【摘要】We show that agglomeration forces can reverse standard international-tax-competition results. Closer integration may result first in a ‘race to the top’ and then a race to the bottom, a result that is consistent with recent empirical work showing that the tax gap between rich and poor nations follows a bell-shaped path (Devereux, Griffith and Klemm 2002). Moreover, split-the-difference tax harmonization can make both nations worse off. This may help explain why tax harmonisation – which is Pareto improving in the standard model – is so difficult in the real world. The key theoretical insight is that agglomeration forces create quasi-rents that can be taxed without inducing delocation. This suggests that the tax game is something subtler than a race to the bottom. Advanced 'core' nations may act like limit-pricing monopolists toward less advanced 'periphery' countries. Since agglomeration rents are a bell-shaped function of the level of integration, the equilibrium tax gap in our tax game is also bell shaped.

【关键词】Economics, Tax harmonization

【文献来源】Richard Baldwin; Paul Krugman. Agglomeration, Integration and Tax Harmonization. European Business Review, 2001, 13(3).