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Tax policies in Europe

Contact University of Mannheim for this project

Prof. Eckhard Janeba
Department of Economics
University of Mannheim
L7 - 3-5
68131 Mannheim
janeba@uni-mannheim.de Phone: +49 621 181 1795

University of Mannheim
My areas of interest are in public economics and international economics broadly defined. In particular, I am interested in the intersection of the two areas. My early and continuing research deals with the effects of the worldwide integration of capital markets on government activity. While some fear that increasing international capital mobility leads to a race to the bottom, and thus less government services, others believe the opposite. One important objective of my research is to identify conditions and environments under which each of these views holds.

In more recent work I emphasize the role of the political process and different political institutions. Globalization typically generates winners and losers within countries. Therefore it is important to understand and model the political process that shapes the government response to globalization. For example, government revenues can be used for attracting foreign direct investment or for redistribution or for subsidizing investment in education. How the money is spent is politically determined. In this context an interesting line of research deals with comparison of institutional structures. Presidential-congressional democracies may respond in a different way than parliamentary regimes to the challenges of globalization.

In most recent work I have used survey information from German politicians in national parliament to study individual views on tax policy. In contrast to existing literature the perceived efficiency cost of taxation in open economies are strongly influenced by ideology in the form of party membership. This effect is highly significant and dominates quantitatively other factors such as number of years in parliament, type of parliamentary committee membership, age and others.

Relevance to future of European societies
Taxation is a central area of concern to European society and policymakers because fiscal revenues are necessary to fund welfare state expenditures among other things. As argued above, it is an important question what the effects of competitive tax policies in Europe are and how we should evaluate such outcomes from a normative perspective.

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