Tax competition in a fiscal union with decentralized leadership

This paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment. Lack of commitment implies that local tax policy is chosen prior to federal transfers. The paper's main result is that ex-post federal policy neutralizes horizontal fiscal externalities, insulating tax policy from capital mobility. Federal policy, however, introduces a new source of inefficiency unrelated to tax competition. Specifically, ex-post transfer payments prove to be equivalent to an interstate revenue-sharing system which may render federal intervention in the presence of fiscal externalities welfare-deteriorating relative to tax competition.     

Critical factors in technological innovation and their policy implications

This paper explores the critical factors which affect the innovation proccess. Some ways in which some of these factors can be influenced by appropriate policy measures are discussed. In particular, the role of the federal government in promoting innovation is discussed.The role of the government in stimulating and nurturing the innovation process is a controversial one. Proponents of the free enterprise system, many of whom are spokespersons for various industries, have persistently pointed out the deleterious effects of regulation and control on the innovation process. By contrast, advocates of an activist government role are often able to cite the protection of the common welfare as a primary need for government intervention. In truth, the “government” is a patchwork of many governments, operating through many agencies and affecting firms and individuals at several levels and leverage points. The same regulation that has deleterious effects on Industry A may be a stimulus for innovation in Industry B. Even in Industry A, the regulation may act as a force in directing efforts toward certain types of R&D programs that would not otherwise be undertaken.In this paper we examine the specific instances where innovation projects, both product or process types, were affected by government regulation. We also briefly review the critical factors which affect the innovation process and how various governments in industrialized countries have taken actions to influence these factors. Finally, we examine some general guidelines for policymaking purposes.     

Technology policy between ‘diversity’ and ‘one best practice’ — A comparison of Korean and German promotion schemes for new production technologies

Policy makers in all industrialized countries are increasingly orienting their science and technology policy towards foreign patterns. There seems to be ‘one best practice’ which is used by all nations to make their economies fit for global competition.This paper doubts this paradigm. By comparing the South Korean and German promotion schemes for new production technologies, it is shown that an appropriate technology policy has to take the individual national system of innovation into consideration. Merely initating the examples of countries with different frame conditions is inappropriate.Diversity in science and technology policy has been the precondition for the success of contributions of these policies to economic and technological development in both South Korea and Germany.     

Public support to innovation and imitation in a non-scale growth model

This paper studies technology policy within a version of Jones's [1995. R&D-based models of economic growth. Journal of Political Economy 103, 759–784] non-scale R&D-based growth framework that incorporates imitation of foreign techniques. In the model, imitation is the most important source of productivity growth at the beginning of the convergence process, whereas innovation dominates later on. In addition, the transitional dynamics of the model can account for well-known empirical regularities regarding the relationship between the level of economic development and public support to technology innovation and imitation. The paper shows as well that, even though policy in Jones-type non-scale models has no long-run growth effects, level effects can be substantial.     

Democracy and adaptation to economic and technological change: Is the British political system capable of adjusting?

Political systems provide the framework for organizational and technological change. Democratic systems are in some respects more open to economic and social adjustment than non-democratic systems; but the conflicting demands of entrenched interests and competition among parties for votes themselves create obstacles to adaptation.Britain's political system is the most stable in Western Europe, but it is also (after Italy) the one which is showing most signs of strain. How far is political stability a source of strength or of weakness under conditions of rapid economic and technological change? What aspects of Britain's current political difficulties are common to all democracies (as Sam Brittan argued in a classic study), or to all European social welfare economies, and what aspects are peculiar to our system alone? After five years of the most self-consciously radical government which Britain has had since 1945, how successful has our current government been in promoting economic and social change, while resisting any changes in our political system?It is argued that there has been a negative interaction between repeated efforts to transform Britain's industrial structure, and industrial relations, for example, and the obstacles to change posed by a restricted and centralised political system. Other illustrations of the interaction between political structure and policy output are taken from the evolution of Britain's relations with the European Community, from the management of industrial collaboration with other governments, and from attempts to reform the finances of local government. Britain's experience is compared and contrasted with those of the United States, France, Germany and Japan.     

Incubator,technology, and innovation centres in Switzerland: features and policy implications

Only since the early 1990s, when unemployment rates in Switzerland soared to unprecedented levels, has federal technology and innovation policy begun to design their activities with regard to employment and the establishment of new firms. Now, all across the country, private as well as public incubator facilities, technology and innovation centres have begun to spring up. This paper starts by describing the theoretical and methodological background of a survey of incubator, technology and innovation (ITI) centres. In a first step, all cantonal offices for economic promotion were asked to report and to describe incubator facilities, technology and innovation centres within their realm. In a second step a selection of centres were analysed in depth. The key findings are that: (1) ITI centres are most commonly established by a combination of public and private initiatives; (2) the main motive for the creation of ITI centres is to promote startups and the innovative potential; (3) most ITI centres offer space to rent and make available joint amenities; (4) ITI centres are predominantly in manufacturing, services, and development activities; their level of technology input is high or very high; and (5) the spatial reach of most of the ITI centre is on the region. Together with selected foreign experiences, some conclusions and recommendations for the operation of such centres are formulated.     

