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Leviathan and Competition among Jurisdictions: The Case of Benefit Taxation

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  • Rauscher, Michael

Abstract

The paper shows that interjurisdictional competition for mobile factors of production forces the government to raise the efficiency of the public sector and, thus, helps to tame Leviathan governments. However, this result is derived under some restrictive assumptions concerning the kind of tax policy used by the government. In the case of benefit taxes, e.g. user charges, a Leviathan may be tamed by interjurisdictional competition whereas this is not necessarily true in the case of lum-sum taxes.

Suggested Citation

  • Rauscher, Michael, 1997. "Leviathan and Competition among Jurisdictions: The Case of Benefit Taxation," Thuenen-Series of Applied Economic Theory 13, University of Rostock, Institute of Economics.
    • Handle: RePEc:zbw:roswps:13
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    References listed on IDEAS

    as
    1. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
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    More about this item

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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