Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/39033 
Year of Publication: 
2010
Series/Report no.: 
CESifo Working Paper No. 3127
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper addresses the problem of partial tax coordination among regional or national sovereign governments in a repeated game setting. We show that partial tax coordination is more likely to prevail if the number of regions in a coalition subgroup is smaller and the number of existing regions in the entire economy is larger. We also show that under linear utility, partial tax coordination is more likely to prevail if the preference for a local public good is stronger. The main driving force for these results is the response of the intensity of tax competition. The increased (decreased) intensity of tax competition makes partial tax coordination more (less) sustainable.
Subjects: 
partial tax coordination
repeated game
tax competition
JEL: 
H71
H77
Document Type: 
Working Paper
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