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Fiscal competition in a transition economy

  • Laura Solanko

    (Bank of Finland)

The paper analyses fiscal competition for mobile capital between identical regions in a transition country. A framework similar to Keen- Marchand (1997) is used to analyse welfare effects of regional competition. It is shown that in very early transition when the share of the old sector is overwhelming, consumers in a transition economy may be better off in a competitive equilibrium. The decision-makers, however, would prefere to coordinate their fiscal policies.

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File URL: http://econwpa.repec.org/eps/pe/papers/0209/0209002.pdf
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Paper provided by EconWPA in its series Public Economics with number 0209002.

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Length: 48 pages
Date of creation: 19 Sep 2002
Date of revision:
Handle: RePEc:wpa:wuwppe:0209002
Note: Type of Document - SWP; prepared on PC; pages: 48
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Mutsumi Matsumoto, 2000. "A Note on the Composition of Public Expenditure under Capital Tax Competition," International Tax and Public Finance, Springer, vol. 7(6), pages 691-697, December.
  2. Jeremy Edwards & Michael Keen, 1994. "Tax competition and Leviathon," IFS Working Papers W94/07, Institute for Fiscal Studies.
  3. Timothy Frye & Andrei Shleifer, 1996. "The Invisible Hand and the Grabbing Hand," NBER Working Papers 5856, National Bureau of Economic Research, Inc.
  4. Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
  5. Irena Grosfeld & Claudia Senik-Leygonie & Thierry Verdier & Stanislav Kolenikov & Elena Paltseva, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," William Davidson Institute Working Papers Series 246, William Davidson Institute at the University of Michigan.
  6. David E. Wildasin, 2000. "Fiscal Competition in Space and Time," CESifo Working Paper Series 370, CESifo Group Munich.
  7. Friebel, Guido & Guriev, Sergei, 2000. "Why Russian Workers Do Not Move: Attachment Of Workers Through In-Kind Payments," CEPR Discussion Papers 2368, C.E.P.R. Discussion Papers.
  8. Jack High (ed.), 2001. "Competition," Books, Edward Elgar Publishing, number 1751, April.
  9. Laura Solanko, 2002. "Fiscal competition in a transition economy," Public Economics 0209002, EconWPA.
  10. Keen, M. & Marchand, M., . "Fiscal competition and the pattern of public spending," CORE Discussion Papers RP 1284, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. J. David Brown & John S. Earle, 2000. "Competition and Firm Performance: Lessons from Russia," William Davidson Institute Working Papers Series 296, William Davidson Institute at the University of Michigan.
  12. Desai, Raj M. & Goldberg, Itzhak, 2000. "The vicious circles of control - regional governments and insiders in privatized Russian enterprises," Policy Research Working Paper Series 2287, The World Bank.
  13. Castanheira, Micael & Roland, Gerard, 2000. "The Optimal Speed of Transition: A General Equilibrium Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 219-39, February.
  14. Maxim Boycko & Andrei Shleifer & Robert W. Vishny, 1993. "Privatizing Russia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 139-192.
  15. Andrei Shleifer, 1996. "Government in Transition," Harvard Institute of Economic Research Working Papers 1783, Harvard - Institute of Economic Research.
  16. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-62, December.
  17. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland, Institute for Economies in Transition.
  18. George C. Tsibouris & Vito Tanzi, 2000. "Fiscal Reform Over Ten Years of Transition," IMF Working Papers 00/113, International Monetary Fund.
  19. Clarida, Richard & Findlay, Ronald, 1994. "After Maastricht: Public Investment, Economic Integration and International Capital Mobility," Economica, London School of Economics and Political Science, vol. 61(243), pages 319-29, August.
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