The role of international public goods in tax cooperation
AbstractWe provide a quantitative assessment of the welfare cost of tax competition or, equivalently, the welfare benefit of international tax policy cooperation. We use a simple multi-country general equilibrium model of a world economy, in which there are two types of cross-country spillovers: the first one is generated by international capital mobility and the second by the presence of an international public good. In the absence of international public goods, although welfare in the non-cooperative case is typically lower than in the cooperative case, the welfare difference is negligible quantitatively. Things change drastically, both quantitatively and qualitatively, once we introduce international public goods. Now, there can be big benefits from cooperation and welfare effects cease to be monotonic.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 15844.
Date of creation: 15 May 2009
Date of revision:
Capital mobility; Tax competition; Public goods; Welfare;
Other versions of this item:
- Pantelis Kammas & Apostolis Philippopoulos, 2010. "The Role of International Public Goods in Tax Cooperation," CESifo Economic Studies, CESifo, vol. 56(2), pages 278-299, June.
- H4 - Public Economics - - Publicly Provided Goods
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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