Purism and Contextualism within International Tax Law Analysis: How Traditional Analysis Fails Developing Countries

Arthur Cockfield

Taxation from ATAX, University of New South Wales

Abstract: There are two broad approaches to the study of international tax law. Purists adopt a traditional approach, emphasizing conceptually pure tax solutions based on efficiency interests. Contextualists combine economic analysis with political, historical, social, institutional and other perspectives. It is argued that the Purist approach is overly-reliant on international tax economics which, in turn, is challenged by significant theoretical, empirical, and behavioral uncertainty. The Purist analysis nevertheless can be effective in respect of situations in which there are relatively balanced capital flows between countries with developed economies. Developing countries, however, are generally capital importing nations and their interests tend to be downplayed under the Purist approach. In an increasingly integrated global economy, the Contextualist perspective is more effective at taking account of the interests and needs of developing countries and, in so doing, promotes the long-term economic and security interests of developed countries.

Keywords: international tax law; purism; contextualism; developing countries (search for similar items in EconPapers)
Pages: 26 pages
Date: 2008-01-07
New Economics Papers: this item is included in nep-cwa
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