Advanced Search
MyIDEAS: Login

Decentralization and Tax Competition between Asymmetrical Local Governments

Contents:

Author Info

  • Clément Carbonnier

    ()
    (Université de Cergy-Pontoise, THEMA, Cergy-Pontoise cedex, France & Sciences Po, LIEPP, Paris, France)

Abstract

This article presents a model of tax competition between an arbitrarily large number of asymmetrical jurisdictions. Tax competition induces lower corporate taxes and lower public input provision than does tax coordination. This bias decreases with respect to the size and number of jurisdictions. Tax competition constitutes a cost of decentralization that may balance the gains presented by the decentralization theorem. A French panel of municipalities and intermunicipal jurisdictions is used to test these results, which are confirmed. Furthermore, the corporate tax increase due to cooperation leads to an increase in the corporate tax base: the fully decentralized situation is suboptimal.

Download Info

If 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.
File URL: http://pfr.sagepub.com/content/41/4/391.abstract
Download Restriction: no

Bibliographic Info

Article provided by in its journal Public Finance Review.

Volume (Year): 41 (2013)
Issue (Month): 4 (July)
Pages: 391-420

as in new window
Handle: RePEc:sae:pubfin:v:41:y:2013:i:4:p:391-420

Contact details of provider:

Related research

Keywords: fiscal federalism; tax competition; corporate taxes; public capital;

References

References listed on IDEAS
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.:
as in new window
  1. Barankay, Iwan & Lockwood, Ben, 2006. "Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons," CEPR Discussion Papers 5639, C.E.P.R. Discussion Papers.
  2. Matthieu Leprince & Thierry Madiès & Sonia Paty, 2007. "Business tax interactions among local governments : an empirical analysis of the French case," Working Papers 250925, Institut National de la Recherche Agronomique, France.
  3. Schwab, Robert M. & Oates, Wallace E., 1991. "Community composition and the provision of local public goods : A normative analysis," Journal of Public Economics, Elsevier, vol. 44(2), pages 217-237, March.
  4. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.
  5. Arzaghi, Mohammad & Henderson, J. Vernon, 2005. "Why countries are fiscally decentralizing," Journal of Public Economics, Elsevier, vol. 89(7), pages 1157-1189, July.
  6. Michael Smart, 1998. "Taxation and Deadweight Loss in a System of Intergovernmental Transfers," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 189-206, February.
  7. Matthieu Leprince & Thierry Madiès & Sonia Paty, 2007. "Business Tax Interactions Among Local Governments: An Empirical Analysis Of The French Case," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 603-621.
  8. Masayoshi Hayashi & Robin Boadway, 2001. "An empirical analysis of intergovernmental tax interaction: the case of business income taxes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 481-503, May.
  9. Todd M. Gabe & Kathleen P. Bell, 2004. "Tradeoffs between Local Taxes and Government Spending as Determinants of Business Location," Journal of Regional Science, Wiley Blackwell, vol. 44(1), pages 21-41.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:41:y:2013:i:4:p:391-420. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).

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.