Rosenzweig Reviews Kysar's The Global Tax Deal And The New International Economic Governance

Adam Rosenzweig (Washington University), Is There Finally a New World (Economic) Order? (JOTWELL) (reviewing Rebecca M. Kysar (Fordham; Google Scholar), The Global Tax Deal and the New International Economic Governance, 77 Tax L. Rev. __ (2024)): 

In 1944 forty-four nations signed an agreement in Bretton Woods, New Hampshire, which laid the foundation for what would become the modern international economic system. The so-called Bretton Woods system was built on the commitments to free and open trade, stable monetary exchange markets, and investments in global public goods. One of the motivating factors underlying the Bretton Woods agreement was to prevent the kind of trade protectionism, isolationism, and hyperinflation that had been seen as some of the geopolitical factors ultimately leading to World War II. While the Bretton Woods agreement itself only lasted until 1971, the commitment to liberalized trade, liquid currency markets, and investments in global public goods continued and came to be known collectively as the “Washington Consensus.”

In recent years, however, cracks have begun to emerge in the Washington Consensus under the stress of the Financial Crisis, the COVID pandemic, and increased protectionism and trade wars. At the same time, the Organization for Economic Cooperation and Development (OECD) began the single most significant overhaul of the global tax regime since its inception through its Base Erosion and Profit Shifting (BEPS) project. Over one hundred and forty countries eventually reached near universal agreement on fifteen separate Action Items fundamentally overhauling the international tax regime. This success stands in stark contrast to the otherwise perceived crumbling of the Washington Consensus. Was this merely another notable example of tax exceptionalism? Or could the success of BEPS serve as a model for revitalizing the Washington Consensus?

Professor Rebecca M. Kysar intervenes in this debate in her new article, The Global Tax Deal and the New International Economic Governance. The underlying premise of the article provides that the success of the BEPS negotiations proves the demise of the Washington Consensus, not its survival. ...

Even the best of articles will include details that some could criticize or specific examples that could be nitpicked. But the article by its own terms recognizes this and attempts to avoid getting caught up in the quicksand of these debates by keeping its focus on the unique perspective of what has actually worked in the real world over the past decade. For this reason, perhaps the best compliment I can give to Kysar’s article is that it may not be the piece of scholarship any one of us may have wanted, but it assuredly is the piece of scholarship we all need.

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