Paul L. Caron

Tuesday, August 3, 2021

International Tax Law Between Loyalty, Exit, And Voice

Tarcisio Diniz Magalhaes (Antwerp), International Tax Law Between Loyalty, Exit, and Voice, 44 Dalhousie L.J. 49 (2021):

Discourse on the merits and pitfalls of multilateral cooperation for advancing justice in international tax law have recently re-emerged in the literature. Some tax scholars, even while criticizing global projects like the OECD/G20 initiatives on base erosion, profit shifting and the tax challenges arising from the digitalisation of the economy, insist that cooperative efforts herald a step in the right direction. Others contest the feasibility of international cooperation or its value for developing countries.

Drawing on Albert Hirschman’s oft-cited framework for actor behaviour under institutional malperformance, this article shows that there are three alternatives for those discontented with the status quo: to remain loyal despite disagreeing (cooperation); exit and perhaps form a competing regime (competition); or try to change the existing rules by speaking up (un-cooperation). The article concludes that the interaction of these options (contested cooperation) is an integral part of today’s transnational tax law order.

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