Inter-governmental competition: market solutions to political problems
Jean Hindriks ()
No 2004087, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
In normative public economics, inter-governmental competition is usually viewed as harmful. Although empirical support for this position does not abound, market integration has intensified competition among developed countries. In this paper we argue that when assessing welfare effects of inter-governmental competition for various forms of government imperfections (the public choice critique), the outcome is ambiguous and competition can be welfare improving.
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