Incumbent Behavior: Vote Seeking, Tax Setting and Yardstick Competition

44 Pages Posted: 27 Dec 2001 Last revised: 18 Jul 2022

See all articles by Timothy J. Besley

Timothy J. Besley

London School of Economics & Political Science (LSE) - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Anne Case

Princeton University - Research Program in Development Studies; National Bureau of Economic Research (NBER)

Date Written: March 1992

Abstract

This paper presents a theoretical and empirical investigation of tax competition when voters use the tax policy of neighboring jurisdictions as information to evaluate the performance of their incumbent politicians. We show that this has implications both for voter tolerance of high taxes and for the process of tax setting itself, Our empirical results, which use two different tax data sets, confirm the importance of neighbors' taxes both on the probability of incumbent reelection and on tax setting behavior.

Suggested Citation

Besley, Timothy J. and Case, Anne, Incumbent Behavior: Vote Seeking, Tax Setting and Yardstick Competition (March 1992). NBER Working Paper No. w4041, Available at SSRN: https://ssrn.com/abstract=268198

Timothy J. Besley (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 6702 (Phone)
+44 20 7955 6951 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Anne Case

Princeton University - Research Program in Development Studies ( email )

Woodrow Wilson School
345 Wallace Hall
Princeton, NJ 08544
United States
609-258-2177 (Phone)
609-258-5974 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States