Public good differentiation and the intensity of tax competition

We show that, in a setting where tax competition promotes efficiency, variation in the extent to which firms can use public goods to reduce costs brings about a reduction in the intensity of tax competition. This in turn brings about a loss of efficiency. In this environment, a ‘minimum tax’ counters the reduction in the intensity of tax competition, thereby enhancing efficiency. ‘Split-the-difference’ tax harmonization also potentially enhances efficiency but would not be agreed upon by governments because it lowers the payoff to at least one of them. This paper also presents an explanation for how traditionally high-tax countries have continued to set taxes at a relatively high rate even as markets have become more integrated

Economic Policy in India: For Economic Stimulus, or for Austerity and Volatility?

The implementation of economic reforms under new economic policies in India was associated with a paradigmatic shift in monetary and fiscal policy. While monetary policies were solely aimed at "price stability" in the neoliberal regime, fiscal policies were characterized by the objective of maintaining "sound finance" and "austerity". Such monetarist principles and measures have also loomed over the global recession. This paper highlights the theoretical fallacies of monetarism and analyzes the consequences of such policy measures in India, particularly during the period of the global recession. Not only did such policies pose constraints on the recovery of output and employment, with adverse impacts on income distribution; but they also failed to achieve their stated goal in terms of price stability. By citing examples from southern Europe and India, this paper concludes that such monetarist policy measures have been responsible for stagnation, with a rise in price volatility and macroeconomic instability in the midst of the global recession

Labour Standards and Labour Migration in the new Europe: Post-communist legacies and perspectives

International audienceThe post-communist New Member States of Eastern Europe have experienced significant forms of labour exploitation, with deterioration in labour standards and the working environment. This is leading to increasing labour force `exit' on a scale not hitherto anticipated. Migrant workers from the Baltic states, paid lower wages and with poorer working conditions, have been at the centre of a number of high-profile labour disputes in the EU-15. This article uses Latvia as a case study in order to discuss the implications of increasing labour migration for the New Member States and for labour standards in the wider EU