On the Determinants of Local Tax Rates: New Evidence from Spain

Delgado, Francisco; Peñas, Santiago Lago; Mayor, Matías

doi:10.2139/ssrn.1762802

Cited by 81 publications

(7 citation statements)

References 53 publications

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“…Thus, one tests directly the seminal hypothesis that is underlying yardstick competition. Despite this advantage, the research literature which uses this approach is scarce as the literature review on yardstick competition of Delgado et al (2011) shows.…”

Section: Introductionmentioning

confidence: 99%

Testing yardstick competition through a vote-function: evidence from the Walloon municipalities

Malderen

Gérard

2013

Econom. bus. letters

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This paper aims at testing yardstick competition among the local jurisdictions of the Walloon Region (Southern part of Belgium) by directly testing its seminal hypothesis: yardstick voting. Actually the theory states that local incumbents are mimicking each other because they fear punishment for implementing higher tax rates than in neighbouring jurisdictions. Our research question is whether voters punish their incumbents for higher tax rates. We estimate different specifications of a vote function. None of them supports the yardstick voting hypothesis. One can thus exclude yardstick voting being statistically supported by taxpayers' behaviour. And we can exclude yardstick competition as a source of tax interactions in the region if yardstick voting is a testable hypothesis of yardstick competition. Indeed, if tax rates of the neighbouring jurisdictions do not influence voters' choices, incumbents do not have to fear an electoral punishment and then mimicking each other is meaningless.

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Section: Introductionmentioning

confidence: 99%

Testing yardstick competition through a vote-function: evidence from the Walloon municipalities

Malderen

Gérard

2013

Econom. bus. letters

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“…This issue is likely to limit our ability to capture the real spatial processes underlying fiscal interactions at the municipal level. While the use of only this spatial weight matrix constitutes a limitation of the study, as shown in the litera ture it is not expected to obtain very different results when using other approaches (see Mayor, 2010 and2015, for a survey of studies).…”

Section: Weights Matrixmentioning

confidence: 99%

Strategic fiscal interactions among local Governments in Colombia

Muñoz¹

2016

HPE-RPE

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Using spatial panel data from most municipalities in Colombia for the period 2000-09, this paper provides empirical evidence of the existence of strategic fiscal interactions in property and business taxa tion. However, there is little evidence of cut-throat tax competition that leads to a «race to the bottom.» Also, this paper shows that differences in property tax rates affect local election results and the popular ity of the main political parties in the local councils, signaling the presence of yardstick competition in this source. The results suggest that country does not seem to require policy measures aimed at attenu ating municipal tax competition.

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“…Delgado and Mayor (2010) and Delgado et al (2011) test the tax competition hypothesis in Spain. Gerard et al (2010) use a long panel dataset on Belgian municipalities and find evidence of interaction among close neighbors in the setting of the local surcharge on income tax, but not of the local surcharge on property tax.…”

Section: Tax Competitionmentioning

confidence: 99%

Geografiscal federalism

Revelli¹

2015

Handbook of Multilevel Finance

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Spatial econometrics methods have been extensively applied to the analysis of decentralized fiscal policy-making in the past two decades, with most research focussing on the investigation of spatial patterns arising from various forms of competition among local authorities. This chapter first reviews the several contributions in the spatial analysis of local government data that have appeared since the publication of the first edition of the Handbook of Fiscal Federalism (2006) -over seventy fresh empirical works -with the aim of evaluating the advancements that have been made since then in the knowledge and understanding of interjurisdictional competition phenomena. The second part of the chapter discusses the impact on the empirical analysis of intergovernmental fiscal interaction of a number of recent econometric developments concerning the specification, estimation and interpretation of spatial models, and concludes with some remarks on the foreseeable developments in geografiscal federalism research.

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On the Determinants of Local Tax Rates: New Evidence from Spain

Cited by 81 publications

References 53 publications

Testing yardstick competition through a vote-function: evidence from the Walloon municipalities

Testing yardstick competition through a vote-function: evidence from the Walloon municipalities

Strategic fiscal interactions among local Governments in Colombia

Geografiscal federalism

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