Tax Interaction Among Walloon Municipalities: Is There Room For Partisan Monopoly Effect?

Three sources of tax interactions among local jurisdictions are usually considered in the literature: public expenditure spill-over, tax competition and yardstick competition. However, another source of interdependency has been suggested in recent years: the ‘political trend'. According to this hypothesis, politicians of the same party tend to behave in the same way as a partisan reference group (Santolini, 2008). In fact, citizens also vote based on ideology. Political parties provide important cues on how politicians will act when elected. As a result, local incumbents of the same party are... Mehr ...