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Fiscal competition in a transition economy

Author

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  • Laura Solanko

    (Bank of Finland)

Abstract

The paper analyses fiscal competition for mobile capital between identical regions in a transition country. A framework similar to Keen- Marchand (1997) is used to analyse welfare effects of regional competition. It is shown that in very early transition when the share of the old sector is overwhelming, consumers in a transition economy may be better off in a competitive equilibrium. The decision-makers, however, would prefere to coordinate their fiscal policies.

Suggested Citation

  • Laura Solanko, 2002. "Fiscal competition in a transition economy," Public Economics 0209002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0209002
    Note: Type of Document - SWP; prepared on PC; pages: 48
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0209/0209002.pdf
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    References listed on IDEAS

    as
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    2. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
    3. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-1162, December.
    4. Brown, J David & Earle, John, 2000. "Competition And Firm Performance: Lessons From Russia," CEPR Discussion Papers 2444, C.E.P.R. Discussion Papers.
    5. Mr. Liam P. Ebrill, 1999. "Tax Reform in the Baltics, Russia, and Other Countries of the Former Soviet Union," IMF Occasional Papers 1999/010, International Monetary Fund.
    6. Castanheira, Micael & Roland, Gerard, 2000. "The Optimal Speed of Transition: A General Equilibrium Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 219-239, February.
    7. Jack High (ed.), 2001. "Competition," Books, Edward Elgar Publishing, number 1751.
    8. Shleifer, Andrei, 1997. "Government in transition," European Economic Review, Elsevier, vol. 41(3-5), pages 385-410, April.
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    10. Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October.
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    13. repec:zbw:bofitp:2001_004 is not listed on IDEAS
    14. George R. Zodrow & Peter Mieszkowski, 2019. "Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 17, pages 525-542, World Scientific Publishing Co. Pte. Ltd..
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    19. Desai, Raj M. & Goldberg, Itzhak, 2000. "The vicious circles of control - regional governments and insiders in privatized Russian enterprises," Policy Research Working Paper Series 2287, The World Bank.
    20. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland Institute for Emerging Economies (BOFIT).
    21. Mr. George C. Tsibouris & Mr. Vito Tanzi, 2000. "Fiscal Reform Over Ten Years of Transition," IMF Working Papers 2000/113, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sergii Slukhai, 2009. "Inter-Location Small Business Tax Rate Variation in Ukraine: What Is Behind It?," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 49-71.
    2. Irina N. Ilina & Carol S. Leonard & Evgenij E. Plisetskij, 2014. "Russian Regional Resilience: Finance, Cooperation And Resource Abundance (A Case Study Of Khanty-Mansiysk)," HSE Working papers WP BRP 15/PA/2014, National Research University Higher School of Economics.
    3. Libman, Alexander, 2008. "Federalism and regionalism in transition countries: A survey," MPRA Paper 29196, University Library of Munich, Germany.

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    More about this item

    Keywords

    tax competition; fiscal competition; transition;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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