Fiscal competition in a transition economy

Laura Solanko
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Laura Solanko: Bank of Finland

Public Economics from EconWPA

Abstract: The paper analyses fiscal competition for mobile capital between identical regions in a transition country. A framework similar to Keen- Marchand (1997) is used to analyse welfare effects of regional competition. It is shown that in very early transition when the share of the old sector is overwhelming, consumers in a transition economy may be better off in a competitive equilibrium. The decision-makers, however, would prefere to coordinate their fiscal policies.

Keywords: tax competition; fiscal competition; transition (search for similar items in EconPapers)
JEL-codes: D6 D7 H (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2002-09-19
Note: Type of Document - SWP; prepared on PC; pages: 48
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0209002

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