Norms, Coercion and Contracting in the Struggle against 'Harmful' Tax Competition

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Title Norms, Coercion and Contracting in the Struggle against 'Harmful' Tax Competition
Author Sharman, Jason Campbell
Journal Name Australian Journal of International Affairs
Year Published 2006
Place of publication Canberra
Publisher Taylor and Francis
Abstract The world's richest and most powerful countries have become increasingly concerned about revenue lost to tax havens, and fear that tax competition might spark a fiscal 'race to the bottom', yet they have failed to pressure much smaller and weaker tax haven states into reform. This article argues that the OECD-sponsored campaign against 'harmful' tax competition has been unsuccessful because regulative norms have severely constrained the means legitimately able to be employed. Early decisions on how the campaign was designed subsequently brought norms into play which have not only ruled out the use of coercion, but also the use of side payments, despite the massive potential benefits available to both sides from a deal between tax havens and OECD states. The failure to strike a deal cannot be explained by high transaction costs nor by corporate lobbying in defence of tax shelters. Regulative norms can thus affect economic bargaining in the international arena by preventing mutually advantageous exchanges that are nevertheless regarded as inappropriate.
Peer Reviewed Yes
Published Yes
Publisher URI http://www.informaworld.com/smpp/title~db=all~content=t713404203
Alternative URI http://dx.doi.org/10.1080/10357710500494622
Volume 60
Issue Number 1
Page from 143
Page to 169
ISSN 1035-7718
Date Accessioned 2007-07-10
Language en_AU
Research Centre Centre for Governance and Public Policy
Faculty Griffith Business School
URI http://hdl.handle.net/10072/25325
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1x

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