An Empitical Analysis of Political and Informative Trends on Municipalities of an Italian Region
The aim of this paper is to conduct an empirical investigation regarding the presence of political and informative trends in tax setting of local governments as an alternative theoretical explanation to the tax mimick-ing. Both phenomena have been tested on municipalities' cross-sectional data of the Marche region with a spatial econometrics model. Discrimi-nating among several sources of tax mimicking, including public spend-ing spill-over, some evidence was found in favour of the political trend. As regards the informative trend, non significant results were observed testing tax interaction among heterogeneous coalitions. However, some evidence is present on local public spending.
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