| This paper expands Wooders et al, (2002) to include different assumptions about public goods and political decision making processes. The first model will consider a single public good with both productive benefits to firms and consumptive benefits to citizens. The second model will consider two separate public goods, one with productive benefits and one with consumptive benefits. The third model will consider a single public good with productive and consumptive benefits with the addition of a heterogeneous taste for public goods and a political decision making process in the form of a median voter model. While the first two models yield both 'race to top' and 'race to the bottom outcomes', the median voter yielded the result that where median taste for public goods was greater than mean taste for public goods, tax competition would never be efficient and results in over provision of public goods. |
