Non-discriminatory donation relief and strategic commitment under political competition

Monica Anna Giovanniello, Carlo Perroni, Kimberley Scharf and Al Slivinski

European Journal of Political Economy, 2019, vol. 58, issue C, 164-177

Abstract: Tax relief for private donations towards the provision of collective goods can protect minorities from majority-driven outcomes in which tax revenues are exclusively used to finance the provision of public goods that are only valued by the majority. In this paper we show that non-discriminatory tax relief for private donations can arise in political equilibrium as a strategic commitment device aimed at creating and supporting political alliances that would not otherwise be able to coalesce.

Keywords: Tax relief; Private donations; Strategic policy commitment (search for similar items in EconPapers)
JEL-codes: D7 H2 H4 L3 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:58:y:2019:i:c:p:164-177

DOI: 10.1016/j.ejpoleco.2018.10.002

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