Bulletin n. 1-2/2014
November 2014
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Redoano Michela
    Tax competition among European countries. Does the EU matter?
    in European Journal of Political Economy , Volume 34, June 2014 ,  2014 ,  353-371
    This paper provides a simple theoretical model of capital tax competition between countries that differ in spatial location, and where cross-border investment costs are proportional to distance (a gravity model). We model EU membership as a reduction in ‘distance’ between countries. Precise predictions about reaction functions' intercepts and slopes are derived. In particular we find that joining the Union lowers the intercept and that all countries react more to member countries than they do to non-members. These predictions are largely confirmed using a panel data set of statutory corporate tax rates on Western European countries.
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