BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Fiscal competition in a transition economy
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.
Keywords: tax competition; fiscal competition; transition; (follow links to similar papers)
48 pages, May 16, 2001
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