The political trend in local government tax setting

Santolini, Raffaella

doi:10.1007/s11127-008-9383-x

Cited by 13 publications

(8 citation statements)

References 23 publications

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“…More recently, Santolini (, ) introduced the idea of “social interactions” to explain tax mimicking. Politicians belonging to the same party interact with each other—socially rather than strategically—to draw inferences about party preferences.…”

Section: Introductionmentioning

confidence: 99%

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

Delgado

Peñas

Mayor

2014

Contemporary Economic Policy

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This paper studies the determinants of local tax rates. For the two main local taxes in Spain -the property tax and the motor vehicle tax -we test the existence of tax mimicking, yardstick competition and political trends in a sample of 2,713 municipalities. Using different spatial models, the results support the hypothesis of tax mimicking, with coefficients over 0.40. We also show the relevance of political variables such as the ideology of the incumbents and political fragmentation. The fact that incumbents with weaker political support display stronger mimicking behaviour is interpreted as evidence in favour of yardstick competition. Finally, we find incumbents mimic neighbouring municipalities ruled by the same political party, confirming the political trends hypothesis.JEL Codes: C31, H71, H77

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Section: Introductionmentioning

confidence: 99%

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

Delgado

Peñas

Mayor

2014

Contemporary Economic Policy

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“…Secondly, the interaction may be the consequence of tax competition, where jurisdictions react to policies because they fear to lose tax base (Devereux et al, 2007;Ruiz and Gerard, 2008). Thirdly, fiscal interaction can be driven by a common political trend, where politicians sharing the same ideology would tend to mimic each other, without any electoral goal (Foucault et al, 2008;Santolini, 2008Santolini, , 2009). Finally, the interaction can be the result of political opportunism.…”

Section: Introductionmentioning

confidence: 99%

Political yardstick competition among Italian municipalities on spending decisions

Bartolini

Santolini

2011

Ann Reg Sci

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We investigate the presence of political yardstick competition on current spending decisions in a sample of Italian municipalities. We find significant evidence of yardstick competition when we explicitly account for the domestic stability pact (DSP), a fiscal rule introduced to limit the budget deficit of local administrations. Firstly, we estimate a static specification of a spatial panel model, and then we check for the robustness of our results with a dynamic specification. The static analysis shows that municipalities engage in yardstick competition during pre-election years, whether their are subject to the DSP or not. The dynamic analysis shows that the yardstick hypothesis remains robust only for municipalities not constrained by the DSP.

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“…Moreover, they allow for interregional differences in spatial patterns using the fact that Belgian regions (Wallonia, Flanders and Brussels) differ on political, economic, linguistic and cultural dimensions, and find that the intensity of spatial interaction processes is higher within than between regions. Santolini (2008Santolini ( , 2009 Finally, other aspects of decentralized revenue raising efforts have been recently analyzed to uncover spatial patterns of competition. Allers and Hoeben (2010) and Rork (2009) test for competition in the setting of unit-based garbage pricing and toll revenues respectively.…”

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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The political trend in local government tax setting

Abstract: Political trend, Social interaction, Tax mimicking, D72, H71, H77,

Cited by 13 publications

References 23 publications

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

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

Political yardstick competition among Italian municipalities on spending decisions

Geografiscal federalism

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