Can Private Giving Promote Economic Segregation?

Horstmann, Ignatius J.; Scharf, Kimberley A.; Slivinski, Al

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Can Private Giving Promote Economic Segregation?

36 Pages Posted: 19 May 2004

See all articles by Ignatius J. Horstmann

Ignatius J. Horstmann

University of Toronto - Institute for Policy Analysis; University of Toronto - Rotman School of Management

University of Warwick - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)

Al Slivinski

University of Western Ontario - Department of Economics

Date Written: April 2004

Abstract

This Paper explores the theoretical relationship between tax relief for private giving and locational equilibria. Tax relief for giving may receive political support at the local level because of its distributional effects; however, through its effects on public provision choices, such relief may affect individual location decisions and, in so doing, may promote economic segregation rather than integration. In such a scenario, a ban on local tax incentives for giving would be Pareto-improving and would thus be sanctioned by a majority-supported federal tax constitution.

Keywords: Private provision of public goods, jurisdiction formation

JEL Classification: H20, H70

Suggested Citation: Suggested Citation

Horstmann, Ignatius J. and Horstmann, Ignatius J. and Scharf, Kimberley and Slivinski, Alan, Can Private Giving Promote Economic Segregation? (April 2004). Available at SSRN: https://ssrn.com/abstract=547824