Electoral rules and incentive effects of fiscal transfers: evidence from Germany

Peter Egger, Marko Koethenbuerger and Michael Smart

No 2010/44, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: The impact electoral rules and fiscal equalization programs have for local public finance are separately analyzed in the literature. This paper empirically analyzes whether legislator elected under different rules respond differently to changes in fiscal incentives. Using a reform of the electoral rule and the equalization system as a natural experiment, we find that municipalities which elect legislators under proportional rule react less strongly to changes in fiscal incentives.

Keywords: Electoral rule; form of municipal government; fiscal equalization; business tax rates; comparative political economy. (search for similar items in EconPapers)
JEL-codes: C2 D7 H7 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2010
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2010-44

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