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Does technical assistance weaken tax competition?

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  • Shingo Yamazaki

    (Graduate School of Economics and Business Administration, Hokkaido University)

Abstract

This paper explores the relationship between technical assistance and tax competition between countries, and finds that technical assistance can be given voluntarily without altruism or moral obligation since technical assistance can weaken tax competition and improve the societal welfare. Technical assistance is provided by a country with high productivity to a country with low productivity to help in the production of public goods. This technical assistance would lower the marginal cost of public goods in the recipient country. This effect would lead to the recipient country raising its tax rate and the donor country too would then increase its tax rate in response to this change.

Suggested Citation

  • Shingo Yamazaki, 2016. "Does technical assistance weaken tax competition?," Economics Bulletin, AccessEcon, vol. 36(3), pages 1595-1602.
    • Handle: RePEc:ebl:ecbull:eb-16-00205
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    References listed on IDEAS

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    More about this item

    Keywords

    Tax competition; Technical assistance;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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