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Decentralization, Competition and the local tax mix: evidence from Flanders

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  • Benny Geys

    (Wissenschaftszentrum Berlin für Sozialforschung (WZB))

  • Federico Revelli

    (University of Torino)

Abstract

This paper investigates the economic and political determinants of the local tax mix using panel data of 289 Flemish municipalities over the period 1995-2002 and estimating a system of five reduced-form tax revenue-share equations (income, property, business, user fees and other own revenues). The analysis highlights a number of important economic determinants of the observed tax mix while political variables turn out to play a relatively minor role. Finally, the analysis uncovers virtually no evidence of inter-municipal dependence in the determination of the local tax mix.

Suggested Citation

  • Benny Geys & Federico Revelli, 2009. "Decentralization, Competition and the local tax mix: evidence from Flanders," Working Papers 2009/17, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2009-17
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    References listed on IDEAS

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    Cited by:

    1. Jorge Martinez-Vazquez & Violeta Vulovic & Yongzheng Liu, 2011. "Direct versus Indirect Taxation: Trends, Theory, and Economic Significance," Chapters, in: Emilio Albi & Jorge Martinez-Vazquez (ed.), The Elgar Guide to Tax Systems, chapter 2, Edward Elgar Publishing.
    2. Titl, Vitezslav & De Witte, Kristof, 2022. "How politics influence public good provision," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    3. Asatryan, Zareh & Baskaran, Thushyanthan & Heinemann, Friedrich, 2017. "The effect of direct democracy on the level and structure of local taxes," Regional Science and Urban Economics, Elsevier, vol. 65(C), pages 38-55.
    4. Ivo Bischoff & Peter Bönisch & Peter Haug & Annette Illy, 2019. "Vertical Grants and Local Public Efficiency: The Inference-disturbing Effect of Fiscal Equalization," Public Finance Review, , vol. 47(3), pages 558-584, May.
    5. Witte, Kristof De & Geys, Benny, 2011. "Evaluating efficient public good provision: Theory and evidence from a generalised conditional efficiency model for public libraries," Journal of Urban Economics, Elsevier, vol. 69(3), pages 319-327, May.
    6. José da Silva Costa & Armindo Cravalho, 2013. "Yardstick Competition among Portuguese Municipalities: The Case of Urban Property Tax (IMI)," FEP Working Papers 495, Universidade do Porto, Faculdade de Economia do Porto.

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    More about this item

    Keywords

    Tax mix; Local government; Flemish municipalities; Decentralisation;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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