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on Public Economics |
| By: | Norman, Eva Benedicte Danielsen (Samfunns- og Næringslivsforskning); Norman, Victor Danielsen (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | In this paper we develop a framework for studying tax competition and local public goods supply in a setting where real and fiscal externalities interact with local democracy. We use the framework (a) to analyse if there is any reason to believe that local autonomy generally will give a tax race to the bottom (there is not), and (b) to look more closely at possible sources of oversupply or undersupply of publicly provided goods in a setting where local democracies compete for people. We identify two potential sources – the relationship between individual mobility and willingness to pay for publicly provided goods, and the mobility distribution of individuals (i.e. the distribution of individuals over residential preferences). The two could reinforce each other in a local democracy if the majority of the residents in a community are relatively mobile (the “American” case), while they would pull in opposite directions if the majority of residents are relatively immobile (the “European” case). |
| Keywords: | Tax competition; local public goods; agglomeration; migration; regional economic policy |
| JEL: | F12 H21 H73 J61 |
| Date: | 2010–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2010_015&r=pbe |
| By: | Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | The paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes versus quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy. |
| Keywords: | Environmental taxation; Public goods |
| JEL: | D60 H41 H87 |
| Date: | 2010–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2010_023&r=pbe |
| By: | Ley, Eduardo |
| Abstract: | Ramsey-type results dictate that an optimal pattern of taxes must tax more heavily those goods which have a more inelastic(compensated)demand. Corlett and Hague (1953) investigated the optimal revenue-neutral movements from an initial uniform tax. They obtained that the goods (relatively) more complementary to the untaxed good (leisure)should see their taxes increased-which in a revenue-neutral seeting implies that the other goods see their taxes disminished. In a three-good economy (with only two goods being subject to taxation) the Ramsey-type rule and the Corlett-Hague result can be easily related. |
| Keywords: | Optimal taxation; Ramsey; Corlett-Hague; demand elasticity; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/2825&r=pbe |
| By: | Lockwood, Ben (University of Warwick); Porcelli, Francesco (University of Warwick) |
| Abstract: | This paper studies Comprehensive Performance Assessment, an explicit incentive scheme for local government in England. Motivated by a simple theoretical political agency model, we predict that CPA should increase service quality and local taxation, but have an ambiguous e¤ect on the e¢ ciency of service provision. We test these predictions using a difference in difference approach, using Welsh local authorities as a control group, exploiting the fact that local authorities in Wales were not subject to the same CPA regime. To do this, we construct original indices of service quality and e¢ ciency, using Best Value Performance Indicators. We estimate that CPA increased the effective band D council tax rate in England relative to Wales by 4%, and increased our index of service quality output also by about 4%, but had no signifcant effect on our efficiency indices. There is evidence of heterogenous effects of CPA on efficiency, with some evidence that CPA impacted more on less efficient councils, and the "harder test" from 2005-8 having a much bigger effect. Key words: local government ; incentives ; efficiency ; difference in difference ; DEA JEL classification: H10 ; H70 ; H77 ; C21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:960&r=pbe |