Public Choice of Tax and Regulatory Instruments—The Role of Heterogeneity

Dong (Dan) Lee and Thomas E. Borcherding
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Dong (Dan) Lee: California State University, Fullerton
Thomas E. Borcherding: Claremont Graduate University, California

Public Finance Review, 2006, vol. 34, issue 6, 607-636

Abstract: In the authors' political equilibrium model, regulation is considered an implicit and regressive tax-equivalent alternative to the common and less regressive fiscal alternatives: income, property, and sales taxes. The authors hypothesize that in more heterogeneous jurisdictions the state relies more on regulation and less on budgetary spending than in more homogeneous units. Using data drawn from U.S. state-level environmental policy from 1980 to 1994, the authors confirm this hypothesis.

Keywords: size of government; taxation; public spending; fiscal and regulatory choice; environmental regulation (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:34:y:2006:i:6:p:607-636

DOI: 10.1177/1091142106291501

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