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A note on tax competition and public input provision

Authors
Journal
Regional Science and Urban Economics
0166-0462
Publisher
Elsevier
Publication Date
Volume
28
Issue
4
Identifiers
DOI: 10.1016/s0166-0462(98)00003-9
Keywords
  • Tax Competition
  • Public Inputs
Disciplines
  • Political Science

Abstract

Abstract This note reconsiders and extends the tax competition analysis of Zodrow and Mieszkowski (Journal of Urban Economics 19, (1986) 356–370) regarding public inputs. In their model with capital mobility, both the underprovision and overprovision of public inputs may result from tax competition. However, this note shows that when firms are also mobile across jurisdictions, local governments competing for capital choose inefficiently low levels of public inputs.

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