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Title:Zur politischen ├ľkonomie von Defiziten und Kapitalsteuerwettbewerb PDF Logo
Authors:Pitsoulis, Athanassios
Siebel, Jens Peter
Issue Date:2009
Series/Report no.:Ordnungspolitische Diskurse 2009-13
Abstract:We connect the theories of strategic debt and tax competition in a model and explore whether capital mobility coupled with a strategic debt effectively tames Leviathan. Our proposition is that in the case of a small open economy international tax competi-tion for mobile capital opens the way to a previously unexplored sort of strategic deficit. The incumbent conservative government builds a reelection strategy on the downwards pressure on mobile factor tax rates caused by tax competition the liberal successor will be exposed to. As a result it can raise its chances to be reelected by tying the successor's hands on expenditure issues.
Subjects:Structure and Scope of Government
State and Local Budget and Expenditures
Interjurisdictional Differentials and Their Effects
Document Type:Working Paper
Appears in Collections:Ordnungspolitische Diskurse, OPO

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