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Migration and the Welfare StatePolitical-Economy Policy Formation$
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Assaf Razin, Efraim Sadka, and Benjarong Suwankiri

Print publication date: 2011

Print ISBN-13: 9780262016100

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262016100.001.0001

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Tax-Transfer: Competition and Coordination among Host Countries

Tax-Transfer: Competition and Coordination among Host Countries

(p.137) 10 Tax-Transfer: Competition and Coordination among Host Countries
Migration and the Welfare State

Assaf Razin

Efraim Sadka

Benjarong Suwankiri

The MIT Press

This chapter discusses tax-transfer-related competition and coordination between host countries, revealing that tax-transfer competition models in host countries are based on a system of collective decision-making. The analysis of tax-transfer competition is based on the assumption of free migration, with an increased number of migrants of different skill types to the host countries. The number of such migrants increases with the level of benefits derived from the host countries. Another trend is that migrants disregard preference for any specific host country. When migrating to a country, migrants only emphasize the level of utility and benefits to be enjoyed in a host country. Host countries also need to coordinate respective fiscal policies to maximize the utility for the decisive voter.

Keywords:   tax transfer, host country, fiscal policy

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