This article contributes to the literature on local tax interactions, with an innovative focus on interactions of local governments across national borders. We use a panel data set of the municipalities in France and in Germany along the Rhine Valley to estimate an empirical model of strategic interactions between French and German local jurisdictions over the period 2000-2007. Local governments in either country can influence the overall tax burden of firms. We estimate panel models in which we distinguish between the influence of competing municipalities which belong to the same country and the effect of competing municipalities which belong to different countries, sharing a border. Our estimations show that local jurisdictions along the border choose their business tax rates only by looking at their domestic neighbors. The foreign local fiscal policy does not have an impact on the domestic tax setting behavior.

No abstract

No abstract

This paper investigates how economic activity impacted Covid-19 infections and all-cause mortality. To this purpose, we exploit the distribution of essential sectors, which were exempted from a national lockdown enacted in Italy during the first wave of the pandemic, across provinces and rich administrative data in a difference-in-differences framework. We find that a standard deviation increase in essential workers per built square kilometre leads to 1.1 additional daily cases and 0.32 additional daily deaths per 100,000 inhabitants. Back of the envelope calculations suggest that about one third (47,000) of the Covid-19 cases and about 13% (13,000) of deaths between March and May of 2020 can be attributed to the less stringent lockdown for these sectors. The effect is heterogeneous across sectors. Finally, we find that the local health system played a relevant role in reducing fatalities with a higher number of general practitioners and hospital beds per capita being associated with a lower mortality.