We study the effectiveness of local borrowing regulations in maintaining fiscal sustainability and the effect of supervision over municipal budgeting on local debt using a panel on municipalities in Germany's most populous state of North Rhine-Westphalia from 2003 to 2011. The identification...

If a public project is financed through private contributions with convex costs, project completion may be delayed. The paper examines how asymmetries, the order of moves, and the absence of commitment will affect the completion time. All three factors are shown to cause delay, although for...

We study the role of competition for the hold-up problem in foreign direct investment in resource-based industries. The host country government is not only unable to commit not to expropriate investment ex post, but is also unable to commit to the provision of local resources. In the case of...

Regional productivity differences provide scope for productivity-enhancing labor mobility. Redistribution reduces relocation incentives through higher taxes or lower transfers. Combining an intensive labor supply margin with an extensive, productivity-enhancing migration margin, we determine how...

We analyze the optimal regional pattern of public employment in an information-constrained econd-best redistribution policy showing that regionally differentiated public employment can serve as an expenditure side tagging device, bypassing or relaxing the equity-effciency trade-off. The optimal...

We introduce cross-border shopping and indirect tax competition into a model of optimal taxation. The Atkinson–Stiglitz result that indirect taxation cannot improve the efficiency of information-constrained tax-transfer policies, and that indirect taxes should not be differentiated across...

A gradually introduced reform of local government accounting made it temporarily likely for municipalities in the German state of North Rhine-Westphalia to avoid the effective control of their budget by the authorities in charge with overseeing local government budgets and enforcing the existing...

We study the market for vaccinations considering income heterogeneity on the demand side and monopoly power on the supply side. A monopolist has an incentive to exploit the external effect of vaccinations and leave the poor susceptible in order to increase the willingness to pay of the rich....

Adjustment costs cause movements of the labour share if the economy experiences demand or wage shocks. With linear adjustment costs and Cobb-Douglas technology, these movements are independent of the size of these shocks and depend only on the size of the adjustment costs.

A firm facing employment protection will defend its market position more fiercely than a firm operating without such restrictions. However, ex ante it will be more reluctant to expand its market position. For the benchmark case of contest competition, the defensive effect dominates. A firm...