Dictators Don’t Compete: Autocracy, Democracy, and Tax Competition. CES Open Forum Series #22 2018-2019

It pays to be a tax haven. Ireland has become rich that way. Why do not all countries follow the Irish example, cut their capital taxes and get wealthy? One reason is structural. As the economic standard model of tax competition explains, small countries gain from competitive tax cuts while large countries suffer. Yet not all small (large) countries have low (high) capital taxes. Why? The reason, we argue, is political. While the economic standard model implicitly assumes competing governments to be democratic, more than a third of countries world-wide are non-democratic. We explain theoretically why autocracies are less likely to adjust to competitive constraints and test our argument empirically against data on the corporate tax policy of 99 countries from 1999 to 2011. Our findings shed light on how domestic institutions and global markets interact in economic policy making

Resources for Sale: Corruption, Democracy and the Natural Resource Curse

A puzzling piece of empirical evidence suggests that resource-abundant countries tend to grow slower than their resource-poor counterparts. We attempt to explain this phenomenon by developing a lobbying game in which rent seeking firms interact with corrupt governments. The presence or absence of political competition, as well as the potential costs of political transitions, turn out to be key elements in generating the `resource curse.¿ These variables define the degree of freedom that incumbent governments have in pursuing development policies that maximize surplus in the lobbying game, but put the economy off its optimal path. We test our predictions by adding measures of democracy and authoritarianism to existing regression models of the resource curse, and obtain support for our hypothese

Money Politics and Good Governance in Nigeria

Going by the events of the fourth republic politics in Nigeria from 1999 till date, it has become apparent that the process of seeking elective positions by politicians and their collaborators(sponsors)has reduced the practice of politicking to mere business investment venture solely for the purpose of profit maximization as epitomized by the Ngige/Uba and Ladoja/Adedibu fiasco, besides several other cases of massive corruption and money laundering that permeates the corridors of power at all levels. These situations speak volume of the kind of leadership the nation has had this past fourteen years as manifested by the increasing state of poverty, inequality and poor living conditions of Nigerians who are yet to savour the benefits of democratization. This paper argued that since the quest for material accumulation and consolidation has remained the bane for seeking political power, various shades of persons with questionable moral bankruptcy will continue to flood our politic landscape unhindered in order to manipulate the instrumentality of state power to further their ill-conceived motives of looting the nation’s wealth rather than address the urgent societal problems of poverty, hunger, infrastructural decay, rising unemployment, insecurity, to mention but a few. The paper concludes by stating emphatically that there is urgent necessity to put in place a workable constitutional framework that is people oriented and empowers them with the ultimate sovereignty of choosing those to govern them, otherwise the ‘demon’ called money and its manipulative tendencies will continue to undermine the process of democratic governance in Nigeria

Resources for Sale: Corruption, Democracy and the Natural Resource Curse

A puzzling piece of empirical evidence suggests that resource-abundant countries tend to grow slower than their resource-poor counterparts. We attempt to explain this phenomenon by developing a lobbying game in which rent seeking firms interact with corrupt governments. The presence or absence of political competition, as well as the potential costs of political transitions, turn out to be key elements in generating the ‘resource curse.’ These variables define the degree of freedom that incumbent governments have in pursuing development policies that maximize surplus in the lobbying game, but put the economy off its optimal path. We test our predictions by adding measures of democracy and authoritarianism to existing regression models of the resource curse, and obtain support for our hypotheses.Resource endowment and economic growth, development, rent seeking, bribing, corruption.

