Jeux Sans Frontieres: Tax Competition and Tax Coordination when Countries Differ in Size

Ravi Kanbur and Michael Keen

No 819, Working Paper from Economics Department, Queen's University

Abstract: Closer international integration is putting increasing pressure on existing national tax structures. this paper uses a simple two-country model to address a range of policy concerns that consequently arise, focusing particularly on the role of national size. Differences in size exacerbate the inefficiency due to non-cooperative behavior, harming both countries. The smaller country would lose form harmonization to any tax rate between those of the non-cooperative equilibrium, but both countries would gain from the imposition of a minimum tax anywhere in that range. The fully optimal response to freer cross-border trade, however, may be to do absolutely nothing.

Pages: 40 pages
Date: 1991-05
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Citations: View citations in EconPapers (9)

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http://qed.econ.queensu.ca/working_papers/papers/qed_wp_819.pdf First version 1991 (application/pdf)

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Journal Article: Jeux Sans Frontieres: Tax Competition and Tax Coordination When Countries Differ in Size (1993)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:819

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