Work

Tax Competition and the Determination of the Quality of Public Goods

Year: 2014

Type: article

Abstract: In this paper, the author analyzes the behavior of local governments in capital taxation when the financial choices in terms of the quality of public goods are made done by a central planner. More specifically, he asks the question of whether a local government has an interest in taxing the mobile factor in addition to the tax on representative households. Through a comparison of social welfare given the strategies chosen by local governments, the author shows that whatever the quality and cost of public goods, a local government always has an interest in taxing the mobile factor. This leads to a Nash equilibrium in the dominant strategy in their model.

Source: Economics

DOI: 10.5018/economics-ejournal.ja.2014-12

Authors: A.H. Ould Abdessalam, Eric Kamwa

Institutions: Centre National de la Recherche Scientifique, Audencia Business School, Centre de Recherche en Économie et Management, Université de Caen Normandie

Language: English

Topic: Local Government Finance and Decentralization

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: gold

Estimated APC paid: $1,187