Since the 1950s, the sales tax has become much more widely used as a source of state government revenue and the average sales tax rate has been greatly increased. During this period, the service sector has grown rapidly relative to other sectors of the economy. We hypothesize that increased...

Under reasonable assumptions about production technologies, international competition for factors of production will lead to convergence of per capita output. Is there an analogous process that leads to convergence of public sector activity? We provide a simple model that predicts convergence in...