Munich Personal RePEc Archive

Yardstick competition and fiscal disparities: an experimental study

Di Liddo, Giuseppe and Morone, Andrea (2017): Yardstick competition and fiscal disparities: an experimental study.

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Abstract

Recent theoretical research suggest that yardstick competition may be biased by the presence of fiscal disparities between local governments and that fiscal equalization may help in correcting this bias. This paper provides an empirical test of these theoretical predictions by means of a laboratory experiment.

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