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This paper examines the evolution of Tieboutian clubs over time and across metropolitan regions. We address this topic by examining a large set of socioeconomic characteristics of metropolitan regions to assess empirically whether and how those member attributes may figure into a Tiebout sorting process. The method entails factor analysis to reduce an initial set of forty-nine variables to a much smaller number of factors that represent groups of intercorrelated variables. An analysis of variance is then undertaken on the corresponding factor scores to assess whether census tracts within municipalities are more alike than those between municipalities. We do this for the Los Angeles metropolitan region using census data from 1970, 1990 and 2020, and we repeat the process for the twenty largest metropolitan regions (core-based statistical areas) in the USA for 2020. Several key results emerge from this analysis. While in most cases seven or eight factors emerge repeatedly, four are most persistent and ubiquitous; these pertain to economic class, race, age cohort and immigration status. These are, in effect, the most enduring fundamental aspects of the socioeconomic landscape in metropolitan regions in the USA. The final question addressed by our work links back to the original motivation, which is to assess the role of municipalities in the formation of these clubs. We do so for the twenty largest metropolitan regions in the USA. The results from our analyses of variance are compelling. With very few exceptions we find that census tracts with similar club characteristics have a strong tendency to be co-located within the same municipalities. This strong result holds regardless of which metropolitan region we examined, or which decade. This affirms that municipalities are indeed Tieboutian clubs. [ABSTRACT FROM AUTHOR]

This paper examines a new element of the Tiebout process, which is whether Tiebout mobility impacts the organization of residents and firms within a single metropolitan area. Unemployment insurance (UI) is a state-wide policy. We therefore examine whether variation in UI policy outcomes causes firms and residents to alter their locations within the local urban economy. Our empirical process is to use a matching pairs regression discontinuity design based on the nine largest cities where state boundaries cross the metropolitan area. We find that Tiebout mobility results from the UI wage replacement rate, the UI eligibility rate, and UI taxes. [ABSTRACT FROM AUTHOR]

Tiebout (J Polit Econ 64:416–424, 1956) argues that local public goods will be provided efficiently if households vote with their feet to move to the jurisdiction that best matches their preferences. This outcome may be impeded by overlapping jurisdictions of municipalities, school districts, and police agencies. To investigate the impact of coterminous borders on Tiebout sorting, two counties with similar demographics are chosen within the New York City metropolitan area. Differing histories lead to municipalities in Bergen County, NJ, always being coterminous with elementary school districts and police agencies, while few municipalities in Nassau County, NY, have their own police agencies and even fewer have their own school districts. Heterogeneity of sociodemographics and service quality are calculated between neighboring Census block groups, and absolute difference in median household income is regressed on these measures and interactions between the three kinds of service area borders. School district and police agency borders and quality are found to not be individually significant (with one minor exception). Police agency borders interacted with municipal borders increase income sorting, while school district borders interacted with police agency borders decrease income sorting. Income differences are also correlated with differences in the proportion of White and Black population in neighboring block groups, supporting previous findings that Tiebout sorting may exacerbate segregation. Municipal borders are an independently significant influence on income sorting across all specifications, indicating the important and independent role of local public goods other than education and public safety in residential location. [ABSTRACT FROM AUTHOR]

Three diverging interpretations of the property tax dominate the standard economic literature: the benefit view considers it meaningless to assess a distributive profile for the property tax; the capital-tax view assumes a progressive profile; and the excise-tax view assumes a regressive profile. This article discusses these views with theoretical and empirical arguments and defends the excise-tax view. Then, the distributive profile of the property tax in Québec is assessed thanks to a rich administrative database. The property tax appears very regressive. In addition, no general pattern appears depending on the size of the urban zones. At the opposite, property tax-to-income ratios depend steeply on the household composition, because of the economies of scale in housing consumption: they are larger for singles than couples (and even larger for aged singles) and lower for households with children than without children. [ABSTRACT FROM AUTHOR]

Before 1941, U.S. regulatory bodies were unrestricted. By 1946, several states and the federal government had imposed restrictions. It further took 40 years for every state to enact an Administrative Procedures Act (APA), a law that dictates how regulatory agencies promulgate regulations. Despite being overlooked, APAs significantly impact states in often missed or ignored ways. We analyzed each state's rulemaking procedures at four different points in time to see if they've increased or decreased restrictions on regulatory agencies. We created two indexes: a Restrictiveness index, a summative index, and another derived from multiple correspondence analysis. We studied how legislative professionalism, interest group constraint, citizen ideology, and government partisanism affect APA restrictions.

