Local Policy Effects in the Presence of Regional and Policy Spill-Overs

许多重要的经济决策都有区域因素。当地工资、通勤距离、当地交通和城市生活质量等因素在个人选择居住地和工作地点时起着至关重要的作用。这些因素中有许多又受到地方政策的影响，而地方政策在大多数联邦制国家中很突出。在这些国家，地方政府设定自己的税率或决定当地的基础设施投资，以使他们的城市更具吸引力。此外，许多联邦制国家利用中央政府资助的地区特定补贴，这也影响了特定地点的相对吸引力。以前的研究主要集中在这些地方政策对受影响地区的直接影响。然而，众所周知，地方之间相互竞争，并对邻近司法管辖区的政策选择作出战略性反应。因此，在某一特定地区实施或针对某一特定地区的地方政策很可能也会间接影响到其他据称未参与的地区。在此背景下，本项目的研究目的是实证检验地方政策对其他地区的区域和政治溢出效应。为了做到这一点，德国的机构设置被利用，其中超过11,000个小城市可以独立做出重要的财政决策，如设定税率或增加支出。区域溢出效应的一个普遍前提是经济主体具有流动性。因此，该项目的第一部分将调查个人的流动性。该项目将利用城市营业税税率的变化导致工资下降的压力，分析这种工资压力如何影响工人在工作场所、住所或两者方面的选址决策。在第二部分中，基于地方的政策的影响是研究，这应该引发不同类型的区域溢出效应，因为竞争但最初未受影响的地区应该调整其地方政策，作为未获得补贴的反应。这一机制是用德国的两项地方基础政策来检验的：(i) 1980年代靠近德国内部边界的西德城市Zonenrandgebietsförderung；（ii）统一后针对东德地区的区域经济合作（GRW）。最后，研究了税收竞争引发的溢出效应。该项目旨在通过允许政府设定两种税收工具（这一假设适用于大多数地方政府）来推进税收竞争文献。然后用德国市政当局的数据对理论预测进行测试，这些市政当局可以设定商业和财产税率。

Many important economic decisions have a regional component. Factors like local wages, the commuting distance, local transportation and a city's quality of life play a crucial role when individuals choose the location of their residence and their workplace. Many of these factors are in turn influenced by local policies, which are prominent in most countries that have a federal structure. In those countries, local governments set their own tax rates or decide on local infrastructure investments to make their city more attractive. In addition, many federal countries make use of region-specific subsidies financed by the central government, which also affect the relative attractiveness of a specific location. Previous studies have primarily focused on the direct effects of such local policies on the affected regions. However, it is well known that localities compete against each other and react strategically to policy choices of neighboring jurisdictions. As a result, it is likely that local policies implemented in or targeted at one specific region will indirectly affect other, allegedly uninvolved regions as well. Against this backdrop, the research objective of this project is to empirically test for such regional and political spill-overs of local policies on other regions. In order to do so, the German institutional setting is exploited, where more than 11,000 small municipalities which can independently make important fiscal decisions such as setting tax rates or increasing spending. A general precondition for regional spill-overs is that economic agents are mobile. The first part of the project will, therefore, investigate the mobility of individuals. Exploiting variation in municipal business tax rates that induces downward pressure on wage, the project will analyze how this wage pressure affects the locational decision of workers in terms of workplace, residence or both. In a second part, the effect of place-based policies are studies, which should trigger a different type of regional spill-overs as competing but initially unaffected regions should adjust their local policies as a response to not receiving the subsidy. This mechanism is tested using two German placed-base policies: (i) the Zonenrandgebietsförderung of West German municipalities close to the inner-German border in the 1980s; and (ii) the Gemeinschaftsaufgabe Verbesserung der regionalen Wirtschaftsstruktur (GRW) targeted at East Germany regions after reunification. Last, the project focuses on specific spill-overs effects induced by tax competition. The project intends to advance the tax competition literature by allowing governments to set two tax instruments - an assumption that holds for most local governments. The theoretical predictions are then tested using data on German municipalities, which can set both business and property tax rates.