Claude Ménard and Mary M. Shirley
When New Institutional Economics (NIE) first appeared on the scholarly scene in the early 1970s, it was a transformative movement. NIE aimed to radically alter orthodox economics by showing that institutions are multidimensional and matter in significant ways that can be statistically measured and systematically modeled. In the decades since, thousands of articles and books have pursued this premise and NIE has evolved from an upstart movement to a major influence on researchers in economics, political science, law, management, and sociology. What made New Institutional Economics a radical idea was that it abandoned: [. . .]the standard neoclassical assumptions that individuals have perfect information and unbounded rationality and that transactions are costless and instantaneous. NIE assumes instead that individuals have incomplete information and limited mental capacity and because of this they face uncertainty about unforeseen events and outcomes and incur transaction costs to acquire information. To reduce risk and transaction costs humans create institutions, writing and enforcing constitutions, laws, contracts and regulations – so-called formal institutions – and structuring and inculcating norms of conduct, beliefs and habits of thought and behavior – or informal institutions. (Menard and Shirley, 2005, p. 1)
Edited by Claude Ménard and Mary M. Shirley
Paying a Fair Share?
Edited by Richard Eccleston and Ainsley Elbra
Richard Eccleston and Ainsley Elbra
Economic liberalisation and the rise of MNCs in recent decades have been a double-edged sword. With the exception of the 2008 Financial Crisis and its aftermath, the rise of global capitalism has been a key driver of economic growth and technological innovation, but at the same time has undermined state sovereignty and exacerbated inequality (Mikler 2018). Nowhere has this dualism been more apparent than in the realm of corporate taxation, which has become a prime example of what Martin Wolf (2012) describes as a ‘contemporary tragedy of the global commons’. The ‘tragedy’ is such that MNC tax avoidance is now estimated to deny governments over a quarter of a trillion US dollars per year, and after years of ignoring the issue governments and firms are being forced to act (Clausing 2015; OECD 2015).
Ainsley Elbra and Richard Eccleston
Blatant corporate tax avoidance has attracted the ire of politicians, citizens and consumers the world over in recent years. Since the financial crisis of 2008, international taxation has become a mainstream political issue championed by social justice campaigners and the progressive press the world over. Globally, governments and intergovernmental organisations have announced a range of reforms designed to ensure that MNCs pay their ‘fair share’ of tax, while some of the world’s most powerful and profitable firms have been subjected to multibillion-dollar fines.