A tale of two crises: Federal transfers and regional economies in Russia in 2009 and 2014–2015

We examine transfers from Russia’s federal government to the regions during the two recent economic crises. We show that while federal transfers in 2009 were large and targeted poorer regions, the 2014–2015 transfers were much smaller and not targeted. This policy shift was accompanied by a relatively greater decline in own revenues in the poorer regions and their worse economic performance overall. As a result, interregional budget expenditure inequality in Russia was significantly higher in 2014–2015 than it had been for years. This is important because regional budgets are responsible for a large share of investments, housing, education and healthcare.     

Economic, organizational, and political influences on biases in forecasting state sales tax receipts

This paper investigates factors influencing fixed bias in forecasting state sales taxes revenues. By extending an existing model used to explain forecast accuracy to include a series of complex interactions related to the potential political and policy use of revenue forecasts, the paper extends our understanding of the forecasting process in government. Exploratory empirical analysis based on survey data is used to provide evidence that bias in forecasting results, at least in part, from political and policy manipulation. There is also evidence that institutional reforms associated with ‘good management’ practices affect forecast bias, but in complex ways depending upon the extent to which political competition exists within the state.     

Beyond antitrust populism: Towards robust antitrust

The populist use of competition policies is on the rise again, associated with the growth of big-tech companies in the era of digital platforms. This article sees antitrust populism as a re-emerging force in the United States and Europe via greater politicisation of competition law enforcement. It addresses the basic tenets of antitrust populism in order to expose the fundamental problems that populist use of competition law entails. I argue for a rethink of antitrust policy on the intellectual foundations laid down by what Mark Pennington describes as ‘robust political economy’. We need greater regulatory humility and antitrust enforcement which takes both innovation and welfare seriously.     

Development by Decree: The Limits of ‘Authoritarian Modernization’ in the Russian Federation

The apparent success of state‐managed market economies has challenged the conventional wisdom that liberal democracy is the norm around which all capitalist countries tend to converge. If the link between democracy and development is more tenuous than we often think, the authoritarian variety of capitalism is not without its own problems, especially with respect to political legitimacy, innovation and regional development. This article explores these issues through the prism of ‘authoritarian modernization’ in Russia. We argue that this strategy is unlikely to succeed, even in its own terms, because (1) the political system fails to create favourable institutional conditions for modernization; (2) the economic system is beset by deeply embedded structural problems; and (3) the regional policy apparatus is torn between the goals of spatial equalization and spatial agglomeration. The article focuses on the Skolkovo Innovation Centre, the main symbol of Russian modernization, to demonstrate the territorial repertoire of the mega‐project, a state‐sponsored development strategy to create innovation clusters from above because they cannot emerge from below.     

Federalism,distributive politics and representative democracy

We analyze federal systems of government in which local public policies are financed by general taxation. In a decentralized political system there is, in each region, a vote to elect a local representative while in a centralized political system a single representative is elected by a federal vote. It is shown that under decentralization, voters strategically elect liberal representatives so as to nullify any element of cooperation between representatives in the decision-making stage. Thus, there is a trade-off between the budgetary externality and a "policy closer to the people", but the democratic choice is biased towards decentralization.     

ADVERTISING'S ELUSIVE ECONOMIC RATIONALE: PUBLIC POLICY AND TAXATION

Advertising and its effects have been debated for well over a century. In the last few decades a generally sceptical view of the benefits of advertising has been overturned by a series of academic advances in economics that detail a variety of ways in which advertising may affect the economy and society. This academic work has however been paralleled by a growing popular and political opposition to advertising and its social effects. In this paper, the positive economic case for advertising is challenged by an assessment of the main channels of its influence and by a review of the associated empirical findings on its economic and wider impact. A policy response of limiting the tax deductibility of business advertising is explored.     

税收优惠政策能否激励中国企业创新？——基于创新链视角的探究

选取2007—2019年中国上市公司的面板数据，从创新链视角探究税收优惠政策如何激励中国企业自主创新。研究发现，税收优惠政策对企业创新链的投入、产出以及效率环节均有显著激励作用。通过更换估计模型、构建工具变量等稳健性检验后，研究结论依然成立。异质性分析发现，税收优惠政策在创新投入端对非国企研发资金投入激励效果更强，对于国有企业研发人员投入以及企业创新链产出端激励效果更强；对于处于高技术行业的企业，税收优惠政策在企业创新链各个环节的激励作用都比非高技术行业企业更强。研究为企业创新决策、优化税收优惠政策增加了新的认知，为实施创新驱动发展战略提供了有益启示。     

