Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76370
Authors: 
Wilson, John
Janeba, Eckhard
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper 854
Abstract: 
This paper models tax competition between two countries that are divided into regions. In the first stage of the game, the strategy variable for each country is the division of the provision of a continuum of public goods between the central and regional governments. In the second stage, the central and regional governments choose their tax rates on capital. A country's decentralization level serves as a strategic tool through its influence on the mix of horizontal and vertical externalities that exist under tax competition. In contrast to standard tax competition models, decentralizing the provision of public goods may be welfare-enhancing.
Document Type: 
Working Paper

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