Contextual variation in interdependent policy making: The case of tax competition

Wasserfallen, Fabio (2014). Contextual variation in interdependent policy making: The case of tax competition. European Journal of Political Research, 53(4), pp. 822-839. Wiley 10.1111/1475-6765.12058

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Many studies show that policy makers react to the policy choices made in other jurisdictions, but we still know relatively little about the factors driving interdependent policy making, especially about how context shapes interdependence. Theoretical arguments suggest that contextual factors, such as stable institutions and geographic location, explain variation in interdependence. However, there is a lack of empirical research investigating contextual heterogeneity in interdependent policy making, mainly because it cannot be analysed with standard spatial econometric methods. This article introduces multilevel modeling that allows the study of contextual variation in interdependence and illustrates the method with the analysis of uneven tax competition in Switzerland. The findings of fine‐grained data show that cantonal governments compete more strongly with their competitors the closer a unit is located to a metropolis with comprehensive public good provision. The analysis demonstrates that we can better understand the mechanisms of interdependent policy making by studying its contextual drivers.

Item Type:

Journal Article (Original Article)


03 Faculty of Business, Economics and Social Sciences > Social Sciences > Institute of Political Science

UniBE Contributor:

Wasserfallen, Fabio Adriano


300 Social sciences, sociology & anthropology > 320 Political science






[4] Swiss National Science Foundation




Mirco Thomas Good

Date Deposited:

14 May 2020 14:22

Last Modified:

05 Dec 2022 15:37

Publisher DOI:


Uncontrolled Keywords:

interdependent policy making; tax competition; contextual variation; multilevel modeling




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