The political economy of capital market integration and tax competition

Lai, Yu‐Bong

doi:10.1016/j.ejpoleco.2010.02.001

Cited by 36 publications

(14 citation statements)

References 30 publications

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“…2 2 See Lai (2010) on the political economy of capital market integration and tax competition. Patriotism may prevent a race to the bottom in tax competition because it generates a base of loyal citizens that makes the tax base less elastic with respect to tax rate changes and thus keeps taxes high.…”

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confidence: 99%

The Globalization–Welfare State Nexus Reconsidered

Meinhard

Potrafke

2012

Rev International Economics

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Two hypotheses relate to the globalization-welfare state nexus: the efficiency hypothesis predicts that globalization reduces government sector size and governments' capacity to finance the welfare state. The compensation hypothesis, in contrast, predicts that globalization induces a higher demand for social insurance which results in an extended welfare state. Empirical evidence on the globalization-welfare state nexus is mixed. The evidence is re-examined by investigating a yearly panel dataset of 186 countries for the 1970-2004 period. This paper uses data compiled by the Penn World Tables on government sector size and employs the Konjunkturforschungsstelle (KOF-Swiss Economic Institute) index of globalization. The results show that globalization increased government sectors around the world. Social globalization especially had a positive influence. Globalization-induced effects were stronger in Organisation for Economic Co-operation and Development (OECD) countries. Overall globalization and economic globalization reduced the relative price of government expenditures. These findings suggest that globalization does not jeopardize the welfare state at all.

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confidence: 99%

The Globalization–Welfare State Nexus Reconsidered

Meinhard

Potrafke

2012

Rev International Economics

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“…This is the total number of votes cast (both valid and invalid) divided by the number of names on the voters' register. We constructed this series using data from the International Institute for Democracy and Electoral Assis-15 Some authors have found that that capital mobility might have no effect on tax rates and that it might even increase them (Lai, 2010 andLockwood andMakris, 2006 and references therein). Our hypothesis is that capital controls will shape the magnitude of fiscal interactions.…”

Section: Political Participationmentioning

confidence: 99%

“… Some authors have found that that capital mobility might have no effect on tax rates and that it might even increase them (Lai, and Lockwood and Makris, and references therein). Our hypothesis is that capital controls will shape the magnitude of fiscal interactions.…”

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confidence: 99%

Does Inter‐jurisdictional Competition Engender a “Race to the Bottom”? A Meta‐Regression Analysis

Costa‐Font

De-Albuquerque

Doucouliagos

2015

Economics & Politics

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A growing literature documents the existence of strategic political reactions to public expenditure between rival jurisdictions. These interactions can potentially create a downward expenditure spiral ("race to the bottom") or a rising expenditure spiral ("race to the top"). However, in the course of identifying the existence of such interactions and ascertaining their underlying triggers, the empirical evidence has produced markedly heterogeneous findings. Most of this heterogeneity can be traced back to study design and institutional differences. This article contributes to the literature by applying meta-regression analysis to quantify the magnitude of strategic inter-jurisdictional expenditure interactions, controlling for study, and institutional characteristics. We find several robust results beyond confirming that jurisdictions do engage in strategic expenditure interactions, namely that strategic interactions: (i) are weakening over time, (ii) are stronger among municipalities than among higher levels of government, and (iii) appear to be more influenced from tax competition than yardstick competition, with capital controls and fiscal decentralization shaping the magnitude of fiscal interactions.

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“…It succeeded in analyzing the impacts of globalization on each country. The theory predicts that globalization, in terms of capital market integration, allows countries with higher returns from investment to attract capital from all over the world, resulting in asymmetric effects on individuals with heterogeneities such as the level of skills, employment status, and capital endowments (Gerber & Hewitt, ; Lai, ; Ogawa, Sato, & Tamai, ). However, these studies define workers and households only as rational “individuals”, and they are often assumed to be homogenous within the household.…”

Section: Introductionmentioning

confidence: 99%

Capital market integration and gender inequality

Komura

Ogawa

2019

Review Development Economics

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This study explores the effects of globalization on gender inequality. Specifically, we describe how, in terms of capital market integration, globalization alters the gender gap in wage rates through changes in labor demand for capital‐intensive sectors. Consequently, via changes in the bargaining positions of men and women, globalization leads to opposite effects on the couple's labor supply and fertility decisions in capital‐importing and capital‐exporting countries. Moreover, by considering the properties of the industrial structures of capital‐importing and capital‐exporting countries, we show that globalization induces empirically observed declines in fertility rates throughout the world.

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The political economy of capital market integration and tax competition

Cited by 36 publications

References 30 publications

The Globalization–Welfare State Nexus Reconsidered

The Globalization–Welfare State Nexus Reconsidered

Does Inter‐jurisdictional Competition Engender a “Race to the Bottom”? A Meta‐Regression Analysis

Capital market integration and gender inequality

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