Abstract
Models of tax competition usually assume a single-period framework. This paper sets up a repeated interactions model of tax competition and establishes conditions under which fiscal policy harmonization can result from repeated interactions between governments. It is shown that fiscal policy harmonization cannot prevail when regional asymmetries are too strong. In such a case, the only way to achieve fiscal policy harmonization is to set up a central fiscal authority.
| Original language | English |
|---|---|
| Pages (from-to) | 19-38 |
| Number of pages | 20 |
| Journal | Journal of Public Economic Theory |
| Volume | 4 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 1 Dec 2002 |
| Externally published | Yes |