We analyze land-use regulation and the determinants thereof across Swiss municipalities. We construct several residential development stringency indices based on a comprehensive survey. These indices capture various aspects of local regulation and land-use coordination across jurisdictions. Combining these indices, we construct an index that provides harmonized information about what local regulation entails and the local regulatory environment across municipalities. Our analysis shows that historical building density, natural amenities, socio-demographic factors, cultural aspects and municipal competition are important determinants of local land-use regulation. However, a large share of land-use regulation variation remains unexplained. Moreover, our results indicate that more stringent land-use regulation is associated with steeper house price increases but less urban sprawl. [ABSTRACT FROM AUTHOR]

The traditional literature on fiscal federalism prescribes centralization of redistributive tasks to avoid welfare- or tax-induced migration. More recent work shows that even if the redistributive part of taxation, namely progressivity, is set by an upper-layer government and lower-layer governments only compete via a tax multiplier, income sorting can flatten effective tax progressivity. We argue that upper-layer governments anticipate the impact of local income sorting and strategically adjust their statutory tax schedules. The mobility of the income tax base sets limits to such strategic behavior. We apply causal machine learning methods to identify the effects of decentralization on the statutory tax structure in Switzerland. More decentralized cantons implement more redistributive statutory tax schedules for the least-mobile household types. [ABSTRACT FROM AUTHOR]

This paper examines the effectiveness of provincially enacted policies to deter the COVID-19 mortality rate during the pre-vaccine rollout pandemic in Canada. The data has been collected from Statistics Canada and other various online resources including the Blavatnik School of Government and provincial statements. Relevant information was collected for individual provinces from 11 March 2020 to 31 Jan 2021. A two-stage least squares methodology was applied by examining, by province, the cumulative number of deaths reported as due to COVID-19 before and after policy implementation. We examine the effect of each of several policies based on a 20 plus day lagged period after being put into place. Our main finding is that workplace closures and strict gathering restrictions are associated with a decrease in mortality rates of COVID-19 in Canada. We also find that the strength of the policies overall is associated with a decrease in mortality rates of COVID-19 in Canada. Using data from the Google Mobility Report we confirm that the announcements of the policies had significant behavioural effects on individuals’ movements. We interpret that social distance policies, specifically the workplace closure and strict gathering policies, have been effective factors decreasing mortality from the Coronavirus epidemic in Canada.

The changing legislative landscape of the U.S. wine market provides a scenario to examine the effect of regulation on the size distribution of firms. Using the variation across states and time in the sum of in-state and out-of-state adult populations between 2002–2017, and a difference in difference-style empirical model, I examine how restrictions on Direct to Consumer (DTC) sales impact the number of establishments and the employment at wineries. I find that the expansion of the potential wine market by 10 M adults caused about a 3.5% increase in the number of wineries. While reduced DTC restrictions explain growth in the number of wineries, I find no effect of lessened restrictions on the number of winery employees, though there is evidence of a lagged effect. Additionally, I find that the growth of smaller wineries substantially outpaces that of larger wineries when regulations are lessened. These results suggest that regulatory barriers in particular industries may allow states to maintain an artificial size distribution. [ABSTRACT FROM AUTHOR]

We employ a 70-year panel to examine the factors that influenced the timing and type—statutory prohibition, constitutional prohibition, or local option—of US state-level alcohol regulations in the seven decades prior to national Prohibition in 1920. We find that alcohol interests such as the state's level of employment in breweries and distilleries, as well as the amounts of barley grown, generally impacted a state's legal regime. Our results also suggest that states with larger concentrations of "dry" Christian denominations were more likely to prohibit, while those with more "wet" denominations were less likely to do so. Nearest neighbor effects likewise were important: states were generally more likely to pass statewide prohibitions when their neighboring states had such prohibitions in place. [ABSTRACT FROM AUTHOR]

Using county-level analysis, this study demonstrates that there exists at most a minor relationship between the large, contemporary geographical variation in U.S. intergenerational income mobility and state-level policies. In addition to investigating the effects of specific policies, we introduce an omnibus test for state policy differences in total, based on the principle of geographic discontinuities. We further explore the discrepancy between these findings and the expected efficacy of mobility-enhancing policies seen in common, applied economic models and successful program evaluations. We conclude that the gap between quasi-experimental evaluations and observed policy effects presents pressing questions for further study. [ABSTRACT FROM AUTHOR]

The part of the UK fiscal framework which determines how UK government funding is allocated across the four home nations has undergone profound change since 2012, given tax and social security devolution. The UK government's post-Brexit plans for regional development funding, state aid, regulation and trade negotiations have led to significant disagreements about the nature of the devolved fiscal and constitutional settlement. And the COVID-19 pandemic provided a major shock to a fiscal system with limited flexibility for the Scottish, Welsh and Northern Irish devolved governments. This paper reviews the changes and challenges faced during these reforms and policy shocks. We find that: tensions about reforms to funding arrangements reflect the inconsistency of principles guiding the reforms; that the UK government's post-Brexit plans do reduce the policy autonomy of the devolved governments, but reflect powers central governments often have in even highly decentralised countries; and that temporary changes to rules and the nature of the COVID-19 pandemic prevented a subnational fiscal crisis, but that more systematic change may make the system more robust to future shocks. This suggests that a review of the principles underpinning the UK's subnational fiscal and economic policies would be highly worthwhile. [ABSTRACT FROM AUTHOR]

