Conventional economic wisdom holds that the optimal level of business taxes recovers the exact cost of providing public services to businesses. I present an alternative model and derive conditions under which a self-interested decisionmaker picks tax rates to maximize an objective function that...

Do citizens engage in comparative performance evaluation across local governments? And if they do, how can we disentangle this behavior from other forms of strategic interactions among local governments or simple spatial correlation across neighboring jurisdictions? We use spatial econometrics...