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Political Fragmentation and the Evolution of National Tax Structures in the OECD

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  • John Ashworth

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  • Bruno Heyndels

    ()

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    Abstract

    This paper considers how tax structures in OECD countries change over time and how these changes are related to political fragmentation. Tax structures amongst OECD countries have become more uniform in the recent past (1965–1995) but it is less clear that this convergence satisfies time-series requirements. Evidence on stochastic convergence tends to suggest that there is evidence of persistence of shocks remaining over a considerable time period. A consideration of the countries where this persistence is most prevalent shows that there is significant correlation between high persistence and weak (coalition) governments, giving further weight to the theories of weak government. Copyright Kluwer Academic Publishers 2001

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    File URL: http://hdl.handle.net/10.1023/A:1011210722342
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    Article provided by Springer in its journal International Tax and Public Finance.

    Volume (Year): 8 (2001)
    Issue (Month): 4 (August)
    Pages: 377-393

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    Handle: RePEc:kap:itaxpf:v:8:y:2001:i:4:p:377-393
    Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102915

    Keywords: tax structures; persistence; weak government hypothesis; fragmented government;

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    1. de Haan, Jakob & Sturm, Jan-Egbert & Beekhuis, Geert, 1999. "The Weak Government Thesis: Some New Evidence," Public Choice, Springer, vol. 101(3-4), pages 163-76, December.
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    6. Volkerink, Bjørn & Haan, Jacob de, 2000. "Fragmented government effects on fiscal policy: new evidence," CCSO Working Papers 200006, University of Groningen, CCSO Centre for Economic Research.
    7. Bernard, A.B. & Jones, C.I., 1993. "Productivity Across Industries and Countries: Time Series Theory and Evidence," Working papers 93-17, Massachusetts Institute of Technology (MIT), Department of Economics.
    8. de Haan, Jakob & Sturm, Jan-Egbert, 1997. "Political and economic determinants of OECD budget deficits and government expenditures: A reinvestigation," European Journal of Political Economy, Elsevier, vol. 13(4), pages 739-750, December.
    9. Campbell, John Y. & Mankiw, N. Gregory, 1989. "International evidence on the persistence of economic fluctuations," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 319-333, March.
    10. repec:dgr:rugccs:200006 is not listed on IDEAS
    11. Hettich,Walter & Winer,Stanley L., 1999. "Democratic Choice and Taxation," Cambridge Books, Cambridge University Press, number 9780521622912, November.
    12. Goff, Brian, 1998. "Persistence in Government Spending Fluctuations: New Evidence on the Displacement Effect," Public Choice, Springer, vol. 97(1-2), pages 141-57, October.
    13. Marcello D'Amato & Barbara Pistoresi, 1997. "Co-movements of OECD growth cycles," Applied Economics, Taylor & Francis Journals, vol. 29(2), pages 135-144.
    14. Rosa Capolupo, 1998. "Convergence in recent growth theories: a survey," Journal of Economic Studies, Emerald Group Publishing, vol. 25(6), pages 496-537, October.
    15. de Haan, Jakob & Sturm, Jan-Egbert, 1994. "Political and Institutional Determinants of Fiscal Policy in the European Community," Public Choice, Springer, vol. 80(1-2), pages 157-72, July.
    16. Yianos Kontopoulos & Roberto Perotti, 1999. "Government Fragmentation and Fiscal Policy Outcomes: Evidence from OECD Countries," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 81-102 National Bureau of Economic Research, Inc.
    17. Carlino, Gerald & Mills, Leonard, 1996. "Are U.S. regional incomes converging? Reply," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 599-601, December.
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    Cited by:

    1. Ruiz, Fernando & Gerard, Marcel, 2008. "Is there evidence of strategic corporate tax interaction among EU countries?," MPRA Paper 10094, University Library of Munich, Germany.
    2. Huber, Gerald & Kocher, Martin & Sutter, Matthias, 2003. "Government Strength, Power Dispersion in Governments and Budget Deficits in OECD-Countries: A Voting Power Approach," Public Choice, Springer, vol. 116(3-4), pages 333-50, September.
    3. Åsa Hansson & Susan Porter & Susan Williams, 2015. "The importance of the political process on corporate tax policy," Constitutional Political Economy, Springer, vol. 26(3), pages 281-306, September.
    4. Hans Pitlik, 2005. "Folgt die Steuerpolitik in der EU der Logik des Steuerwettbewerbs," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 256/2005, Department of Economics, University of Hohenheim, Germany.
    5. Osterloh, Steffen & Debus, Marc, 2012. "Partisan politics in corporate taxation," European Journal of Political Economy, Elsevier, vol. 28(2), pages 192-207.
    6. Peter Schwarz, 2007. "Does capital mobility reduce the corporate-labor tax ratio?," Public Choice, Springer, vol. 130(3), pages 363-380, March.
    7. Miroslav Beblavý, 2011. "Why has the crisis been bad for private pensions, but good for the flat tax? The sustainability of ‘neoliberal’ reforms in the new EU member states," CEPS Papers 6313, Centre for European Policy Studies.
    8. Bharatee Dash & Angara Raja, 2014. "Do political determinants affect revenue collection? Evidence from the Indian states," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(3), pages 253-278, September.
    9. Osterloh, Steffen & Debus, Marc, 2009. "Partisan politics in corporate tax competition," ZEW Discussion Papers 09-078, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Roberto Ricciuti, 2004. "Political Fragmentation and Fiscal Outcomes," Public Choice, Springer, vol. 118(3_4), pages 365-388, 03.
    11. Hansson, Åsa & Porter, Susan & Perry Williams, Susan, 2012. "The Effect of Political and Economic Factors on Corporate Tax Rates," Working Paper Series 942, Research Institute of Industrial Economics.

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