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Cooperative and Competitive Policies in the EU : The European Siamese Twin ?

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Author Info
Lejour, A. (Tilburg University, Center for Economic Research)

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Abstract

With the completion of the internal market many possibilities for the EU member states to protect their markets against imports are restricted or even eliminated. This gives, however, member states the incentive to use other policy instruments. This paper analyzes the effect of liberalizing trade barriers on decentralized redistributive policies using a two-country model with an integrated commodity market. It shows that redistributive policies become more competitive, if further liberalization of markets takes place, while these markets are already relatively integrated. This leads to the interesting paradox that more cooperative trade policies imply more competitive redistributive policies. However, if markets are nearly not integrated, it is possible that liberalization reduces tax competition.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 20.

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Date of creation: 1995
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Handle: RePEc:dgr:kubcen:199520

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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.:

  1. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law & Economics, University of Chicago Press, vol. 23(2), pages 209-87, October.
    Other versions:
  2. Markusen, James R. & Venables, Anthony J., 1986. "Trade Policy with Increasing Returns and Imperfect Competition: Contradictory Results from Competing Assumptions," CEPR Discussion Papers 120, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Wildasin, David, 1993. "Fiscal competition and interindustry trade," Regional Science and Urban Economics, Elsevier, vol. 23(3), pages 369-399, July. [Downloadable!] (restricted)
  4. Torsten Persson & Guido Tabellini, 1992. "Federal fiscal constitutions part 1: risk sharing and moral hazard," Discussion Paper / Institute for Empirical Macroeconomics 72, Federal Reserve Bank of Minneapolis. [Downloadable!]
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  5. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-85, December. [Downloadable!] (restricted)
  6. Ghosh, Atish R., 1991. "Strategic aspects of public finance in a world with high capital mobility," Journal of International Economics, Elsevier, vol. 30(3-4), pages 229-247, May. [Downloadable!] (restricted)
  7. Mintz, Jack & Tulkens, Henry, 1986. "Commodity tax competition between member states of a federation: equilibrium and efficiency," Journal of Public Economics, Elsevier, vol. 29(2), pages 133-172, March. [Downloadable!] (restricted)
  8. Lejour, A., 1995. "Social Insurance and the Completion of the Internal Market," Discussion Paper 61, Tilburg University, Center for Economic Research. [Downloadable!]
  9. Arnott, Richard & Grieson, Ronald E., 1981. "Optimal fiscal policy for a state or local government," Journal of Urban Economics, Elsevier, vol. 9(1), pages 23-48, January. [Downloadable!] (restricted)
  10. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August. [Downloadable!] (restricted)
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  1. Lejour, A., 1995. "Social Insurance and the Completion of the Internal Market," Discussion Paper 61, Tilburg University, Center for Economic Research. [Downloadable!]
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