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Non-discriminatory donation relief and strategic commitment under political competition

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  • Giovanniello, Monica A.
  • Perroni, Carlo
  • Scharf, Kimberley
  • Slivinski, Al

Abstract

Tax relief for private donations towards the provision of collective goods can protect minorities from majority-driven outcomes in which tax revenues are exclusively used to finance the provision of public goods that are only valued by the majority. In this paper we show that non-discriminatory tax relief for private donations can arise in political equilibrium as a strategic commitment device aimed at creating and supporting political alliances that would not otherwise be able to coalesce.

Suggested Citation

  • Giovanniello, Monica A. & Perroni, Carlo & Scharf, Kimberley & Slivinski, Al, 2019. "Non-discriminatory donation relief and strategic commitment under political competition," European Journal of Political Economy, Elsevier, vol. 58(C), pages 164-177.
    • Handle: RePEc:eee:poleco:v:58:y:2019:i:c:p:164-177
    DOI: 10.1016/j.ejpoleco.2018.10.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Tax relief; Private donations; Strategic policy commitment;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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