Election Timings under Globalization: A Tax Competition Approach

Abstract

This paper examines how the results of elections in a country are affected by their relative timing. Particularly, I focus on the types of policymakers in terms of capital endowment for the framework of strategic delegation under tax competition. The game is composed of three stages: i) an election is held in the first-mover country and a policymaker is chosen by majority voting; ii) similarly, an election to choose a policymaker is held in the second-mover country; and iii) capital tax rates are simultaneously determined by the policymakers of both countries. As a result, it is indicated that the policymaker elected through voting by citizens in the first-mover country is likely to be less capital-rich, or relatively more left-winged, compared to that in the second-mover country. However, when income disparity within country is sufficiently large, the second-mover country becomes more redistributive.