Tax competition and tax coordination : when countries differ in size
AbstractThe purpose of this paper is to develop a model that isrich enough to capture some of the central features of the interaction between national tax systems in an integrated world but simple enough to yield sharp insights into some of the central questions which that interaction raises. The underlying theme is the comparison between tax competition and tax cooperation. The model itself focuses on the role of the relative sizes of the economies involved. The paper consists of seven sections. Section 1 serves as an introduction. It states the paper's objectives, cites the findings of other recent studies on the subject, and lists some of the central questions raised by the economic integration of multiple countries in regard to taxation. Section 2 describes the model created by the authors. Sections 3 and 4 characterize and investigate the outcome under unrestricted tax competition, modelled as a non-cooperative (Nash) equilibrium in tax-setting. Partial measures of tax coordination are then examined in Section 5. Section 6 characterizes the jointly optimal tax structure, which suggests that the optimal joint response to freer cross-border trade may be to do absolutely nothing. Section 7 concludes by addressing some of the questions mentioned in the introduction, based on the results of the application of the model.
Download InfoIf 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.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 738.
Date of creation: 31 Aug 1991
Date of revision:
Public Sector Economics&Finance; Environmental Economics&Policies; Economic Theory&Research; National Governance; Urban Economics;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral 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: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.