Politics and the diffusion of tax policy

A significant body of work has emerged on the transnational diffusion of tax policy reforms. This literature largely focuses on the degree to which tax policy makers strategically respond to competitors, rationally learn from successful nations, emulate peer nations, or succumb to coercive pressures for policy change from dominant nations or international organizations. More recent research employs new methods to explore how domestic institutions and international and domestic political actors condition competitive responsiveness, learning, and emulation. After an exposition of theory, I survey this literature on tax policy diffusion and find that while there is clear evidence of strategic competition, learning, and emulation in tax policy reform, most policy diffusion is highly conditioned by the domestic institutions and political dynamics of adopting polities. I conclude with a review of promising trends in research on tax policy diffusion that should help us better understand the politics of taxation in the twenty-first century.