The Impact of Tax Blacklisting

This paper estimates the policy and economic impacts of a European Union–led effort to reviewand “blacklist” jurisdictions based on their compliance with international standards designed to curb corporate profitshifting and private tax evasion. Using a combination of regression discontinuity and difference-and-differencemethods, there is evidence of only limited improvements in tax governance four years after the inception of the list.There is also no clear evidence that the listing exercise had any impact on offshore wealth or shifted profits,largely because the bulk of jurisdictions that host both of these were not targeted by the European Union. The resultssuggest that “coercive” efforts to reduce global tax evasion and avoidance will struggle without better targeting and enforcement.