Globalization, Taxation, and Burden-Shifting in Latin America

Abstract

Most researchers interested in the relationship between global markets and public policy focus on advanced industrial democracies. In contrast, we examine competing hypotheses as to globalization's effect on governments by expanding the scope of the discussion to include developing nations. More specifically, we investigate the relationship between international market integration and the evolving burden of taxation on capital, as well as the subsequent response of markets to shifts in tax policy in Latin America since the late 1970s. Consistent with our theoretical expectations, we find that global market forces are more constraining vis-à-vis tax policy in Latin America than in the world's wealthiest nations. Despite these market-based pressures, however, national politics continue to influence tax policy in Latin America in a manner consistent with findings on advanced industrial democracies. As such, developing nations continue to have some room to manipulate policy, though within the context of a more strictly neoliberal context than their counterparts in advanced industrial democracies.

Why Don’t We Tax the Rich? Inequality, Legislative Malapportionment, and Personal Income Taxation Around the World

“…3 However, contrary to these expectations, the empirical evidence shows that democratization has not been accompanied by large increases in income taxation across the region (Wibbels and Arce, 2007;Profeta and Scabrosseti, 2010). On the contrary, indirect taxes, which do not necessarily fall more heavily on the rich, have gained even more momentum in spite of substantial increases in democratic scores across the region over time.…”

Political Mandate and Clarity of Responsibility: Economic Policies under Rightist Governments in Latin America

“…The boom in industries and commodities tied to production for the global market, along with the collapse of most firms geared toward ISI since the late 1980s, has generated greater export-oriented influence in domestic labor markets (Murillo 2000;Wibbels and Arce 2003). Because of their increasing influence, export-oriented interests are successful in lobbying politicians, who, in turn, support more extensive, market-oriented reforms (Frieden 1991;Remmer 1998).…”

Integración monetaria y rendición de cuentas en Europa. 1988-1994

“…This, however, presumes that they have to remain in power in order to do so. 5 A number of scholars have argued that increasing market integration has lead states to compete with one another for capital investment, prompting policy convergence and a weakening of the state's productive and redistributive capacity (Wibbels and Arce 2003). Others have questioned such convergence at the global level and have emphasised the persistence of national policies (Pierson 2001, Iversen 2000Boix 1998).…”