Innovation policy in contemporary Queensland

This paper is about the how rather than the what of innovation policy in a contemporary setting. Most published research to date is concerned with the what: and the how of administrative reality appears to have been ignored by researchers.Political will (how public servants manage their commitment) to innovation policy creates a dilemma for scientists in politics. This dilemma is compounded by the bounded rationality of their training and cognitive processes, and their capacity to handle the administrative reality of innovation policy management.The significance of science-technology talk, and cognitive and occupational differentiation for appropriate management of innovation policy's “three-legged stool”—industry, government, and academia—is considered in relation to a learning rather than an administering bureaucracy.To illustrate this line of reasoning, a participant-observer approach using qualitative data from diary notes is used. Data reveal the patterning of a complex policy process. The importance in this process of carefully-constructed coalition networks and administrative reality is recognized.The most illuminating findings are that, for innovation policy, implementation is evolution through getting bits and pieces of the theme out at different places, at different times, with different people. Development of innovation policy requires multi-skilled professionals who possess varying experiential backgrounds. They have political nous, and are flexible and adaptable. They also understand that the patterning of process is beyond the reach of deliberate intervention by top-down views. In addition, mechanisms employed in attention directing, situation defining and evoking are significant for developing innovation policy.     

Competition for private capital and central grants: the case of Japanese industrial parks

Local governments invest in public infrastructure to develop their regions. When they depend on intergovernmental grants for local development and have opportunities to lobby upper-level governments for such grants, horizontal intergovernmental competition in lobbying activity may emerge in addition to competition over public infrastructure. This paper empirically examines the existence of these interactions between Japanese localities, by using data on the value of industrial parks as infrastructure provisions and on personnel interchanges between the central and local governments as a measure of lobbying activity. Our results suggest that a Japanese local government’s choice of the size of industrial parks and its invitation to central officers to act as a director on loan are positive responses to the neighboring local government’s policy choices. As the value of the industrial parks in a district is affected by the neighboring districts’ lobby activities and their industrial park values, we can interpret these results as evidence of inter-regional competition in these two dimensions, rather than control by the central government in this unitary state.     

Implementing the third way

This article examines the transfer of NPM strategies by comparing Service Charter initiatives in the United Kingdom, United States and Australia. These three countries, together with Canada and New Zealand,are partofwhathas beendescribedas the ‘core’ new public management (NPM) policy community (Common 1998). Service Charters are an NPM strategy intended to change the culture of public service delivery to focus on the needs of the users, identified as ‘clients’ or ‘customers’. The objectives are to make service providers more responsive to users by guaranteeing specific standards for service delivery, providing a substitute for competition and a benchmark for measuring service quality. The first section examines the historical and political context of the development of the Citizen's Charter and Service First programmes in the UK, customer service plans in the USA and Government Service Charters in Australia. The second section explores the similarities and differences between these charter initiatives based on analysis of public documents. There is evidence of convergence at the ideological level as managerial values underpin the service charter frameworks in all three jurisdictions (Walsh 1994; Pollitt 1995; Kettl 1997). Despite drawing from a similar toolkit influenced by private sector techniques, significant differences between the country contextshaveresultedindivergent strategies. Timing in the three countries examined suggests that national politics rather than global policy convergence is more significant in explaining the development of service charters. This case study provides evidence of policy transfer rather than policy convergence (Common 1998). The final section considers the limitations of the customer service model. Monitoring quality iscentral to theprogrammes in all three countries. Performance monitoring is essentially a quantitative methodology that requires criteria and indicators for measuring the quality of service delivery and programme outcomes. Two problems are considered. The first is the difficulty of specifying and measuring service quality. The second is that quality indicators derived from services marketing and management research do not take into account the characteristics of public services.     

Multi-sectoral interdependencies of regional public infrastructure investments

Public investment decision-making processes involve multiple and interrelated sectoral and regional policy objectives and budget constraints. This paper presents a dynamic spatio-economic model that considers multi-sectoral investment interdependencies using data at the prefecture level in Greece. The expenditure allocation dynamics of most types of regional public investment are found to be competitive with each other. This outcome is attributed to the lack of policy coordination, technological and budget constraints, geographical factors, and equity and political considerations. The investment interrelationships may have a significant effect on future state funding needs and the strategic assessment of infrastructure development at the country level.     

Why is there so little tax coordination? The role of majority voting and international tax evasion

It is a striking feature of EU tax policy that countries find it difficult to agree on capital tax coordination. This is in conflict with the prevailing theoretical view, according to which tax coordination is beneficial. This paper develops a political economy argument which may help to explain this puzzle. We consider a model of tax competition where fiscal policy decisions are taken via majority voting and tax evasion is possible but costly. It turns out that tax coordination agreements may fail to generate political support because middle income groups may lose from tax coordination, even if their capital income is below average.     

Federal deductibility and local property tax rates

Recent econometric work has suggested that federal deductibility of state and local taxes has raised the proportion of these taxes—especially property taxes—in local budgets. This paper lends additional support to these earlier findings by showing that one channel through which deductibility leads to higher local property tax revenues is by increasing the rate of local property taxation. Specifically, we find that if deductibility were eliminated, the mean property tax rate in our sample would fall by 0.00715 ($7.15 per $1000 of assessed property), or 21.1% of the mean tax rate.