Open Access

Political competition and leadership in tax competition (2012)

Abstract

In this paper, we introduce political competition in a sequential move tax competition game between two regions for foreign owned mobile capital. It shows that in case of sequential move, political delegation takes place only in the follower region, not in the leader region. Moreover, political competition need not necessarily lead to higher tax rate in equilibrium. These results are in the sharp contrast to the existing results.

Keywords

Leadership, Public good, Tax competition, Mobile capital, Political competition

Languages

English

Repository

Indira Gandhi Institute of Development Research, Mumbai, Kautilya@IGIDR

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