Article history: Received 16 January 2011 Received in revised form 10 October 2011 Accepted 17 October 2011 Available online 25 October 2011 China's fiscal arrangement in the 1980s has preserved local governments' incentive but the 1994 fiscal reform recentralized revenues. Since then, farmers' tax burdens have risen steeply and become a major challenge to the state legitimacy. How to account f...

This paper analyzes a Tiebout / tax-competition model, where heterogeneity of consumer preferences is introduced into a standard tax-competition framework. Following the modern Tiebout tradition, consumer sorting in the model is achieved through the activities of profit-maximizing community developers. Once sorting is achieved, the equilibrium is equivalent to that in a standard tax-competition...

Good public infrastructure management means more than increasing the quantity of infrastructure stocks; it also involves improving the quality of infrastructure. This study seeks to document the quality of infrastructure projects in China’s villages and to measure whether or not quality has suffered as China’s investment effort has risen. Using data from 100 villages in China, we have found, us...

Unlike the federal government, most state governments in the U.S. formally operate under statutory or constitutional constraints which limit their ability to run budget deficits and resort to debt financing. A priori, one would expect to find evidence in favor of an intertemporally balanced budget, or fiscal sustainability, among states, especially those that are characterized by a high degree ...

This article investigates the effect of the intensity of political competition on the tax choices by local governments. More precisely, we study whether local governments determine their tax rates more in a Leviathan way, exploiting a low political competition to vote high tax rates, or in a partisan way, fiscal choices by leftwing governments being significantly in contrast with those by right...

Despite the intensifying debate over the taxation of Internet commerce, the relevant issues have not been given a systematic treatment in the context of the literature on optimal taxation. This article presents such an analysis and investigates separately the taxation of business purchases of intermediate goods, the taxation of consumer purchases of final goods and services, and the various iss...

This paper studies the role of transfers among groups within a country as well as among countries in a two level game of international trade negotiations. We show that in order to realize the intended transfer in the presence of asymmetric information on the states of recipients (and donors), a transfer process uses up additional resources. The difficulty of making transfers renders it less lik...

In this article, I investigate how political information affects voting behavior. Specifically, I test (i) if more informed voters are more likely to vote for their closest politicians; and (ii) if this translates into a bias on the aggregate level. To do so, I use a set of Swedish individual survey data on the preferences for local public services of both politicians and voters, which provides...

This paper investigates the trade-offs between local elites and state agents as tax collectors in low-capacity states. We study a randomized policy experiment assigning neighborhoods of large Congolese city to property collection by chiefs or agents. Chief raised compliance 3.2 percentage points, increasing revenue 44 percent. Chiefs collected more bribes but did not undermine morale trust gove...