This paper tests for mimicry in local tax setting, by using a panel data set of the English non-metropolitan districts in the 1980s — when property tax rate variability across districts was highest. The results confirm the presence of large and significant spatial interactions among districts....

Spatial interaction among local governments in tax setting and public spending decisions is receiving increasing attention in the applied public economics literature. Spatial interaction models rely on the presence of an externality from local budget making: in traditional public finance models,...