A theoretical analysis considers the impact of a typical system of redistributive fiscal equalizationʺ transfers on the taxing effort of local jurisdictions. More specifically, it shows that the marginal contribution rate, i.e. the rate at which an increase in the tax base reduces those...

This paper surveys the nexus between tax competition and the fiscal constitution. We distinguish various approaches to competition between jurisdictions and provide a critique of evolutionary approaches to 'systems competition'. In the main part of the paper, a simple model of horizontal tax...

This paper assesses the interactions of horizontal fiscal equalisation schemes with debt policy by sovereign regional governments. Local public goods are either financed by debt or taxation. A horizontal equalisation scheme eleviates regional public revenue disparities under horizontal and...