Suchergebnisse

This paper investigates whether OECD countries compete with each other for mobile factors by using various fiscal (tax-spending) policy instruments. We use a panel dataset of 20 OECD countries over the 1982-2000 period. Results reveal evidence that international capital inflows (FDI) are affected by fiscal policy at home and abroad. Also, there is evidence that domestic capital tax rates react: (i) positively to changes in capital tax rates in neighboring countries, and (ii) negatively to changes in public investment spending in neighboring countries. In contrast, strategic interdependence over public investment spending decisions is not established. Adapted from the source document.

We explain the public's support for the minimum wage (MW) institution despite economists' warnings that the MW is a "blunt instrument" for redistribution. To do so we build a model in which workers are heterogeneous in ability, and the government engages in redistribution through the public provision of private goods. We show that the MW institution is politically viable only when there is a limited degree of in-kind redistribution. To examine the empirical relevance of our hypothesis we investigate the relationship between the probability of adopting MW legislation and the size of primary government spending by employing a dataset of 38 -developing and developed- countries from 1960 to 2017. Probit model estimations yield support for our theoretical prediction that a decrease in government spending increases the likelihood of a country enacting MW legislation. This negative association remains highly robust under alternative empirical specifications and estimation techniques.

Using a set of innovative instruments qualified by the literature, we investigate the effect of individualist culture on fiscal redistribution. Our analysis suggests that societies characterized by less collectivistic culture present higher levels of fiscal redistribution, as proxied by government subsidies and transfers as well as health and education expenses.