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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 elevates regional public revenue disparities under horizontal and...
Persistent link: https://www.econbiz.de/10012722478
This paper derives an efficient intergovernmental transfer system within tax competition settings under the endogenization of the number of regions that engage in tax competition. In our theoretical model, two externalities arise. These include fiscal externalities and the externalities...
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this pattern and tests them in a natural experiment from Germany. The first hypothesis is that fiscal redistribution … the perspective of local governments; the second is that a desire for redistribution within jurisdictions induces a shift … taxation serves as a Pigouvian intervention to correct externalities. The empirical analysis supports redistribution between …
Persistent link: https://www.econbiz.de/10013315380
Federal and state governments often differ in the capacity to pre-commit to expenditure and tax policy. Whether the implied sequence of public decisions has any efficiency implications is the subject of this paper. We resort to a setting which contrary to most of the literature does not exhibit...
Persistent link: https://www.econbiz.de/10013316943
Federal fiscal arrangements are argued to give rise to tacit collusion among competing Leviathans (Brennan and Buchanan, The Power to Tax, CUP, 1980). Though frequently encountered in academic and policy discussions, the cartelization hypothesis has rarely been scrutinized formally. This paper...
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