The Race to the Bottom and its Impact on the Provision of Public Services in Romania
AbstractThe literature is addressed by tax competition to attract capital and the measures taken in this regard. These measures aim, in most cases, reducing tax rates. Most authors, especially the classics, believes that this reduction creates an underprovision of goods and services and addresses the problem in terms of their level. Very few scholars have revealed that this race to the bottom lead to a different structure in delivering public services. Thus, from the idea of Keen-Marchand (1997), this paper addresses this issue, using as basic data in the Romanian economy, through a regression model. The analysis results show that the race to reduce the tax burden, in which Romania joined in the impact of tax competition, leads to an underprovision welfare services aimed directly at a taxpayer and those aimed at infrastructure overprovision.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Petrosani, Romania in its journal Annals of the University of Petrosani - Economics.
Volume (Year): 11 (2011)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.upet.ro/
tax competition; tax rates; public services;
Find related papers by 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Keen, M. & Marchand, M., .
"Fiscal competition and the pattern of public spending,"
CORE Discussion Papers RP
-1284, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October.
- KEEN, Michael & MARCHAND, Maurice, 1996. "Fiscal Competition and the Pattern of Public Spending," CORE Discussion Papers 1996001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
- Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
- Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Imola Driga).
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.