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Taxation, social protection, and governance decentralization

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  • Gil S. Epstein
  • Ira N. Gang

Abstract

Governments do not have perfect information regarding constituent priorities and needs. This lack of knowledge opens the door for groups to lobby in order to affect the government's taxation levels. We examine the political economy of decentralized revenue-raising authority in light of social protection expenditures by constructing a theoretical model of hierarchical contests and comparing the implications of centralized with decentralized governance.

Suggested Citation

  • Gil S. Epstein & Ira N. Gang, 2016. "Taxation, social protection, and governance decentralization," WIDER Working Paper Series wp-2016-101, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2016-101
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2016-101.pdf
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    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Institutional economics; Intergovernmental fiscal relations; State governments; Taxation;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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