Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/116972
Tax competition and equalization: the impact of voluntary cooperation on the efficiency goal
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Literature has long learned about the welfare improving effect of equalization in tax competition environments. By setting incentives to local authorities, public spending becomes efficient in spite of relying on a mobile resource as the tax base. This paper proves that this result cannot hold when local players have influence on the shape of the transfer system. A bargaining concerning equalization may change the incentives arising from equalization.
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ENS, Petra. Tax competition and equalization: the impact of voluntary cooperation on the efficiency goal. IEB Working Paper 2009/16. [consulted: 14 of October of 2026]. Available at: https://hdl.handle.net/2445/116972