Leviathan and Competition among Jurisdictions: The Case of Benefit Taxation

Michael Rauscher

No 13, Thuenen-Series of Applied Economic Theory from University of Rostock, Institute of Economics

Abstract: The paper shows that interjurisdictional competition for mobile factors of production forces the government to raise the efficiency of the public sector and, thus, helps to tame Leviathan governments. However, this result is derived under some restrictive assumptions concerning the kind of tax policy used by the government. In the case of benefit taxes, e.g. user charges, a Leviathan may be tamed by interjurisdictional competition whereas this is not necessarily true in the case of lum-sum taxes.

JEL-codes: F20 H21 H40 H73 (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:roswps:13

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