Does intense tax competition boost public acceptance for inter-municipal cooperation? Evidence from a survey among German citizens and local politicians

Figures & data

Table 1. Descriptive statistics for involved German municipalities.

Variable	Observations	Mean	Std. dev.	Min	Max
Population size	59	7234.22	5199.837	635	27353
Fiscal capacity	59	531.4431	250.9118	0.07283	1022.589
Debt per capita	59	1.180851	0.906282	0.112	5.1194
Tax base per capita	59	58.47644	58.23728	4.72441	411.3991

Table 2. Main survey question and responses by local politicians and citizens.

What do you think? How intensively should your municipality cooperate with other municipalities?
In establishing and operating business parks, my municipality should …	Frequencies in percent
	Local politicians	Citizens
cooperate with one or more of the surrounding municipalities	63	65
only cooperate in attracting new firms (no joint business parks)	25	17
not cooperate at all	6	7
do not know	6	11

Table 3. Support for close IMC among local politicians and citizens (in percent).

Field	Local politicians	Citizens
business parks	63	65
public administration	55	49
construction yards	51	59
household-oriented infrastructure	33	42

Table 4. Results from the weighted multi-level logit regression models for citizens.

s t a n d a r d s p e c i f i c a t i o n					c l u s t e r s p e c i f i c a t i o n
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Variables	business parks	public admin- istration	construction yard	household- oriented infrastructure	business parks	public admin- istration	construction yard	household- oriented infrastructure
Municipal-level variables
business tax rate (log)	−12.34**	−4.444	2.630	1.079	−11.41**	−3.506	2.806	0.866
	(5.215)	(5.850)	(4.732)	(3.381)	(4.758)	(5.263)	(4.597)	(3.405)
land tax rate (log)	−0.393	0.305	−0.335	0.607	−1.221	−0.682	−1.150	0.874
	(1.845)	(2.492)	(2.215)	(2.024)	(1.972)	(2.463)	(2.117)	(1.948)
spatial lag business tax rate (log)					−0.524	−2.236	−5.576	0.837
					(8.783)	(9.675)	(7.130)	(7.024)
spatial lag land tax rate (log)					3.033	3.696	3.335	−1.014
					(2.618)	(2.493)	(2.991)	(2.690)
debt per capita (log)	0.660	0.291	−0.0135	0.162	0.564	0.227	0.0586	0.171
	(0.417)	(0.362)	(0.303)	(0.283)	(0.422)	(0.488)	(0.355)	(0.304)
fiscal capacity (log)	−0.159	−0.0914	0.0779	0.0291	−0.156	−0.0918	0.0699	0.0296
	(0.105)	(0.0741)	(0.0871)	(0.0640)	(0.103)	(0.0709)	(0.0854)	(0.0621)
tax base per capita (log)	−0.100	−0.458	−0.0709	−0.0254	−0.0867	−0.443	−0.0595	−0.0295
	(0.304)	(0.326)	(0.552)	(0.257)	(0.306)	(0.326)	(0.557)	(0.254)
share large firms	0.0629**	0.0291	−0.0116	−0.0308*	0.0685***	0.0383	0.00222	−0.0337
	(0.0246)	(0.0306)	(0.0233)	(0.0181)	(0.0236)	(0.0275)	(0.0230)	(0.0207)
motorway access	0.232	0.453	−0.277	−0.0662	0.128	0.360	−0.288	−0.0456
