Fiscal Competition in a Transition Economy

48 Pages Posted: 24 Sep 2007

See all articles by Laura Solanko

Laura Solanko

Bank of Finland - Institute for Economies in Transition (BOFIT)

Date Written: May 15, 2001

Abstract

The paper analyses fiscal competition for mobile capital between identical regions in a transition country. A framework similar to Keen-Marchand (1997) is used to analyse welfare effects of regional competition. It is shown that in very early transition when the share of the old sector is overwhelming, consumers in a transition economy may be better off in a competitive equilibrium. The decision-makers, however, would prefer to coordinate their fiscal policies.

Keywords: tax competition, fiscal competition, transition

Suggested Citation

Solanko, Laura, Fiscal Competition in a Transition Economy (May 15, 2001). BOFIT Discussion Paper No. 4/2001, Available at SSRN: https://ssrn.com/abstract=1016032 or http://dx.doi.org/10.2139/ssrn.1016032

Laura Solanko (Contact Author)

Bank of Finland - Institute for Economies in Transition (BOFIT) ( email )

Helsinki 00101
Finland

HOME PAGE: http://www.bof.fi/en/suomen_pankki/organisaatio/asiantuntijoita/solanko_laura/

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