Interstate competition and political stability

Previous theories of globalization have examined factor mobility’s effect on the political conflict between social classes. But factor mobility also increases competition between state rulers in provid- ing services for citizens. I ask how this interstate competition affects the process of political change. In a simple model, interstate competition substitutes for democracy, by forcing rulers to invest in pub- lic goods so as to avoid capital and labor leaving the country. As a result, citizens are less willing to struggle for democracy, and rulers are less willing to oppose it, when interstate competition is strong. Therefore, there is less conflict over the level of democracy. The theory is tested on a post-war panel of countries, using neighboring countries’ financial openness as a proxy for factor mobility. As the theory predicts, states experience fewer changes in their level of democracy when their neighbors are financially open

Landlocked or policy locked ? how services trade protection deepens economic isolation

A new cross-country database on services policy reveals a perverse pattern: many landlocked countries restrict trade in the very services that connect them with the rest of the world. On average, telecommunications and air-transport policies are significantly more restrictive in landlocked countries than elsewhere. The phenomenon is most starkly visible in Sub-Saharan Africa and is associated with lower levels of political accountability. This paper finds evidence that these policies lead to more concentrated market structures and more limited access to services than these countries would otherwise have, even after taking into account the influence of geography and incomes, and the possibility that policy is endogenous. Even moderate liberalization in these sectors could lead to an increase of cellular subscriptions by 7 percentage points and a 20-percent increase in the number of flights. Policies in other countries, industrial and developing alike, also limit competition in international transport services. Hence,"trade-facilitating"investments under various"aid-for-trade"initiatives are likely to earn a low return unless they are accompanied by meaningful reform in these services sectors.Transport Economics Policy&Planning,Markets and Market Access,Public Sector Corruption&Anticorruption Measures,Economic Theory&Research,ICT Policy and Strategies

Democratic Reforms, Foreign Aid and Production Inefficiency

We construct an endogenous growth model and we employ empirical analysis to investigate the link between foreign aid and production efficiency in the presence of different political orientations of the recipient country. Using a panel of 124 countries from 1971 to 2007 and the production frontier toolbox, we document that regardless of income stratum, decade and type, foreign aid is associated with higher production inefficiency and that this inefficiency is reduced considerably if countries switch to democratic governance. Our study contributes to the aid literature by pointing to the institutional enhancement of the recipient countries through initially the adoption of democratic ruling practices.Democratic reforms, foreign aid, production inefficiency, translog function

New ideas of socialism

This paper discusses attempts to rethink socialism in the light of recent economic, social and political developments such as the rise of neo-liberalism, post-fordism, the demise of state socialism and globalization. It posits four new revisionist models of socialism - individualist socialism, market socialism, citizenship (or radical democratic) socialism and associational socialism. It examines each critically, arguing against the first and second models and in favour of the third and fourth. Associationalism, it is argued, provides a means for achieving the goals of citizenship or radical democratic socialism - a participatory pluralist and communitarian socialism. Associationalism, based on a strong role for associations in civil society and a co-operative polity, is outlined and advocated

Social enterprise as a socially rational business

What is the goal of social enterprise policy? Is it the creation of a ‘not-for-profit’ or ‘more-than-profit’ business movement? In institutional policy circles, arguments are shaped by the desire to protect assets for the community, while entrepreneurial discourses favour a mixture of investment sources, surplus sharing and inclusive systems of governance. This article uses data from a critical ethnography to offer a third perspective. Human behaviour is a product of, and support system for, our socio-sexual choices. A grounded theory of social and economic capital is developed that integrates sexuality into organisation development. This constructs business organisations as complex centres of community-building replete with economic and social goals. By viewing corporate governance from this perspective social enterprise is reconceived as a business movement guided by social rationality with the long-term goal of distributing social and economic capital across stakeholder groups to satisfy individual and collective needs.</p

Market Structure and Political Law: A Taxonomy of Power

The goal of this Article is to create a way of seeing how market structure is innately political. It provides a taxonomy of ways in which large companies frequently exercise powers that possess the character of governance. Broadly, these exercises of power map onto three bodies of activity we generally assign to government: to set policy, to regulate markets, and to tax. We add a fourth category – which we call dominance, after Brandeis – as a kind of catchall describing the other political impacts. The activities we outline will not always fit neatly into these categories, nor do all companies engage in all of these levels of power – that is not the point. The point is that Bank of America and Exxon govern our lives in a way that, say, the local ice cream store in your hometown does not. Explicitly understanding the power these companies wield as a form of political power expands the range of legal tools we should consider when setting policy around them