	(0.637)	(0.501)	(0.425)	(0.465)	(0.605)	(0.520)	(0.481)	(0.490)
share farm land	0.0291	0.0301	−0.0133	0.0182	0.0370	0.0362	−0.0162	0.0171
	(0.0280)	(0.0228)	(0.0249)	(0.0202)	(0.0327)	(0.0283)	(0.0293)	(0.0250)
population size (log)	1.040***	0.253	0.0696	0.563	1.142***	0.371	0.170	0.531
	(0.357)	(0.407)	(0.569)	(0.352)	(0.363)	(0.406)	(0.543)	(0.336)
no. larger neighbors	−0.164	0.0189	−0.352	0.262	−0.146	0.0505	−0.299	0.251
	(0.212)	(0.273)	(0.342)	(0.208)	(0.173)	(0.236)	(0.336)	(0.205)
no. neighbors same mayors party	0.314**	−0.0324	0.0588	−0.130**	0.298**	−0.0417	0.0805	−0.130
	(0.125)	(0.0867)	(0.0977)	(0.0604)	(0.146)	(0.117)	(0.117)	(0.0858)
turnout	0.0654*	−0.0136	0.00137	−0.0240	0.0710*	−0.00717	0.00595	−0.0256
	(0.0366)	(0.0491)	(0.0492)	(0.0468)	(0.0379)	(0.0474)	(0.0510)	(0.0438)
Individual-level variables
residential property	0.801**	−0.0538	0.758*	0.0113	0.801**	−0.0541	0.758*	0.0114
	(0.367)	(0.442)	(0.436)	(0.298)	(0.367)	(0.442)	(0.436)	(0.298)
female	0.00417	0.0347	0.00719	−0.354	0.00406	0.0347	0.00723	−0.354
	(0.255)	(0.274)	(0.253)	(0.281)	(0.254)	(0.273)	(0.253)	(0.281)
age (log)	−1.601***	1.272***	−0.0703	0.808	−1.601***	1.272***	−0.0703	0.808
	(0.524)	(0.452)	(0.527)	(0.584)	(0.524)	(0.452)	(0.527)	(0.584)
high education	−0.0568	0.640**	0.441*	0.805***	−0.0568	0.640**	0.441*	0.805***
	(0.272)	(0.255)	(0.239)	(0.247)	(0.272)	(0.255)	(0.239)	(0.247)
household income	0.331	0.678**	0.174	−0.296	0.331	0.679**	0.175	−0.296
	(0.295)	(0.321)	(0.282)	(0.249)	(0.295)	(0.321)	(0.282)	(0.250)
active	−0.376	−0.610*	−0.664**	−0.637**	−0.377	−0.610*	−0.664**	−0.637**
	(0.286)	(0.333)	(0.286)	(0.300)	(0.286)	(0.333)	(0.286)	(0.300)
trust local politics	−0.366	−0.479*	−0.512**	−0.287	−0.366	−0.479*	−0.512**	−0.287
	(0.255)	(0.268)	(0.209)	(0.218)	(0.255)	(0.268)	(0.209)	(0.218)
IMC positive effect	1.009***	1.603***	1.322***	1.322***	1.009***	1.603***	1.323***	1.322***
	(0.352)	(0.316)	(0.260)	(0.269)	(0.352)	(0.316)	(0.260)	(0.269)
IMC reduce influence	−0.456	−2.009***	−1.399***	−1.506***	−0.457	−2.010***	−1.400***	−1.505***
	(0.407)	(0.623)	(0.389)	(0.370)	(0.407)	(0.623)	(0.389)	(0.370)
Constant	63.33**	11.89	−14.02	−15.25	46.02	1.592	1.874	−14.02
	(25.57)	(24.28)	(23.72)	(15.10)	(46.99)	(49.82)	(44.30)	(39.77)
Variance of random intercept	2.175***	2.495**	2.249***	1.362***	2.117**	2.402**	2.196***	1.358***
	(0.835)	(0.970)	(0.634)	(0.358)	(0.837)	(0.992)	(0.611)	(0.352)
Observations	999	997	997	997	999	997	997	997
Number of groups	58	58	58	58	58	58	58	58
Random intercept	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Random slope	No	No	No	No	No	No	No	No
Robust standard errors in parentheses

***p < 0.01, **p < 0.05, *p < 0.1.

Table 5. Results from the weighted multi-level logit regression models for local politicians.

