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Fiscal competition in a transition economy

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  • Solanko, Laura

Abstract

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 prefer to coordinate their fiscal policies.

Suggested Citation

  • Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2001_004
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    References listed on IDEAS

    as
    1. Wildasin, David E., 2003. "Fiscal competition in space and time," Journal of Public Economics, Elsevier, vol. 87(11), pages 2571-2588, October.
    2. Guido Friebel & Sergei Guriev, 1999. "Why Russian Workers Do Not Move: Attachment of Workers Through In-Kind Payments," William Davidson Institute Working Papers Series 283, William Davidson Institute at the University of Michigan.
    3. Frye, Timothy & Shleifer, Andrei, 1997. "The Invisible Hand and the Grabbing Hand," American Economic Review, American Economic Association, vol. 87(2), pages 354-358, May.
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    8. Mutsumi Matsumoto, 2000. "A Note on the Composition of Public Expenditure under Capital Tax Competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(6), pages 691-697, December.
    9. Beck, John H., 1983. "Tax competition, uniform assessment, and the benefit principle," Journal of Urban Economics, Elsevier, vol. 13(2), pages 127-146, March.
    10. repec:bla:econom:v:61:y:1994:i:243:p:319-29 is not listed on IDEAS
    11. Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W., 1997. "Privatizing Russia," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522284, December.
    12. Mr. Liam P. Ebrill, 1999. "Tax Reform in the Baltics, Russia, and Other Countries of the Former Soviet Union," IMF Occasional Papers 1999/010, International Monetary Fund.
    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 219-239, February.
    14. Jack High (ed.), 2001. "Competition," Books, Edward Elgar Publishing, number 1751, March.
    15. Grosfeld, Irena & Kolenikov, Stanislav & Paltseva, Elena & Sénik-Leygonie, Claudia & Verdier, Thierry, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," CEPR Discussion Papers 2224, C.E.P.R. Discussion Papers.
    16. Shleifer, Andrei, 1997. "Government in transition," European Economic Review, Elsevier, vol. 41(3-5), pages 385-410, April.
    17. 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.
    18. George R. Zodrow & Peter Mieszkowski, 2019. "Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 17, pages 525-542, World Scientific Publishing Co. Pte. Ltd..
    19. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland, Institute for Economies in Transition.
    20. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland Institute for Emerging Economies (BOFIT).
    21. repec:zbw:bofitp:2001_004 is not listed on IDEAS
    22. Mr. George C. Tsibouris & Mr. Vito Tanzi, 2000. "Fiscal Reform Over Ten Years of Transition," IMF Working Papers 2000/113, International Monetary Fund.
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    Cited by:

    1. Sergii Slukhai, 2009. "Inter-Location Small Business Tax Rate Variation in Ukraine: What Is Behind It?," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 49-71.
    2. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland Institute for Emerging Economies (BOFIT).
    3. Irina N. Ilina & Carol S. Leonard & Evgenij E. Plisetskij, 2014. "Russian Regional Resilience: Finance, Cooperation And Resource Abundance (A Case Study Of Khanty-Mansiysk)," HSE Working papers WP BRP 15/PA/2014, National Research University Higher School of Economics.
    4. Libman, Alexander, 2008. "Federalism and regionalism in transition countries: A survey," MPRA Paper 29196, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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