The Role of International Public Goods in Tax Cooperation
AbstractWe provide a quantitative assessment of the welfare cost of tax competition or, equivalently, the welfare benefit of international tax policy cooperation. We use a simple multi-country general equilibrium model of a world economy, in which there are two types of cross-country spillovers: the first one generated by the international capital mobility and, the second one, by the presence of international public goods. In the absence of international public goods, although welfare in the non-cooperative case is typically lower than in the cooperative case, the welfare difference is negligible quantitatively. Things change drastically, both quantitatively and qualitatively, once we introduce international public goods. Now, there can be big benefits from cooperation and welfare effects cease to be monotonic. (JEL classification codes: F02, H2, H4) Copyright The Author 2009. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: firstname.lastname@example.org, Oxford University Press.
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Bibliographic InfoArticle provided by CESifo in its journal CESifo Economic Studies.
Volume (Year): 56 (2010)
Issue (Month): 2 (June)
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Other versions of this item:
- Kammas, Pantelis & Philippopoulos, Apostolis, 2009. "The role of international public goods in tax cooperation," MPRA Paper 15844, University Library of Munich, Germany.
- H4 - Public Economics - - Publicly Provided Goods
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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