Inter-Jurisdictional fiscal competition : a review of the literature and policy recommendations
By: Ferreira, Sergio Guimarães
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Contributor(s): VARSANO, Ricardo | AFONSO, José Roberto.
Material type: 
ArticlePublisher: São Paulo : Editora 34, jul./set. 2005Online resources: Acesso Revista de Economia Política = Brazilian Journal of Political Economy 25, 3, p. 295-313Abstract: This paper surveys the literature on fiscal competition. We consider tax and expenditure competition in a more general set up where different jurisdictions within a federation may compete in the provision of public goods in order to attract some residents (Tiebout, 1956) and expel others (Brueckner, 1999); and/or for business. We address the vast literature on welfare gains or losses of these types of competition. Then, we discuss the empirical evidence, focusing on estimates of the sensitiveness of production factors to tax differentials and on the importance of the strategic interdependence among jurisdictions. We combine econometric studies with some case studies. Last we discuss the design of mechanisms to cope with fiscal competition, especially under a more global environment where factors become more mobile
This paper surveys the literature on fiscal competition. We consider tax and expenditure competition in a more general set up where different jurisdictions within a federation may compete in the provision of public goods in order to attract some residents (Tiebout, 1956) and expel others (Brueckner, 1999); and/or for business. We address the vast literature on welfare gains or losses of these types of competition. Then, we discuss the empirical evidence, focusing on estimates of the sensitiveness of production factors to tax differentials and on the importance of the strategic interdependence among jurisdictions. We combine econometric studies with some case studies. Last we discuss the design of mechanisms to cope with fiscal competition, especially under a more global environment where factors become more mobile
Julho Setembro 2005
v. 25 n. 3 (99)
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