The Dynamics of Global Economic Governance

The Dynamics of Global Economic Governance

The Financial Crisis, the OECD, and the Politics of International Tax Cooperation

Richard Eccleston

This book focuses on international taxation and examines how the financial crisis prompted renewed attempts to enhance international tax transparency and confront tax havens. It highlights the complexity of international regime change and the significance of national and financial interests, international organizations, domestic politics and the emerging G20 leaders forum in this process.

Chapter 6: Beyond the financial crisis: regime implementation and effectiveness

Richard Eccleston

Subjects: economics and finance, political economy, politics and public policy, political economy, regulation and governance

Extract

The Organisation for Economic Cooperation and Development claims to have presided over a ‘revolution’ in tax transparency since the financial crisis. We have noted that the sheer number of tax information agreements negotiated since 2007 broadly supports such claims. Yet the more important question is whether the enhanced legal structures for tax information exchange combined with the unilateral measures described in previous chapters have had a significant impact on international tax evasion? It is particularly important to focus on the implementation and efficacy of the evolving international tax regime owing to widely held theoretical and practical concerns (Meinzer 2012). The implementation and enforcement of international agreements is the least researched yet arguably the most important aspect of global economic governance, with the established literature suggesting that implementation has long been regarded as the Achilles heel of global governance (Young 1999; Keohane 2001; Joachim et al. 2008). Liberal institutionalists and realists alike highlight both the lack of incentives to comply with international agreements and the ability of powerful domestic interests to persuade national governments to ignore their international commitments (North 1990; Raustiala and Victor 2004). While recent research in the sociological tradition is more optimistic in arguing that international engagement and deliberation through forums such as the OECD can promote compliance through persuasion, there is also a good deal of evidence to the contrary (Barnett and Finnemore 2004).

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