Economic Integration, Tax Erosion, and Decentralisation: An Empirical Analysis

DOI: 10.4236/me.2013.410A003   PDF   HTML     3,107 Downloads   4,710 Views   Citations


This paper addresses the issues of whether and how economic integration can affect the ability of the central governments to raise tax revenues and lead to a greater decentralisation of the public sector. To this purpose, a country-specific measure of tax erosion is derived. That is used as a determinant of the degree of fiscal federalism. We find that an increase of economic integration causes a decline of the implicit tax rates on mobile capital and the process of tax erosion positively contributes to the growth of public sector decentralisation.


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F. Gastaldi, P. Liberati and A. Scialà, "Economic Integration, Tax Erosion, and Decentralisation: An Empirical Analysis," Modern Economy, Vol. 4 No. 10A, 2013, pp. 14-26. doi: 10.4236/me.2013.410A003.

Conflicts of Interest

The authors declare no conflicts of interest.


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