Tax decentralization notwithstanding regional disparities

Tax decentralization enhances fiscal discipline, but may also widen interregional disparities by triggering tax competition over mobile tax bases. Antonio Andrés Bellofatto finds that tax decentralization can be optimal even under Rawlsian social preferences which only weight the welfare of the poorest region in the economy. 

Reda the Study

Image courtesy of interviewee. May 24, 2022

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