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Capital Mobility, Distributive Conflict, and International Tax Coordination

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  • Dani Rodrik
  • Tanguy van Ypersele

Abstract

Basic economic theory identifies a number of efficiency gains that derive from international capital mobility. But just as free trade in goods, there is no guarantee that capital mobility makes everyone better off. Consequently, capital mobility may be politically unsustainable even though it enhances efficiency. This paper discusses how such a dilemma might arise, and suggests that international tax coordination might serve as a way out under some circumstances.

Suggested Citation

  • Dani Rodrik & Tanguy van Ypersele, 1999. "Capital Mobility, Distributive Conflict, and International Tax Coordination," NBER Working Papers 7150, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7150
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    Cited by:

    1. Enrique G. Mendoza & Linda L. Tesar, 2003. "Winners and Losers of Tax Competition in the European Union," NBER Working Papers 10051, National Bureau of Economic Research, Inc.
    2. Pica Giovanni, 2010. "Capital Markets Integration and Labor Market Institutions," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-57, March.
    3. Garcia-Penalosa, Cecilia & Turnovsky, Stephen J., 2005. "Production risk and the functional distribution of income in a developing economy: tradeoffs and policy responses," Journal of Development Economics, Elsevier, vol. 76(1), pages 175-208, February.
    4. Carmen Camacho & Agustín Pérez-Barahona, 2017. "The diffusion of economic activity across space: a new approach," Working Papers halshs-01670532, HAL.
    5. Hadj Fraj, Salma & bouchoucha, Najeh & Maktouf, Samir, 2020. "Political stability and economic growth: the role of exchange rate regime," MPRA Paper 104586, University Library of Munich, Germany.
    6. Christopher Tsoukis & Frederic Tournemaine, 2011. "Social Conflict, Growth And Factor Shares," Metroeconomica, Wiley Blackwell, vol. 62(2), pages 283-304, May.
    7. Mr. Manmohan S. Kumar & Mr. Dennis P. Quinn, 2012. "Globalization and Corporate Taxation," IMF Working Papers 2012/252, International Monetary Fund.
    8. Enrique G. Mendoza & Linda L. Tesar, 2003. "A Quantitative Analysis of Tax Competition v. Tax Coordination under Perfect Capital Mobility," Working Papers 507, Research Seminar in International Economics, University of Michigan.
    9. Georg Hirte & Christian Lessmann, 2014. "Trade, Integration, and Interregional Inequality," CESifo Working Paper Series 4799, CESifo.
    10. Salma Hadj Fraj & Mekki Hamdaoui & Samir Maktouf, 2018. "Governance and economic growth: The role of the exchange rate regime," International Economics, CEPII research center, issue 156, pages 326-364.
    11. Pami Dua & B N Goldar & Smruti Ranjan Behera, 2011. "Foreign Direct Investment and Technology Spillover: An Evaluation Across Different Clusters in India," Working Papers id:4382, eSocialSciences.
    12. Eddy Lee, 2005. "Trade Liberalization and Employment," Working Papers 5, United Nations, Department of Economics and Social Affairs.
    13. Laura Alfaro & Fabio Kanczuk, 2004. "Capital Controls, Risk, and Liberalization Cycles," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 412-434, August.
    14. Garrison Hongyu Song, 2022. "Capital Mobility vs. Labor Mobility:Theory and Implications," International Journal of Economics and Financial Issues, Econjournals, vol. 12(4), pages 47-55, July.
    15. Behera, Smruti Ranjan Behera & Dua, Pami Dua & Goldar, Bishwanath Goldar, 2012. "Technology Spillover of Foreign Direct Investment: An Analysis of Different Clusters in India," MPRA Paper 43840, University Library of Munich, Germany.
    16. Carmen Camacho & Agustín Pérez-Barahona, 2017. "The diffusion of economic activity across space: a new approach," PSE Working Papers halshs-01670532, HAL.
    17. Ivar Kolstad & Arne Wiig & Odd‐Helge Fjeldstad, 2021. "Citizens’ preferences for taxation of internationally mobile corporations: Evidence from Tanzania," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 548-562, May.
    18. Anderson, Edward, 2005. "Openness and inequality in developing countries: A review of theory and recent evidence," World Development, Elsevier, vol. 33(7), pages 1045-1063, July.
    19. Georg Hirte & Christian Lessmann, 2014. "Trade and Interregional Inequality," ERSA conference papers ersa14p304, European Regional Science Association.
    20. Miguel Acosta-Henao & Laura Alfaro & Andrés Fernández, 2020. "Sticky Capital Controls," Working Papers Central Bank of Chile 877, Central Bank of Chile.
    21. Lai, Yu-Bong, 2010. "The political economy of capital market integration and tax competition," European Journal of Political Economy, Elsevier, vol. 26(4), pages 475-487, December.

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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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