Dictators don't compete : autocracy, democracy, and tax competition
Review of international political economy, 2016, Vol. 23, No. 2, pp. 290-315
GENSCHEL, Philipp, LIERSE, Hanna, SEELKOPF, Laura, Dictators don't compete : autocracy, democracy, and tax competition, Review of international political economy, 2016, Vol. 23, No. 2, pp. 290-315 - https://hdl.handle.net/1814/61497
Retrieved from Cadmus, EUI Research Repository
It pays to be a tax haven. Ireland has become rich that way. Why do not all countries cut their capital taxes to get wealthy? One reason is structural. As the standard model of tax competition explains, small countries gain from competitive tax cuts while large countries suffer. Yet not all small (large) countries have low (high) capital taxes. Why? The reason, we argue, is political. While the standard model assumes governments to be democratic, more than a third of countries worldwide are non-democratic. We explain theoretically why autocracies are less likely to adjust to competitive constraints and test our argument empirically against data on the corporate tax policy of 99 countries from 1999 to 2011.
Cadmus permanent link: https://hdl.handle.net/1814/61497
Full-text via DOI: 10.1080/09692290.2016.1152995
ISSN: 0969-2290; 1466-4526
Publisher: Taylor & Francis (Routledge)
Keyword(s): Autocracy Democracy Globalization Tax Competition Corporate taxation Tax policy-making Foreign Direct-Investment Political-Institutions Developing-Countries Capital Taxation Civil-War Policy Globalization Regimes Authoritarianism Expropriation
Sponsorship and Funder information:
German Science Foundation via the Collaborative Research Center 
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