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To assemble to resemble? A study of tax disparities among French municipalities

Author

Listed:
  • Marie-Laure Breuillé

    () (INRA)

  • Pascale Duran-Vigneron

    () (University of Exeter)

  • Anne-Laure Samson

    () (Université Paris Dauphine)

Abstract

The purpose of this paper is to analyze the effect of inter-municipal cooperation on local taxation. Municipalities that join/create an inter-municipal jurisdiction choose between three tax regimes, which may induce both horizontal and vertical tax externalities. Using the differences in differences method with a quasi-exhaustive panel for French municipalities over the 1994-2010 period, we show a positive causal effect of cooperation on the level of cumulative tax rates (i.e. the sum of municipal and inter-municipal tax rates). Moreover, we show that cooperation leads to a convergence of tax rates within an inter-municipal structure, which thus reduces tax disparities among municipalities.

Suggested Citation

  • Marie-Laure Breuillé & Pascale Duran-Vigneron & Anne-Laure Samson, 2011. "To assemble to resemble? A study of tax disparities among French municipalities," Working Papers 2011/13, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2011/7/doc2011-13
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    Cited by:

    1. Blesse, Sebastian & Martin, Thorsten, 2015. "Let's stay in touch - evidence on the role of social learning in local tax interactions," ZEW Discussion Papers 15-081, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    Inter-municipal cooperation; tax competition; fiscal disparities;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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