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Fiscal and Regulatory Competition: Theory and Evidence

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Author Info
Wallace E. Oates

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Abstract

This paper reviews first the theoretical literature and then the empirical studies of interjurisdictional competition among governments. Of central interest is the normative question of whether fiscal and regulatory competition promotes a more efficient functioning of the public sector or whether it is the source of distortions in the public and private sectors. This is a contentious issue; both the theoretical and empirical literature, while providing some rich insights into the potential impact of such competition, do not give us an unambiguous answer to the general normative question. The concluding section offers the author's thoughts on all this with a leaning towards the view that such competition is, on balance, efficiency-enhancing. Copyright Verein für Socialpolitik und Blackwell Publishers Ltd 2002

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/1468-2516.00100
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Publisher Info
Article provided by Blackwell Publishing in its journal Perspektiven der Wirtschaftspolitik.

Volume (Year): 3 (2002)
Issue (Month): 4 (November)
Pages: 377-390
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Handle: RePEc:bla:perwir:v:3:y:2002:i:4:p:377-390

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  1. Wallace Oates, 2005. "Toward A Second-Generation Theory of Fiscal Federalism," International Tax and Public Finance, Springer, vol. 12(4), pages 349-373, August. [Downloadable!] (restricted)
  2. Libman, Alexander, 2009. "Constitutions, Regulations, and Taxes: Contradictions of Different Aspects of Decentralization," MPRA Paper 15854, University Library of Munich, Germany. [Downloadable!]
  3. Martina Eckardt, 2003. "The Open Method of Co-ordination on Pensions - An Economic Analysis of its Effects on Pension Reforms," Thuenen-Series of Applied Economic Theory 39, University of Rostock, Institute of Economics, Germany. [Downloadable!]
  4. Edmark, Karin & Ågren, Hanna, 2006. "Identifying Strategic Interactions in Swedish Local Income Tax Policies," Working Paper Series 2006:22, Uppsala University, Department of Economics. [Downloadable!]
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