Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26114 
Year of Publication: 
2007
Series/Report no.: 
CESifo Working Paper No. 2069
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Politicians are disciplined through the electoral system. But this is often not enough to eliminate political rents. Economists suggest that competition across governments may also help. But intergovernmental competition can take two forms, through tax competition (exit) or yardstick competition (voice). We show these two forms may not, and in general do not, work in the same direction. Tax competition may reduce the screening properties of yardstick competition.
JEL: 
H7
Document Type: 
Working Paper
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