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Fiscal Competition in Space and Time

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  • David Wildasin

    (University of Kentucky)

Abstract

This paper analyzes fiscal competition among numerous spatially- separated jurisdictions in an explicitly dynamic framework. The degree of factor mobility between jurisdictions is imperfect because it is costly and time-consuming to adjust factor stocks. Even if it is harmful in the long run, taxation of mobile factors redistribute income in favor of the owners of immobile resources in the short run. The optimal tax on mobile factors is lower, the faster the speed with which factors adjust to fiscal policy. Anticipated taxes are less beneficial than those that can be imposed unexpectedly.

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File URL: http://128.118.178.162/eps/pe/papers/0112/0112004.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 0112004.

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Date of creation: 10 Dec 2001
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Handle: RePEc:wpa:wuwppe:0112004

Note: Type of Document - ; prepared on TeX; figures: request from author
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Web page: http://128.118.178.162

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Keywords: fiscal competition tax competition;

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References

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  1. Hercowitz, Zvi & Pines, David, 1991. "Migration with fiscal externalities," Journal of Public Economics, Elsevier, vol. 46(2), pages 163-180, November.
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  15. Wildasin, David E. & Wilson, John Douglas, 1996. "Imperfect mobility and local government behaviour in an overlapping-generations model," Journal of Public Economics, Elsevier, vol. 60(2), pages 177-198, May.
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