This paper reports on the results of a large infrastructure investment experiment in which $68 million in spending was randomly allocated across a set of low-income urban neighborhoods in Mexico. We show that the program resulted in meaningful improvements in the access of the average household to numerous forms of infrastructure, such as electric lighting, street lights, sidewalks, medians, and road paving. We exploit the study’s randomized saturation design to understand how spillovers at the municipal level might work to undermine causal inference when multiple levels of government provide forms of investments that are close substitutes. Our results suggest that the strategic response of municipal governments to federal spending is muted. The program increased the aggregate real estate value in program neighborhoods by two dollars for every dollar invested.

Antecedentes: La segunda generación de modelos de federalismo fiscal (SGFF) advierte que la dependencia fiscal puede incitar la pereza de los gobiernos locales y estancar la generación de ingresos propios; además, puede promover la corrupción y una menor rendición de cuentas (Oates, 2005). Este trabajo somete a prueba la hipótesis de sacrificio de la rendición de cuentas y de la transparencia por una mayor interdependencia fiscal de los gobiernos subnacionales en México (Gamkhar y Shah, 2007).Metodología: Estimamos un modelo de vectores autorregresivos de datos panel (VARP) que permite examinar la interrelación dinámica de las variables para el periodo de 2003 a 2013.Resultados: Encontramos evidencia de la causalidad del entorno fiscal federal sobre el esfuerzo fiscal, la transparencia y la rendición de cuentas, de acuerdo con el nivel de desarrollo de las entidades federativas.Conclusiones: Los resultados aportan evidencia de que mayores transferencias se asocian con mayor pereza recaudatoria, menor transparencia y mayor rendición financiera de cuentas. De la misma manera, un mayor desarrollo económico revela efectos dinámicos positivos del esfuerzo fiscal hacia la transparencia y la rendición de cuentas.

We examine an open economy's strategy to reduce its carbon emissions by replacing its consumption of coal—very carbon intensive—with gas—less so. Unlike the standard theoretical approach to carbon leakage, we show that unilateral CO2 reduction policies generate a higher leakage rate in the presence of more than one carbon energy source and may turn counterproductive, ultimately increasing world emissions. We establish testable conditions as to whether a unilateral tax on domestic CO2 emissions increases the domestic exploitation of gas and whether such a strategy increases global emissions. We also characterize this strategy's implications for climate policy in the rest of the world. Finally, we present an illustrative application of our results to the United States. [ABSTRACT FROM AUTHOR]

Sunset provisions are clauses embedded in legislation that cause a piece of legislation or a regulatory board to expire on a certain date unless the legislature takes affirmative action to renew the legislation or board. Supporters and legislators offer several reasons why sunset laws are valuable and useful. An article by Baugus and Bose (2015), reported on the king‐and‐council model of Congleton (2001), suggests that sunset laws are a key tool legislatures use in asserting themselves against an executive branch that often dominates state government. We investigate this possibility using empirical analysis, which suggests that part‐time legislatures, specifically, a form of part‐time legislature referred to as hybrid legislatures, are more prone to use sunset legislation as a tool to keep the executive preferences in check. [ABSTRACT FROM AUTHOR]

Slovenia has only one tier of sub-national government, that is, municipalities. Currently, there are 212 municipalities, and they exhibit the same responsibilities they need to provide to their residents, regardless of their size, and these differences in size are even in the range 1:100. The new national strategy for the development of local self-government has, therefore, stressed the necessity to promote cooperation among municipalities and even potential mergers, not just to ensure cost-effectiveness but also to increase the capacity of municipalities to perform various developmental tasks. Consequently, the aim of the article is to analyse the evolution and factors driving inter-municipal cooperation and municipal mergers, where Slovenia is taken as an example, and case study approach is used in this manner. The results of the analysis indicate that territorial fragmentation at the local level has been accompanied by the increase in the inter-municipal cooperation, although some time lag can be observed. Moreover, the increase in the cooperation can be observed in particular with the onset of economic slowdown and fiscal stress emergence. The results also portray that substantial territorial rescaling cannot be expected in the near future, as suggested by the analysis of driving factors that should contribute to this process, as well as by rather weak ability of central government to promote the process. Consequently, from the practical perspective, we might expect larger role of more in-depth trans-scaling strategies as a mechanism to overcome the problem of sub-optimal size of municipalities in Slovenia.

