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Political Competition, Tax Salience and Accountability: Theory and Some Evidence from Italy

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  • Emanuele Bracco
  • Francesco Porcelli
  • Michela Redoano

Abstract

This paper argues that high political competition does not necessarily induce policy makers to perform better as previous research has shown. We develop a political economy model and we show that when political competition is tight, and elected politicians can rely on more tax instruments, they will substitute salient taxes with less salient ones, which are not necessarily preferable. These predictions are largely confirmed using a dataset on Italian municipal elections and taxes.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2013/wp-cesifo-2013-03/cesifo1_wp4167.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4167.

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Date of creation: 2013
Date of revision:
Handle: RePEc:ces:ceswps:_4167

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Keywords: political competition; government; accountability; tax salience;

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References

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Cited by:
  1. Sutirtha Bagchi, 2013. "The Effects of Political Competition on the Funding and Generosity of Public-Sector Pension Plans," 2013 Papers pba941, Job Market Papers.
  2. Martin Altemeyer-Bartscher, 2014. "Fiscal Equalization, Tax Salience, and Tax Competition," IWH Discussion Papers 3, Halle Institute for Economic Research.

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