s t a n d a r d s p e c i f i c a t i o n					c l u s t e r s p e c i f i c a t i o n
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Variables	business parks	public admin- istration	construction yard	household- oriented infrastructure	business parks	public admin- istration	construction yard	household- oriented infrastructure
Municipal-level variables
business tax rate (log)	3.113	−4.077	−2.156	−1.770	1.180	−5.093*	−1.901	−2.700
	(3.858)	(3.101)	(3.576)	(2.758)	(3.872)	(3.096)	(3.666)	(2.826)
land tax rate (log)	−2.925	2.939*	1.612	1.974	−2.259	2.911	0.940	2.339
	(2.116)	(1.787)	(2.030)	(1.532)	(2.151)	(1.832)	(2.135)	(1.586)
spatial lag business tax rate (log)					−10.42	−11.69**	−4.509	−6.943
					(6.692)	(5.716)	(6.599)	(5.031)
spatial lag land tax rate (log)					−0.667	1.900	2.858	−0.159
					(2.580)	(2.110)	(2.541)	(1.866)
share large firms	0.0781***	0.0396**	0.0227	−0.0166	0.0933***	0.0638***	0.0355	−0.00503
	(0.0226)	(0.0181)	(0.0208)	(0.0155)	(0.0258)	(0.0215)	(0.0251)	(0.0188)
motorway access	−0.262	−0.0105	0.0864	−0.529	−0.0747	0.0927	0.0701	−0.438
	(0.663)	(0.529)	(0.610)	(0.467)	(0.652)	(0.516)	(0.617)	(0.468)
share farm land	0.0482*	0.0367*	0.0150	0.0254	0.0216	0.0177	0.0144	0.0103
	(0.0272)	(0.0222)	(0.0253)	(0.0191)	(0.0295)	(0.0240)	(0.0284)	(0.0211)
population size (log)	0.327	0.512	0.489	0.00447	0.332	0.605	0.567	0.0298
	(0.446)	(0.381)	(0.426)	(0.345)	(0.445)	(0.378)	(0.433)	(0.352)
no. larger neighbors	−0.853***	−0.166	−0.108	−0.196	−0.763***	−0.0836	−0.0719	−0.160
	(0.294)	(0.228)	(0.269)	(0.230)	(0.289)	(0.223)	(0.273)	(0.230)
debt per capita (log)	0.639*	0.335	0.577*	0.123	1.015**	0.640**	0.627	0.366
	(0.351)	(0.286)	(0.337)	(0.253)	(0.399)	(0.318)	(0.396)	(0.296)
fiscal capacity (log)	−0.159*	0.000411	−0.0724	−0.0251	−0.169**	−0.0115	−0.0793	−0.0353
	(0.0850)	(0.0700)	(0.0810)	(0.0578)	(0.0831)	(0.0680)	(0.0817)	(0.0581)
tax base per capita (log)	0.178	−0.189	−0.339	−0.0598	0.163	−0.195	−0.329	−0.0788
	(0.423)	(0.346)	(0.409)	(0.310)	(0.412)	(0.335)	(0.410)	(0.309)
no. neighbors same mayors party	0.370***	0.0422	−0.0232	−0.0202	0.448***	0.128	−0.00689	0.0369
	(0.118)	(0.0908)	(0.102)	(0.0758)	(0.123)	(0.0976)	(0.112)	(0.0836)
turnout	0.0582*	−0.0264	−0.0301	−0.0574**	0.0547	−0.0235	−0.0268	−0.0588**
	(0.0342)	(0.0279)	(0.0321)	(0.0252)	(0.0334)	(0.0271)	(0.0321)	(0.0255)
Individual-level variables
residential property	0.540	−0.159	−0.520	−0.146	0.589	−0.123	−0.532	−0.111
