Exit and Voice. Yardstick versus Fiscal Competition across Governments
AbstractPoliticians are disciplined through the electoral system. But this is often not enough to eliminate political rents. Economists suggest that competition across governments may also help. But intergovernmental competition can take two forms, through tax competition (exit) or yardstick competition (voice). We show these two forms may not, and in general do not, work in the same direction. Tax competition may reduce the screening properties of yardstick competition.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2069.
Date of creation: 2007
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