Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39750
Authors: 
Becker, Daniel Thomas
Year of Publication: 
2008
Series/Report no.: 
Thünen-Series of Applied Economic Theory 56
Abstract: 
This paper addresses the question whether increased mobility of capital enhances public-sector modernisation. Public-sector modernisation is modelled as the accumulation of knowledge (or another accumulated production factor) that serves as an input in the government's production of a consumption good. The public-sector provides a direct transfer to households. The tax competition model in the background is a dynamic model in which capital flight induced by taxation is a process that takes time. The speed with which firms can relocate capital to other jurisdictions is taken as a measure of the degree of capital mobility. The main result of the paper is a contradiction of the idea that the competitive pressure caused by increased capital mobility enhances public sector modernisation.
Subjects: 
public-sector modernisation
dynamic tax competition
imperfect capital mobility
JEL: 
H11
H77
H54
O40
Document Type: 
Working Paper

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