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Public Health Federalism?

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  • Mitch Kunce

Abstract

This paper develops a general equilibrium model of competitive jurisdictional choice that provides insights into what is being coined 'public health federalism'. Using a standard neoclassical model of production combined with a utility maximization hypothesis, jurisdictions choose both tax rates and a level of local public health quality. Incorporating the joint determination of both tax decisions and the choice of public health standards can give rise to some interesting interrelationships between local tax revenues and public health considerations. Additionally, the model is extended to address the fiscal realities of sub-state jurisdictions in the United States. Beleaguered in a second-best setting, devolved efficiency becomes a target difficult to hit. We show that when jurisdictions rely on taxing mobile factors and mobile factor productivity is enhanced by relaxing public health mitigation, jurisdictions will choose lower levels of public health quality. JEL classification numbers: H73, I18, R13.

Suggested Citation

  • Mitch Kunce, 2021. "Public Health Federalism?," Journal of Risk & Control, SCIENPRESS Ltd, vol. 8(1), pages 1-2.
    • Handle: RePEc:spt:rmkjrc:v:8:y:2021:i:1:f:8_1_2
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    References listed on IDEAS

    as
    1. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    2. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    3. Kunce, Mitch & Shogren, Jason F., 2008. "Efficient decentralized fiscal and environmental policy: A dual purpose Henry George tax," Ecological Economics, Elsevier, vol. 65(3), pages 569-573, April.
    4. Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
    5. List, John A. & Mason, Charles F., 2001. "Optimal Institutional Arrangements for Transboundary Pollutants in a Second-Best World: Evidence from a Differential Game with Asymmetric Players," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 277-296, November.
    6. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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