual income tax in the postwar period. Focus is upon very pragmatic considerations institutionally, rather than abstract theoretical arguments. In...