Does Fiscal Decentralization Constrain Leviathan? Evidence from Local Property Tax Competition
AbstractThis paper reexamines whether fiscal decentralization constrains Leviathan government. Using panel data for Pennsylvania, we compare actual property tax rates to the Leviathan revenue-maximizing rates for municipalities, school districts, and counties. Using spatial econometric methods we also estimate the degree of spatial dependence at the three levels of local government. We find that fiscal decentralization results in stronger intergovernmental competition and lower tax rates. We also find evidence of collusion among school districts that exhibit high interdependence but also high tax rates. This calls into question the current literature's blind use of spatial dependence as a measure of intergovernmental competition.
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 Department of Economics, West Virginia University in its series Working Papers with number 10-16.
Length: 45 pages
Date of creation: 2010
Date of revision:
Fiscal decentralization; Leviathan; Tax competition;
Find related papers by JEL classification:
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-02 (All new papers)
- NEP-GEO-2010-10-02 (Economic Geography)
- NEP-PBE-2010-10-02 (Public Economics)
- NEP-URE-2010-10-02 (Urban & Real Estate Economics)
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eran Guse) The email address of this maintainer does not seem to be valid anymore. Please ask Eran Guse to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.