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Partial Tax Harmonization Through Infrastructure Coordination

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  • Patricia Sanz‐Córdoba
  • Bernd Theilen

Abstract

In this article, we analyze the role of infrastructure coordination in facilitating partial tax harmonization within a coalition of asymmetric jurisdictions. Two main results are obtained. First, productivity asymmetries represent a serious handicap for partial tax harmonization that can be remedied by coordinating nontax instruments when they allow to reduce these asymmetries. Second, infrastructure coordination through the choice of a common investment level is particularly indicated when asymmetries between potential members of a tax coalition are large. The current usage of European Union (EU) structural funds orientated to reduce regional infrastructure deficits is therefore suitable to facilitate tax harmonization within the EU. (JEL H87, H54, H21)

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  • Patricia Sanz‐Córdoba & Bernd Theilen, 2018. "Partial Tax Harmonization Through Infrastructure Coordination," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1399-1416, April.
    • Handle: RePEc:bla:ecinqu:v:56:y:2018:i:2:p:1399-1416
    DOI: 10.1111/ecin.12554
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    Cited by:

    1. Sanz-Córdoba, Patricia, 2020. "The role of infrastructure investment and factor productivity in international tax competition," Economic Modelling, Elsevier, vol. 85(C), pages 30-38.
    2. Marta Lukáčová & Jaroslav Korečko & Sylvia Jenčová & Mária Jusková, 2020. "Analysis of selected indicators of tax competition and tax harmonization in the EU," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 123-137, September.
    3. Sanz Córdoba, Patricia & Theilen, Bernd, 1965-, 2017. "Strategic Responses to International Tax Competition: Fiscal (De) Centralization versus Partial Tax Harmonization," Working Papers 2072/306513, Universitat Rovira i Virgili, Department of Economics.
    4. Hory, Marie-Pierre & Organització de Cooperació i Desenvolupament Econòmic, Països de l', 2017. "International tax competition: A reappraisal," Working Papers 2072/290763, Universitat Rovira i Virgili, Department of Economics.
    5. Ogawa, Hikaru, 2021. "Partial environmental tax coordination and political delegation," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).

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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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