This paper analyzes the impact of fiscal competition through infrastructure in a New Economic Geography framework. It is shown that regional competition leads to convergence if the trade costs are high but induces divergence if trade cost have fallen below a certain value. Moreover, fiscal...

The European Union (EU) provides grants to disadvantaged regions of member states to allow them to catch up with the EU average. Under the Objective 1 scheme, NUTS2 regions with a GDP per capita level below 75% of the EU average qualify for structural funds transfers from the central EU budget....

Although decision processes at the EU level are highly complex and often require unanimity, explicit side payments among member states are unknown. However, logrolling and redistributive policies are substitutes. This paper considers the EU regional policy as a substitute for explicit side...

This paper analyzes the e ects of asymmetric information between parents and child care centers about the quality of child care. In a dynamic game of incomplete information the child care center sends a signal about its child care quality. The parents cannot observe the true quality. By updating...

By international comparison as well as compared to other EU policies, the EU's Cohesion Policy (CP) evaluation system is far developed and institutionalized. This paper analyses the remaining gaps and shortcomings in the CP evaluation system against principles established by the OECD and others...

This chapter discusses factors that contributed to different economic dynamics across European regions and the prevailing disparities. The impact of EU Cohesion Policy in reducing disparities is studied based on the empirical evidence on the effects of EU regional policy. With more than thirty...

We develop a heterogeneous-fi rms model with trade in goods, labor mobility and credit constraints due to moral hazard. Mitigating fi nancial frictions reduces the incentive of high-skilled workers to migrate to one region such that an unequal distribution of industrial activity becomes less...

In this paper, we provide novel evidence on the contemporaneous and persistent effects of regional policy. We apply a quasi-experimental identification strategy exploiting the fact that municipalities in the West-German Zonenrandgebiet (ZRG) were eligible for substantial regional transfers...

This paper provides novel evidence on the role of income taxes for residential rents and spatial sorting. Drawing on comprehensive apartment-level data, we identify the effects of tax differentials across municipal boundaries in Switzerland. The boundary discontinuity design (BDD) corrects for...

This paper provides novel evidence on the role of income taxes for residential rents and spatial sorting. Drawing on comprehensive apartment-level data, we identify the eff ects of tax diff erentials across municipal boundaries in Switzerland. The boundary discontinuity design (BDD) corrects for...