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Structural fund, endogenous move and commitment

Author

Listed:
  • Carsten Eckel

    (University of Munich, CESifo and CEPR)

  • Yutao Han

    (University of International Business and Economics)

  • Kate Hynes

    (Dublin City University)

  • Jin Zhang

    (University of International Business and Economics)

Abstract

In this paper, we extend the study on combined tax and infrastructure competition by endogenizing the timing of decisions made by asymmetric countries. We consider how a structural fund affects the endogenous move decision and show that the poor country prefers to be a follower only when the production function is sufficiently concave. We also analyse the effect of the structural fund on total welfare and design a commitment game to ensure that the socially optimal outcome is achieved.

Suggested Citation

  • Carsten Eckel & Yutao Han & Kate Hynes & Jin Zhang, 2021. "Structural fund, endogenous move and commitment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(2), pages 465-482, April.
    • Handle: RePEc:kap:itaxpf:v:28:y:2021:i:2:d:10.1007_s10797-020-09641-2
    DOI: 10.1007/s10797-020-09641-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Structural fund; Endogenous move; Commitment; Social welfare;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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