The effect of direct democracy on the level and structure of local taxes
We study the effect of direct democracy on local taxation. Our setting is the German federal state of Bavaria, where in 1995 a state-wide reform introduced the possibility to initiate direct democratic legislation into the local government code. Relying on a sample of all Bavarian municipalities ove...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article (Journal) |
| Language: | English |
| Published: |
22 April 2017
|
| In: |
Regional science and urban economics
Year: 2017, Volume: 65, Pages: 38-55 |
| ISSN: | 1879-2308 |
| DOI: | 10.1016/j.regsciurbeco.2017.04.006 |
| Online Access: | Verlag, Volltext: http://dx.doi.org/10.1016/j.regsciurbeco.2017.04.006 Verlag, Volltext: http://www.sciencedirect.com/science/article/pii/S0166046217301357 
|
| Author Notes: | Zareh Asatryan, Thushyanthan Baskaran, Friedrich Heinemann |
| Summary: | We study the effect of direct democracy on local taxation. Our setting is the German federal state of Bavaria, where in 1995 a state-wide reform introduced the possibility to initiate direct democratic legislation into the local government code. Relying on a sample of all Bavarian municipalities over 1980-2011, we hypothesize that complementing a representative form of government with the initiative process leads to (i) higher local tax rates and (ii) a shift of the local tax mix from taxes with broader (property taxes) to taxes with narrower bases (business taxes). For identification, we rely on a difference-in-discontinuity design. Our results suggest that the ease with which local initiatives can be implemented - measured by signature and quorum requirements - increases local tax rates and shift the tax mix toward taxes with narrower bases. |
|---|---|
| Item Description: | Gesehen am 23.07.2018 Available online 22 April 2017 |
| Physical Description: | Online Resource |
| ISSN: | 1879-2308 |
| DOI: | 10.1016/j.regsciurbeco.2017.04.006 |