ODecentralization is a fairly recent process in Peru that has been driven by a mixture of democratization, state modernization, increased accountability in service delivery, and regional economic development objectives. Politics has also played an important role. Overall, the general approach to...

The main focus of this paper is on the potential role that taxation and public expenditure policies play in general in affecting income distribution. We find that progressive personal income taxes and corporate income taxes reduce income inequality. The effect of corporate income taxes seems to...

In this paper we argue that renter’s illusion may not be a form of asymmetric information neither irrationality but rather a way to include in our economic analysis evidence that while homo oeconomicus aims to do a good job of making choices, he frequently is not able to do that. Taxpayers do...

Subnational government fragmentation, associated with the small size of jurisdictions to take advantage of economies of scale in service delivery, is a commonly perceived problem in many decentralized systems around the globe. In this paper we use a large cross-section of countries to analyze...

This paper examines the potential tradeo between economic growth and income inequality in the design of tax structure by using a structural model and a large panel data set of 150 developed and developing countries for the period 1970-2009. Tax structure, which is treated as an endogenous...

This paper aims to provide empirical evidence on the extent and possible channels of tax competition among provincial governments in China. Using a panel of provincial- level data for 1993-2007, we nd strong evidence of strategic tax interaction among provincial governments. Tax policy is...

Despite the extensive international experience with the assignments of revenue sources to different levels of government, the public finance literature still lacks a general theory of revenue assignments. Two sets of arguments have been separately developed in the literature to explain and guide...

This paper examines the Stackelberg equilibrium for public input competition and compares it with the non-cooperative Nash equilibrium. Given two asymmetric regions, we show that under the Nash equilibrium, the more productive region tends to spend more on public input, which results in this...

China has been carrying out a significant fiscal decentralization policy for over three decades. However, reforms have largely concentrated on the revenue side of budgets, and generally they have not been coordinated with an explicit strategy for the decentralization of expenditure assignments....

The main questions addressed in this paper are the identification of the main determinants of jurisdictional fragmentation as presently observed across countries and how well those findings line up with the predictions of the expanded standard model of optimal jurisdiction size. To our...