Dictators don't compete: autocracy, democracy, and tax competition
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In: Review of International Political Economy, Vol. 23, No. 2, 03.03.2016, p. 290-315.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - Dictators don't compete
T2 - autocracy, democracy, and tax competition
AU - Genschel, Philipp
AU - Lierse, Hanna
AU - Seelkopf, Laura
PY - 2016/3/3
Y1 - 2016/3/3
N2 - 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.
AB - 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.
KW - autocracy
KW - corporate Taxation
KW - democracy
KW - globalization
KW - tax Competition
KW - tax policy-making
KW - Sustainability sciences, Management & Economics
UR - http://www.scopus.com/inward/record.url?scp=84964555622&partnerID=8YFLogxK
U2 - 10.1080/09692290.2016.1152995
DO - 10.1080/09692290.2016.1152995
M3 - Journal articles
AN - SCOPUS:84964555622
VL - 23
SP - 290
EP - 315
JO - Review of International Political Economy
JF - Review of International Political Economy
SN - 0969-2290
IS - 2
ER -