In a two-country economy, we analyze how tax competition differs from the standard all-Nashian tax competition, if one or both countries are Kantians in Roemer's sense. Kantians are shown to choose a higher tax rate than Nashians for any given tax rate of the other country, which indicates that they seek to mitigate the (Nashian) race to the bottom. In case of symmetric countries, the all-Kantian tax competition turns out to be efficient and the inefficient race to the bottom is weakened in economies with a Nashian and a Kantian. That confirms the intuitive idea that countries following the Kantian categorical imperative avoid or at least soften the socially undesirable impact of (Nashian) self-interest. We also investigate the incentives of opportunistic countries to choose Nashian or Kantian behavior out of self-interest and find that either both governments choose to behave as Kantians or that—under different conditions—the robust Nashian self-interest supersedes Kantian moral principles such that the inefficient all-Nashian tax competition results. [ABSTRACT FROM AUTHOR]

We examine the possible impacts of demographics on outcomes of competition for capital in political economy. For this, we develop a multi-region overlapping generations model, wherein public good provision financed by capital taxation is determined by majority vote. When population is growing, younger people represent the majority, whereas when it is decreasing, older people are in majority. We uncover the possible externalities arising from political processes as well as capital mobility and show that an inefficiently high capital tax rate is more likely to emerge in an economy with decreasing population than in one with growing population. [ABSTRACT FROM AUTHOR]

This paper investigates the effects of double tax treaties (DTTs) on foreign direct investment (FDI) after controlling for their relevance in the presence of treaty shopping. DTTs cannot be considered a bilateral issue, but must be viewed as a network. We define tax distance as the cost of channelling corporate income from one country to another and, by considering treaty shopping through intermediate jurisdictions, we calculate the shortest (i.e. the cheapest) distance between any two countries. We show that relevant tax treaties—which reduce the direct tax distance both over domestic law and the entire existing treaty network—will increase FDI by about 18%. [ABSTRACT FROM AUTHOR]

Does environmental enforcement actions, including states' strategic responses to neighbors' policy choices, depend on governor party affiliation? Do governors of different parties use environmental policy instruments differently? Our paper addresses these questions. Accounting for endogeneity and omitted variable biases, we find that Democratic governors on average depress overall inspection rates versus their Republican counterparts, but not the frequency of punitive actions (except in the South). Strategic responses to neighbors do not depend on party affiliation. Finally, treating party affiliation as endogenous and allowing for strategic interaction effects both appear important for our estimations. [ABSTRACT FROM AUTHOR]

Over the last 20 years, local municipalities have been implementing minimum wage ordinances at an accelerated rate. These local changes, along with state and federal minimum wage increases, are included in the examination of the impact of minimum wage hikes on employment growth of teenagers in the food services and drinking places subsector. While most minimum wage research focuses on employment levels, recent contributions highlight the importance of analyzing employment growth. Following this trend, this study focuses on teenagers within the restaurant industry to test for the impact of minimum wages on inexperienced workers. Using a distributed-lag model, the results show that an increase in a minimum wage reduces employment growth for teenagers within this subsector. The effects of minimum wages within this demographic were most strongly felt in the first three years following an increase in minimum wage. Specifically, the results show that a 10% increase in the minimum wage decreases the employment growth rate by approximately 2.27% over a period of three years. [ABSTRACT FROM AUTHOR]

Using a simple asymmetric capital-tax competition model where the allocation of mobile capital is distorted in non-cooperative equilibrium, this paper analyzes the welfare impact of regional tax coordination on a range of possible tax rates (a combination of maximum and minimum capital taxes made by a subset of regions). Under the assumption that the ownership of immobile factors (e.g., business land) is diversified across regions, a new possibility of beneficial coordination arises which has not been identified before: tax-range coordination "among capital-exporting regions" or "among capital-importing regions" may improve the welfare of all regions. This is in contrast to the case without cross-ownership where both capital-exporting and capital-importing regions must be involved in tax-range coordination in order to achieve a Pareto improvement. [ABSTRACT FROM AUTHOR]

In this study, we apply an extended Granger causality test to examine whether fiscal decentralization in South Korea creates pro-growth effects. Our results show that the pro-growth effects in South Korea are significant at the provincial level, only from a revenue perspective. This result may suggest that strengthening local taxation power (revenue-centered decentralization) can better serve a local economic development goal than simply loosening use restrictions on inter-governmental transfers (expenditure-biased decentralization). At the city and county levels, however, no such pro-growth effects exist; we instead find partial evidence in support of the reverse causality–economic growth precedes revenue decentralization. This conflicting result seems to be associated with scale economies in public goods provision and the gap in administrative capacity between province- and lower-level local governments. [ABSTRACT FROM AUTHOR]