Should the constitution of a federation allow for peaceful secession ? Constitutionally defined secession rules are optimal ex post if the federation breaks down. However, they may be suboptimal ex ante if the…
We analyze a two-period model, where risk-averse students divide their time between risky education, leisure and work. The education can migrate. Wage-tax financed transfer to students acts as an insurance, and…
This paper challenges the assertion that European politics would be closer to the citizens preferences if decision power were transferred from the Council of Ministers to the European Parliament. On the one…
We use a stylized model to show that, if transfers to the poor are founded on a security argument, there is a negative trade-off between law enforcement expenditures and criminality. In contrast, if transfers…
The paper considers governments' public procurement decision as a way of influencing industry structure. In a federation in which capital is mobile and capital taxation is harmonized, a home bias in public…
Tax competition arguments suggest that a government that operate in an open economy (such as local governments) should not and will not rely on non-benefit taxes, such as the income tax. Yet we observe reliance…
This paper outlines some of the implications of factor market integration for fiscal policy in the countries of the EU and for the EU itself. It draws particular attention to the dynamic dimensions of factor…