IDEAS home Printed from https://ideas.repec.org/a/oup/jecgeo/v20y2020i3p711-732..html
   My bibliography  Save this article

Fiscal interactions in the short and the long run: evidence from German reunification
[The tax gradient: spatial aspects of fiscal competition]

Author

Listed:
  • Thushyanthan Baskaran

Abstract

This paper uses the quasi-experiment of Germany’s reunification to test for strategic interactions in local taxation. After reunification, East-German municipalities were allowed to choose, for the first time in decades, local business and property tax rates. I explore whether the tax rates they chose were influenced by the tax rates in adjacent West-German municipalities. The results show that East-German municipalities mimicked the business tax rates of their western neighbors immediately after reunification, but not in later years. I find no evidence for interactions in property tax rates. These results are broadly consistent with models of social learning in fiscal policy.

Suggested Citation

  • Thushyanthan Baskaran, 2020. "Fiscal interactions in the short and the long run: evidence from German reunification [The tax gradient: spatial aspects of fiscal competition]," Journal of Economic Geography, Oxford University Press, vol. 20(3), pages 711-732.
    • Handle: RePEc:oup:jecgeo:v:20:y:2020:i:3:p:711-732.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jeg/lby068
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Massimiliano Ferraresi & Massimiliano Mazzanti & Matteo Mazzarano & Leonzio Rizzo & Riccardo Secomandi, 2020. "Political cycles and yardstick competition in the recycling of waste. Evidence from Italian provinces," Working papers 93, Società Italiana di Economia Pubblica.
    2. Ferraresi Massimiliano, 2021. "Political Budget Cycle, Tax Collection, and Yardstick Competition," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(3), pages 1149-1161, July.
    3. Ferraresi, Massimiliano, 2023. "JUE Insight: Immigrants, social transfers for education, and spatial interactions," Journal of Urban Economics, Elsevier, vol. 136(C).

    More about this item

    Keywords

    Strategic interactions; tax mimicking; business taxes; property taxes; German reunification;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jecgeo:v:20:y:2020:i:3:p:711-732.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/joeg .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.