FISCAL COMPETITION IN DEVELOPING COUNTRIES: A SURVEY OF THE THEORETICAL AND EMPIRICAL LITERATURE
- MADIÈS, THIERRY University of Fribourg, Switzerland
- DETHIER, JEAN-JACQUES World Bank, Georgetown University, USA
- 2012-5-16
Published in:
- Journal of International Commerce, Economics and Policy. - World Scientific Pub Co Pte Lt. - 2012, vol. 03, no. 02, p. 1250013
English
Fiscal competition between governments to attract investment can take the form of business tax rebates, productivity-enhancing public infrastructure, tax holidays, accelerated depreciation allowances or loss carry-forward for income tax purposes. This paper surveys the recent theoretical and empirical economic literature and deals with three issues. First, it examines if the theoretical literature on fiscal competition and bidding races contribute to a better understanding of these phenomena in developing countries. Second, it examines whether FDI inflows in developing countries are sensitive to fiscal incentives and if there is empirical evidence of strategic behavior by developing country governments in order to attract FDI. Finally, it reviews the literature's conclusions about fiscal competition among local governments in developing countries.
- Language
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- English
- Open access status
- green
- Identifiers
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- DOI 10.1142/s1793993312500135
- ISSN 1793-9933
- Persistent URL
- https://sonar.ch/global/documents/139538
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