Public expenditure spillovers: an explanation for heterogeneous tax reaction functions

Tax Competition and Revelation of Preferences for Public Expenditure

One of the important problems facing jurisdictions in an open economy is tax competition. This problem arises when the tax base is mobile among jurisdictions, in particular when they use source-based taxes on capital income to finance their public expenditure. Stigler ( 1957 ) was among the first to recognize the nature of this problem. If the tax base is mobile among jurisdictions, each jurisd...

Tax Havens and FDI Spillovers: Implications for LDCs

Tax competition and spillover models offer ambiguous predictions concerning the economic impact of tax havens on non-tax havens. The implications of tax havens for less developed countries (LDCs), in particular, are not well understood and are little studied. This paper investigates the impact of tax havens on non-tax haven countries in terms of foreign direct investment (FDI). We investigate t...

“Central-local Relations Revisited: the 1994 Tax Sharing Reform and Public Expenditure Management in China”

As China moves forward in its transition toward a market economy, the budget becomes increasingly important as a policy instrument. Along with monetary policy, it is the Government’s main tool for maintaining macroeconomic stability and allocating resources to achieve policy objectives, taking over the role that used to be preformed by the Plan. As the Plan is stripped of its resource support a...

A Reconsideration of Tax Expenditure Analysis

Cross-border investment expenditure spillovers in European gas infrastructure

We investigate the implications of an integrated vis-à-vis a national perspective regarding investment in natural gas infrastructure. In particular, we analyze cross-border spillovers related to the investment expenditure of five Western European countries. We develop a practical approach to estimate such cross-border investment expenditure spillovers using a multi-regional input-output model. ...