Published online by Cambridge University Press: 17 August 2016
In the context of a stylised game theoretical framework of capital tax competition, we show that when repeated policy interactions are associated to a systematic punishment of the deviating policymaker, a co-ordinated outcome can be the solution to the non co-operative tax game. This result suggests that explicit forms of policy co-ordination, such as a centralised tax authority, could in fact be largely unnecessary.
Dans le cadre d'un modèle de concurrence fiscale, nous montrons qu'une coordination implicite des taux de taxation peut résulter des interactions répétées entre les autorités fiscales, lorsque l'autorité qui déciderait de poursuivre une stratégie non coopérative pendant une période est systématiquement punie par la suite. Ce résultat suggère que des formes explicites de coordination, comme l'instauration d'une autorité fiscale centralisée, pourraient bien être inutiles.
The authors are grateful to Bertrand Crettez, Luca Onorante, Pierre Pestieau, Ludger Schuknecht, Rolf Strauch, Emmanuelle Taugourdeau, Juergen von Hagen, an anonymous referee of the ECB Working Paper Series and three anonymous referees of this review for comments and constructive criticism. An earlier version of this paper was presented at the 5th Banca d'ltalia Workshop on Public Finance (Perugia, 3-5 April 2003). Comments from Vieri Ceriani, David Heald, Michael Keen, Ranjana Madhusudhan and other workshop participants are also gratefully acknowledged. The opinions expressed herein are those of the authors and do not necessarily reflect those of the European Central Bank. [email protected][email protected]