Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/55405 
Year of Publication: 
2009
Series/Report no.: 
Ordnungspolitische Diskurse No. 2009-13
Publisher: 
OrdnungsPolitisches Portal (OPO), s.l.
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

Files in This Item:
File
Size
627.18 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.