Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

Abstract: In this paper we develop a framework for studying tax competition and local public goods supply in a setting where real and fiscal externalities interact with local democracy. We use the framework (a) to analyse if there is any reason to believe that local autonomy generally will give a tax race to the bottom (there is not), and (b) to look more closely at possible sources of oversupply or undersupply of publicly provided goods in a setting where local democracies compete for people. We identify two potential sources – the relationship between individual mobility and willingness to pay for publicly provided goods, and the mobility distribution of individuals (i.e. the distribution of individuals over residential preferences). The two could reinforce each other in a local democracy if the majority of the residents in a community are relatively mobile (the “American” case), while they would pull in opposite directions if the majority of residents are relatively immobile (the “European” case).

Keywords: Tax competition; local public goods; agglomeration; migration; regional economic policy

JEL-codes: F12; H21; H73; J61

22 pages, August 17, 2010

Full text files

DWSDownload.aspx?Fil...pers%2f2010%2f15.pdf  

Download statistics

• Norwegian School of Economics, Department of Economics
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Karen Reed-Larsen ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:nhheco:2010_015This page generated on 2024-09-13 22:16:16.