The work underlines the consequences of the globalisation on the tax competition among different jurisdictions on goods. It is highlighted that the principal consequence of the globalisation on the possible goods trans-borders flow renders the problem of tax competition in this sector similar to the one that concerns the capitals. Taken into account the complexity of the interrelations among the different phenomena that incises on the scenarios in which the tax competition is operating, the work begins with a review of the literature that underlines the contributions most meaningful with respect to: a) the effects of globalisation on the flows of goods and capital; b) the principles on which international fiscality of goods and capital are based; c) the effects of cross-border flows on the total revenue and /or on the welfare function; d) the applications of Game Theory to tax competition; e) the repeated games applied in this sector, both those that endogenise the behavioural variable (like savings) and those that endogenise the strategic variables (like public debt, the level of public expenditure or that of consumption) that lead to the evolutionary approaches if the ability of learning of the institutions is supposed. Then, according to the approach of the game theory in condition of open borders an interpretative model of the tax competition is proposed. It is shown that the hypothesis of different size countries, used by many authors, is misleading if we consider more then two countries in condition of open borders. Besides it is underlined, that in the case of globalisation the characteristics of the trans-borders market in open borders result so much similar to those of the international capital flows that the interpretative models of optimal international tax competitions of the two phenomena have the tendency to coincide. On this base, in open borders, the hypothesis of application of a scheme of the type "Prisoner's dilemma", usually adopted for the TC in the capital sector, also seems applicable to the goods market. In literature it is underlined that the attainable results change according if the model is one of single or repeated games. It seems therefore necessary to use models of repeated games and evolutionary approaches. This is based on two considerations: the opportunity to endogenize the strategic behaviour - that is the choice of the strategies of interrelation among the countries - and the fact that in reality the countries modify or they can constantly modify their fiscality. In fact, every day, countries compare each other on the markets. Necessity is underlined to consider repeated and evolutionary games and the possibility that non single equilibria are reached. Base of departure of the model has been the contribution of Kabur and Keen, subsequently modified to the purpose consider explicitly the problems leveraged by globalisation and by situations of open borders among more than two countries. The used methodology takes into account what affirmed by Holland about the opportunity to make use of simulations in the case of self-adaptive complex systems. Our study will be focused on cross-border movement of capital and goods. In fact, their the effect of globalisation on these tax bases might be similar. The significance of our choice seems not to be marginal. As an example, we could cite the fact that if the Cnossen’s estimate in 1990, that the 15% of European population was interested in cross border shopping, we are now dealing at least with an involved population, perhaps, of more than 20 %.

Tax competition in an open border scenario: An Evolutionary Game approach.

ALFANO, Maria Rosaria;
2000

Abstract

The work underlines the consequences of the globalisation on the tax competition among different jurisdictions on goods. It is highlighted that the principal consequence of the globalisation on the possible goods trans-borders flow renders the problem of tax competition in this sector similar to the one that concerns the capitals. Taken into account the complexity of the interrelations among the different phenomena that incises on the scenarios in which the tax competition is operating, the work begins with a review of the literature that underlines the contributions most meaningful with respect to: a) the effects of globalisation on the flows of goods and capital; b) the principles on which international fiscality of goods and capital are based; c) the effects of cross-border flows on the total revenue and /or on the welfare function; d) the applications of Game Theory to tax competition; e) the repeated games applied in this sector, both those that endogenise the behavioural variable (like savings) and those that endogenise the strategic variables (like public debt, the level of public expenditure or that of consumption) that lead to the evolutionary approaches if the ability of learning of the institutions is supposed. Then, according to the approach of the game theory in condition of open borders an interpretative model of the tax competition is proposed. It is shown that the hypothesis of different size countries, used by many authors, is misleading if we consider more then two countries in condition of open borders. Besides it is underlined, that in the case of globalisation the characteristics of the trans-borders market in open borders result so much similar to those of the international capital flows that the interpretative models of optimal international tax competitions of the two phenomena have the tendency to coincide. On this base, in open borders, the hypothesis of application of a scheme of the type "Prisoner's dilemma", usually adopted for the TC in the capital sector, also seems applicable to the goods market. In literature it is underlined that the attainable results change according if the model is one of single or repeated games. It seems therefore necessary to use models of repeated games and evolutionary approaches. This is based on two considerations: the opportunity to endogenize the strategic behaviour - that is the choice of the strategies of interrelation among the countries - and the fact that in reality the countries modify or they can constantly modify their fiscality. In fact, every day, countries compare each other on the markets. Necessity is underlined to consider repeated and evolutionary games and the possibility that non single equilibria are reached. Base of departure of the model has been the contribution of Kabur and Keen, subsequently modified to the purpose consider explicitly the problems leveraged by globalisation and by situations of open borders among more than two countries. The used methodology takes into account what affirmed by Holland about the opportunity to make use of simulations in the case of self-adaptive complex systems. Our study will be focused on cross-border movement of capital and goods. In fact, their the effect of globalisation on these tax bases might be similar. The significance of our choice seems not to be marginal. As an example, we could cite the fact that if the Cnossen’s estimate in 1990, that the 15% of European population was interested in cross border shopping, we are now dealing at least with an involved population, perhaps, of more than 20 %.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11591/159388
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