The Influence of globalization on taxes and social policy - an empirical enalysis for OECD countries

Axel Dreher

No 301, Discussion Papers from University of Exeter, Department of Economics

Abstract: Using panel regression for the period 1970-2000 the paper analyzes whether globalization has influenced the OECD countries' social and overall spending as well as their implicit tax rates on labor, consumption and capital. Accounting for potential endogeneity of the regressors, the results show that globalization (measured by an index covering 23 variables) did not decrease the leeway for independent economic policy. Globalization even increased implicit tax rates on capital – a result that is mainly driven by economic integration. Depending on the method of estimation, increasing social integration also plays a role, while political integration does not matter for economic policy.

Keywords: globalization; economic policy; government expenditure; social spending; implicit tax rates; dynamic panel (search for similar items in EconPapers)
JEL-codes: C23 H7 H87 (search for similar items in EconPapers)
Date: 2003-09
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The influence of globalization on taxes and social policy: An empirical analysis for OECD countries (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:0301

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