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Decentralization, Competition and the local tax mix: evidence from Flanders

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  • Benny Geys

    () (Wissenschaftszentrum Berlin für Sozialforschung (WZB))

  • Federico Revelli

    () (University of Torino)

Abstract

This paper investigates the economic and political determinants of the local tax mix using panel data of 289 Flemish municipalities over the period 1995-2002 and estimating a system of five reduced-form tax revenue-share equations (income, property, business, user fees and other own revenues). The analysis highlights a number of important economic determinants of the observed tax mix while political variables turn out to play a relatively minor role. Finally, the analysis uncovers virtually no evidence of inter-municipal dependence in the determination of the local tax mix.

Suggested Citation

  • Benny Geys & Federico Revelli, 2009. "Decentralization, Competition and the local tax mix: evidence from Flanders," Working Papers 2009/17, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2009/10/doc2009-17
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    References listed on IDEAS

    as
    1. Kristien Werck & Bruno Heyndels & Benny Geys, 2008. "The impact of ‘central places’ on spatial spending patterns: evidence from Flemish local government cultural expenditures," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 32(1), pages 35-58, March.
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    9. Ashworth, John & Geys, Benny & Heyndels, Bruno, 2006. "Determinants of tax innovation: The case of environmental taxes in Flemish municipalities," European Journal of Political Economy, Elsevier, vol. 22(1), pages 223-247, March.
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    Cited by:

    1. Jorge Martinez-Vazquez & Violeta Vulovic & Yongzheng Liu, 2011. "Direct versus Indirect Taxation: Trends, Theory, and Economic Significance," Chapters,in: The Elgar Guide to Tax Systems, chapter 2 Edward Elgar Publishing.
    2. Jorge Martinez-Vazquez & Violeta Vulovic & Yongzheng Liu, 2011. "Direct versus Indirect Taxation: Trends, Theory, and Economic Significance," Chapters,in: The Elgar Guide to Tax Systems, chapter 2 Edward Elgar Publishing.
    3. Asatryan, Zareh & Baskaran, Thushyanthan & Heinemann, Friedrich, 2014. "The effect of direct democracy on the level and structure of local taxes," ZEW Discussion Papers 14-003, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Witte, Kristof De & Geys, Benny, 2011. "Evaluating efficient public good provision: Theory and evidence from a generalised conditional efficiency model for public libraries," Journal of Urban Economics, Elsevier, vol. 69(3), pages 319-327, May.
    5. José da Silva Costa & Armindo Cravalho, 2013. "Yardstick Competition among Portuguese Municipalities: The Case of Urban Property Tax (IMI)," FEP Working Papers 495, Universidade do Porto, Faculdade de Economia do Porto.

    More about this item

    Keywords

    Tax mix; Local government; Flemish municipalities; Decentralisation;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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