	(0.421)	(0.401)	(0.423)	(0.397)	(0.422)	(0.400)	(0.424)	(0.396)
female	−0.452	−0.633**	−0.378	0.239	−0.452	−0.606**	−0.366	0.252
	(0.317)	(0.290)	(0.296)	(0.290)	(0.317)	(0.289)	(0.297)	(0.290)
age (log)	0.0629	0.324	−0.976*	0.251	−0.00151	0.357	−0.918	0.208
	(0.613)	(0.550)	(0.593)	(0.557)	(0.617)	(0.551)	(0.598)	(0.560)
high education	0.0305	0.311	0.598**	0.902***	0.0154	0.298	0.598**	0.892***
	(0.281)	(0.263)	(0.272)	(0.263)	(0.281)	(0.261)	(0.272)	(0.263)
household income	−0.186	0.222	0.123	0.102	−0.197	0.231	0.131	0.105
	(0.272)	(0.243)	(0.252)	(0.245)	(0.272)	(0.241)	(0.252)	(0.245)
active	−1.358**	0.364	0.398	0.173	−1.355**	0.328	0.375	0.166
	(0.656)	(0.501)	(0.508)	(0.481)	(0.660)	(0.503)	(0.509)	(0.484)
trust local politics	−0.0955	0.302	0.464	0.361	−0.0601	0.358	0.476	0.414
	(0.334)	(0.325)	(0.335)	(0.313)	(0.335)	(0.325)	(0.336)	(0.315)
IMC positive effect	0.537*	0.824***	0.817***	0.447*	0.560*	0.836***	0.825***	0.465*
	(0.287)	(0.262)	(0.265)	(0.251)	(0.288)	(0.262)	(0.265)	(0.251)
IMC reduce influence	−0.0730	−1.374***	−0.541	−1.552**	−0.0560	−1.358***	−0.547	−1.500**
	(0.526)	(0.506)	(0.519)	(0.708)	(0.528)	(0.506)	(0.522)	(0.706)
belongs mayor’s fraction	0.459	−0.841***	−0.783**	−0.305	0.481	−0.844***	−0.807**	−0.286
	(0.340)	(0.319)	(0.332)	(0.317)	(0.339)	(0.317)	(0.333)	(0.318)
go for office	−0.784***	−0.124	−0.0843	0.0990	−0.787***	−0.112	−0.0736	0.0901
	(0.297)	(0.267)	(0.277)	(0.268)	(0.297)	(0.267)	(0.278)	(0.269)
position in council	0.259	0.374	0.411	0.0868	0.248	0.353	0.404	0.0786
	(0.268)	(0.250)	(0.256)	(0.253)	(0.267)	(0.250)	(0.256)	(0.253)
years of office	−0.0289	0.00905	−0.0131	−0.0150	−0.0299*	0.00757	−0.0127	−0.0164
	(0.0177)	(0.0169)	(0.0174)	(0.0177)	(0.0177)	(0.0169)	(0.0174)	(0.0178)
IMC loss power	0.141	0.971***	0.790***	1.094***	0.154	1.009***	0.808***	1.120***
	(0.281)	(0.267)	(0.273)	(0.260)	(0.280)	(0.268)	(0.274)	(0.261)
Constant	−10.66	−2.791	2.930	−2.818	64.53	61.03*	13.85	43.41
	(19.69)	(15.93)	(18.43)	(14.26)	(44.14)	(36.58)	(43.29)	(32.75)
Variance of random intercept	0.908**	0.453*	0.811**	0.155	0.814**	0.367	0.800**	0.142
	(0.404)	(0.249)	(0.384)	(0.188)	(0.377)	(0.228)	(0.378)	(0.178)
Observations	460	467	462	461	460	467	462	461
Number of groups	58	58	58	58	58	58	58	58
Random intercept	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Random slope	No	No	No	No	No	No	No	No
Party fixed effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Standard errors in parentheses

***p < 0.01, **p < 0.05, *p < 0.1.