The theory of political yardstick competition states that a comparison of public service levels and tax rates with those in nearby jurisdictions can provide voters with a useful instrument to assess politicians’ performance. However, we argue that fiscal disparities bias this yardstick, and...

Welfare is often administered locally, but financed through grants from the central government. This raises the question how the central government can prevent local governments from spending more than necessary. We analyze block grants used in The Netherlands, which depend on exogenous spending...

Fiscal equalization through the allocation of central government grants may have adverse distributional implications if these grants capitalize into house values. We investigate the impact of changes in grants induced by a reform of the Dutch grant system. Since this reform was implemented...

This paper provides a spatial-econometric analysis of the setting of property tax rates by Dutch municipalities. We find evidence of tax mimicking: a ten percent higher property tax rate in neighboring municipalities leads to a 3.5 percent higher tax rate. Mimicking is less pronounced in...

This paper analyses the role of partisan politics in determining the local tax burden. Property taxes are the most important revenue source which municipalities in the Netherlands can decide upon themselves. Using a new data set on Dutch local property taxes in 1996, it is concluded that...

Drawing on nationwide and representative survey data for the Netherlands, this article tests, first, to what degree economic subjects are aware of the level of both government debt and deficits, and, second, examines whether fiscal policy relates to individual saving decisions. The results...