Does Interlocal Competition Drive Cooperation in Local Economic Development Policies? Evidence on Interlocal Business Parks in Germany

An increasing number of municipalities cooperates in the field of economic development. In this article, we focus on a specific instrument in this field, namely the development of joint business parks. We apply a hazard model to data from West German municipalities between 2000 and 2015. We find interlocal business parks to be more frequent among small municipalities and in urban clusters and other constellations where suitable land is scarce. Our main focus rests on the role of intraregional competition. An analogy building on the literature on international tax coordination supports the hypothesis that interlocal business parks are more likely in regions where intraregional competition is intense. We measure the intensity of competition using local tax rates and find the evidence to be affirmative: The likelihood of interlocal business park formation increases in the intensity of intraregional (tax) competition.

Double Tax Avoidance and Tax Competition for Mobile Capital

Postprint. Please cite as: Leibrecht, Markus and Thomas Rixen (2010) Double Tax Avoidance and Tax Competition for Mobile Capital, in: Martin Zagler (Ed.): International Tax Coordination. An Interdisciplinary Perspective on Virtues and Pitfalls, Routledge, 61-97. https://doi.org/10.4324/9780203849026

Pareto-improving indirect tax coordination and tax diversity

Coordination in tax matters, in the EU and elsewhere, has been largely driven by the movement of taxes towards some common level and, therefore, towards tax uniformity. Making use of a perfectly competitive general equilibrium framework of international trade in which governments provide global public goods, it is shown that, starting from a Nash equilibrium, there exist strict Pareto-improving multilateral tax reforms that are consistent with tax diversity.

Economic Integration and Tax Coordination in Regional Economic Communities

Chapter 8 reviews the various stages of economic integration that can be distinguished and discusses VAT (and excise tax) coordination in the presence and absence of border controls. All African countries belong to a regional economic community (REC), and often to more than one. The countries are closely monitoring the remarkable combination of free politics and free economics achieved by the common market (now the single market) of the member states of the EU. Free trade and free competition raise the standards of living in participating member countries. In this setting, tax coordination should ensure that equal conditions for competitors are not distorted by discriminatory tax systems—a criterion that is referred to as tax neutrality. At the same time, however, the participating countries should retain as much tax autonomy as possible in order to be able to pursue their own social and economic policy goals.