Regional competition, business politicians, and subnational fiscal policy
(2018) In Business and Politics 20(3). p.410-437- Abstract
- What explains subnational policy choices over tax cut after decentralization? We test two different explanations in the context of the 2002 tax reform in Russia. A popular strand of literature suggests that decentralization induces more regional competition over investment, motivating subnational tax cuts. A second body of literature suggests that personal business interests of regional governors can account for their different policy choices. Governors with personal business ties refrain from tax cuts because they increase market competition. We find no support for the regional competition hypothesis, but strong statistical evidence for the business connection hypothesis. Our findings have important implications for research on fiscal... (More)
- What explains subnational policy choices over tax cut after decentralization? We test two different explanations in the context of the 2002 tax reform in Russia. A popular strand of literature suggests that decentralization induces more regional competition over investment, motivating subnational tax cuts. A second body of literature suggests that personal business interests of regional governors can account for their different policy choices. Governors with personal business ties refrain from tax cuts because they increase market competition. We find no support for the regional competition hypothesis, but strong statistical evidence for the business connection hypothesis. Our findings have important implications for research on fiscal decentralization and on the connections between business interests of leaders and their policy choices. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/27ce226c-8ed2-48f4-81e3-75e722fd126e
- author
- Baccini, Leonardo ; Li, Quan ; Mirkina, Irina LU and Johnson, Kristina
- organization
- publishing date
- 2018
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Fiscal Policy, Decentralisation, Russia
- in
- Business and Politics
- volume
- 20
- issue
- 3
- pages
- 410 - 437
- publisher
- Cambridge University Press
- external identifiers
-
- scopus:85051062107
- ISSN
- 1369-5258
- DOI
- 10.1017/bap.2018.3
- language
- English
- LU publication?
- yes
- id
- 27ce226c-8ed2-48f4-81e3-75e722fd126e
- date added to LUP
- 2018-07-05 16:38:38
- date last changed
- 2022-04-25 08:13:18
@article{27ce226c-8ed2-48f4-81e3-75e722fd126e,
abstract = {{What explains subnational policy choices over tax cut after decentralization? We test two different explanations in the context of the 2002 tax reform in Russia. A popular strand of literature suggests that decentralization induces more regional competition over investment, motivating subnational tax cuts. A second body of literature suggests that personal business interests of regional governors can account for their different policy choices. Governors with personal business ties refrain from tax cuts because they increase market competition. We find no support for the regional competition hypothesis, but strong statistical evidence for the business connection hypothesis. Our findings have important implications for research on fiscal decentralization and on the connections between business interests of leaders and their policy choices.}},
author = {{Baccini, Leonardo and Li, Quan and Mirkina, Irina and Johnson, Kristina}},
issn = {{1369-5258}},
keywords = {{Fiscal Policy; Decentralisation; Russia}},
language = {{eng}},
number = {{3}},
pages = {{410--437}},
publisher = {{Cambridge University Press}},
series = {{Business and Politics}},
title = {{Regional competition, business politicians, and subnational fiscal policy}},
url = {{http://dx.doi.org/10.1017/bap.2018.3}},
doi = {{10.1017/bap.2018.3}},
volume = {{20}},
year = {{2018}},
}