In this paper we propose a novel theoretical model of tax competition at the local level. Large jurisdictions (cities) compete both locally with smaller neighbouring communities and interregionally with more distant cities, while small jurisdictions (hinterlands) compete only with other...

This paper models the optimal division of public goods provision between central and regional governments in an economy with interregional tax competition. Regional provision is inefficient because governments compete for scarce capital by lowering their capital taxes and public good levels to...

We consider the effects of income redistribution when people can migrate from one country to another, and when land within each country is heterogeneous. Taxes related to income can then affect property values, and can induce migration, which further affects property values. We show that under...