Political fragmentation and projected tax revenues: evidence from Flemish municipalities

Arbeitspapier

The level of revenues pocketed by a government during the fiscal year often deviates from that projected by this government in its budget. Despite a flourishing literature on, for example, the technical or procedural determinants of such forecast errors, little is yet known about how political stratagems may affect forecast errors. In the present paper, we analyse whether differences in the level of government fragmentation are useful in explaining local government tax revenue forecast errors – controlling for various other factors. Using data on 242 Flemish municipalities for the period 1992-2002, we find that two-party governments are more optimistic than single-party governments. In contrast to our initial expectations, governments with at least three parties are significantly more careful (or less optimistic) in their revenue projections than single- or twoparty governments.

Show object

• Alternative title: Politische Zersplitterung und erwartete Steuereinnahmen: Empirische Belege aus flämischen Gemeinden
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2007-03

Classification and Topics

• Classification: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; State and Local Budget and Expenditures ; State and Local Government; Intergovernmental Relations: Other
• Subject: Revenue projections ; forecast accuracy ; local taxation ; Flemish municipalities ; government fragmentation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Goeminne, Stijn ; Geys, Benny ; Smolders, Carine
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/51070