IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2203.00618.html
   My bibliography  Save this paper

The resilience of the multirelational structure of geopolitical treaties is critically linked to past colonial world order and offshore fiscal havens

Author

Listed:
  • Pier Luigi Sacco
  • Alex Arenas
  • Manlio De Domenico

Abstract

The governance of the political and economic world order builds on a complex architecture of international treaties at various geographical scales. In a historical phase of high institutional turbulence, assessing the stability of such architecture with respect to the unilateral defection of single countries and to the breakdown of single treaties is important. We carry out this analysis on the whole global architecture and find that the countries with the highest disruption potential are not major world powers (with the exception of Germany and France) but mostly medium-small and micro-countries. Political stability is highly dependent on many former colonial overseas territories that are today part of the global network of fiscal havens, as well as on emerging economies, mostly from South-East Asia. Economic stability depends on medium sized European and African countries. However, single global treaties have surprisingly less disruptive potential, with the major exception of the WTO. These apparently counter-intuitive results highlight the importance to a nonlinear approach to international relations where the complex multilayered architecture of global governance is analyzed using advanced network science techniques. Our results suggest that the potential fragility of the world order seem to be much more directly related to global inequality and fiscal injustice than it is commonly believed, and that the legacy of the colonial world order is still very strong in the current international relations scenario. In particular, vested interests related to tax avoidance seem to have a structural role in the political architecture of global governance

Suggested Citation

  • Pier Luigi Sacco & Alex Arenas & Manlio De Domenico, 2022. "The resilience of the multirelational structure of geopolitical treaties is critically linked to past colonial world order and offshore fiscal havens," Papers 2203.00618, arXiv.org.
  • Handle: RePEc:arx:papers:2203.00618
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2203.00618
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hiroaki Kitano, 2002. "Computational systems biology," Nature, Nature, vol. 420(6912), pages 206-210, November.
    2. Hampton, Mark P. & Christensen, John, 2002. "Offshore Pariahs? Small Island Economies, Tax Havens, and the Re-configuration of Global Finance," World Development, Elsevier, vol. 30(9), pages 1657-1673, September.
    3. Annette Alstadsæter & Niels Johannesen & Gabriel Zucman, 2019. "Tax Evasion and Inequality," American Economic Review, American Economic Association, vol. 109(6), pages 2073-2103, June.
    4. Konrad, Kai A. & Stolper, Tim B.M., 2016. "Coordination and the fight against tax havens," Journal of International Economics, Elsevier, vol. 103(C), pages 96-107.
    5. Niels Johannesen & Gabriel Zucman, 2014. "The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 65-91, February.
    6. Fraser Cameron, 2020. "EU-Asia should defend multilateralism," Asia Europe Journal, Springer, vol. 18(2), pages 217-221, June.
    7. Timothy Besley & Torsten Persson, 2011. "Fragile States And Development Policy," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 371-398, June.
    8. Gabriel Zucman, 2014. "Taxing across Borders: Tracking Personal Wealth and Corporate Profits," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 121-148, Fall.
    9. Daniel Haberly & Dariusz Wójcik, 2015. "Tax havens and the production of offshore FDI: an empirical analysis," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 75-101.
    10. Ali Burak Güven, 2017. "The World Bank and Emerging Powers: Beyond the Multipolarity–Multilateralism Conundrum," New Political Economy, Taylor & Francis Journals, vol. 22(5), pages 496-520, September.
    11. Erin Hannah & James Scott & Rorden Wilkinson, 2018. "The WTO in Buenos Aires: The outcome and its significance for the future of the multilateral trading system," The World Economy, Wiley Blackwell, vol. 41(10), pages 2578-2598, October.
    12. Buscema, Massimo & Ferilli, Guido & Sacco, Pier Luigi, 2017. "What kind of ‘world order’? An artificial neural networks approach to intensive data mining," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 46-56.
    13. Ronen Peter Palan, 2020. "An evolutionary approach to international political economy: the case of corporate tax avoidance," Review of Evolutionary Political Economy, Springer, vol. 1(2), pages 161-182, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Menkhoff, Lukas & Miethe, Jakob, 2019. "Tax evasion in new disguise? Examining tax havens' international bank deposits," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 176, pages 53-78.
    2. Becker, Johannes & Wilson, John D., 2023. "Tax competition with two tax instruments — and tax base erosion," Journal of Public Economics, Elsevier, vol. 225(C).
    3. Vincent Bouvatier & Gunther Capelle-Blancard & Anne-Laure Delatte, 2017. "Banks Defy Gravity in Tax Havens," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03101505, HAL.
    4. Garcia-Bernardo, Javier & Janský, Petr, 2024. "Profit shifting of multinational corporations worldwide," World Development, Elsevier, vol. 177(C).
    5. Agrawal David R. & Foremny Dirk, 2022. "Redistribution In A Globalized World," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 242(5-6), pages 551-567, December.
    6. Marcelo Arbex & Sidney Caetano, 2016. "Welfare Implications of AEoI," Working Papers 1608, University of Windsor, Department of Economics.
    7. Damgaard, Jannick & Elkjaer, Thomas & Johannesen, Niels, 2024. "What is real and what is not in the global FDI network?," Journal of International Money and Finance, Elsevier, vol. 140(C).
    8. Kemme, David M. & Parikh, Bhavik & Steigner, Tanja, 2020. "Tax Morale and International Tax Evasion," Journal of World Business, Elsevier, vol. 55(3).
    9. Krenek Alexander & Schratzenstaller Margit, 2022. "A Harmonized Net Wealth Tax in the European Union," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 242(5-6), pages 629-668, December.
    10. Petr Janský & Miroslav Palanský, 2019. "Estimating the scale of profit shifting and tax revenue losses related to foreign direct investment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(5), pages 1048-1103, October.
    11. Gabriel Zucman, 2019. "Global Wealth Inequality," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 109-138, August.
    12. Fernando, Garcia Alvarado & Antoine, Mandel, 2022. "The network structure of global tax evasion evidence from the Panama papers," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 660-684.
    13. Alstadsæter, Annette & Johannesen, Niels & Zucman, Gabriel, 2018. "Who owns the wealth in tax havens? Macro evidence and implications for global inequality," Journal of Public Economics, Elsevier, vol. 162(C), pages 89-100.
    14. Hebous, Shafik & Johannesen, Niels, 2021. "At your service! The role of tax havens in international trade with services," European Economic Review, Elsevier, vol. 135(C).
    15. Alexander Krenek & Margit Schratzenstaller-Altzinger, 2018. "A European Net Wealth Tax," WIFO Working Papers 561, WIFO.
    16. Hoang Ha Nguyen Thi & Alfons Weichenrieder, 2023. "Tax Haven Welfare and the Crackdown on Secrecy: Evidence from Night Light Emissions," CESifo Working Paper Series 10721, CESifo.
    17. Danuse Nerudova & Veronika Solilova & Marek Litzman & Petr Janský, 2020. "International tax planning within the structure of corporate entities owned by the shareholder‐individuals through Panama Papers destinations," Development Policy Review, Overseas Development Institute, vol. 38(1), pages 124-139, January.
    18. Johannes Becker & John D. Wilson, 2021. "Tax Competition with Two Tax Instruments - and Tax Evasion," CESifo Working Paper Series 9318, CESifo.
    19. James Alm, 2024. "Tax Compliance, Technology, Trust, and Inequality in a Post-Pandemic World," Working Papers 2404, Tulane University, Department of Economics.
    20. Clara Martínez Toledano, 2020. "House Price Cycles, Wealth Inequality and Portfolio Reshuffling," Working Papers hal-02876979, HAL.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2203.00618. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.