Endogenizing government’s objectives in tax competition with capital ownership

Keisuke Kawachi (), Hikaru Ogawa and Taiki Susa ()
Additional contact information
Keisuke Kawachi: Mie University
Taiki Susa: Chubu University

International Tax and Public Finance, 2019, vol. 26, issue 3, No 5, 594 pages

Abstract: Abstract In this study, we extend the standard approach of horizontal tax competition by endogenizing the policy objectives that governments pursue. Following the literature on strategic delegation games, we consider a pre-play stage, where jurisdictions commit themselves to act as Leviathan or as benevolent agents. We show that the symmetric sub-game perfect equilibria correspond to three cases of tax competition among the Leviathan governments, moderate Leviathans, and benevolent governments, depending on the form of capital ownership. Further analysis reveals that asymmetric tax competition generates competition between the benevolent government and the (moderate) Leviathan government. The results provide grounds for benevolent or Leviathan objectives and explain why some governments act as one, while others aim toward a different objective.

Keywords: Tax competition; Endogenous policy objective; Leviathan; Benevolent government (search for similar items in EconPapers)
JEL-codes: F21 H11 H73 H77 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s10797-018-9516-1 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Endogenizing Government's Objectives in Tax Competition with Capital Ownership (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:26:y:2019:i:3:d:10.1007_s10797-018-9516-1

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

DOI: 10.1007/s10797-018-9516-1

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().