Resistance in tax and transparency standards: small states’ heterogenous responses to new regulations

Loriana Crasnic

Review of International Political Economy, 2022, vol. 29, issue 1, 255-280

Abstract: In the wake of the financial crisis of 2007–2009, by means of a major Western state-led initiative in tax cooperation designed to eliminate tax evasion in the world, offshore financial centers were required to exchange information on bank accounts, first on request, then automatically. Even though all major offshore financial centers have agreed to the new tax standards, the emerging literature on global tax politics disagrees on their effectiveness. To make sense of these contrasting findings, I argue that we need to shift our focus to the diverse ways that targeted actors have responded to the new standards. I develop a typology of resistance strategies and show why state actors engage in one or the other strategy despite pressure from great powers. New tax treaty data, as well as archival and interview material in the matched cases of the Bahamas and Barbados demonstrate variance in the relationships between governments and the financial industry, and governments and international organizations, which in turn leads to the pursuit of different resistance strategies. Ultimately, by highlighting the heterogeneity of targeted actors’ responses to global standards, the study has important implications for the literature on institutional emergence and design writ large.

Date: 2022
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DOI: 10.1080/09692290.2020.1800504

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