IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Tax Policy in an Era of Internationalization: Explaining the Spread of Neoliberalism

  • Swank, Duane
Registered author(s):

    I offer an explanation for the widespread diffusion of neoliberal tax policies in the developed democracies. After accounting for the policy influences of commonly experienced domestic and international forces, I consider several plausible paths of diffusion of neoliberal tax structure. My central argument is that the highly visible 1980s market-conforming tax reform in the United States should be especially important in shaping subsequent tax policies in other polities. There are substantial reasons to believe, however, that domestic political and institutional forces will shape policymaker assessment of the benefits and costs of neoliberal reforms: the strength of right parties and the degree to which the median voter has moved right should condition adoption of neoliberal tax policy; the institutions of national and sector-coordinated capitalism should also slow the enactment of neoliberal tax reforms. I assess these arguments with empirical models of 1981 98 tax rates on capital in sixteen nations. I find that changes in U.S. tax policy influence subsequent reforms in other polities; in the long term, all nations move toward the U.S. neoliberal tax structure. Analysis also shows, however, that the short-term responsiveness to U.S. tax reforms is notably greater where uncoordinated market institutions are dominant. Theory and extensive qualitative and quantitative evidence indicate that pressures to compete for mobile assets, as balanced against the economic and political costs of adoption, anchor the process of diffusion of neoliberal tax policy. There is little evidence for the view that systematic policy learning or social emulation drove tax policy diffusion.Earlier versions of this article were presented at the Center for European Studies and Weatherhead Center for International Affairs, Harvard University; Center for International Studies, UCLA; and Yale University as well as the 2002 Annual Meetings of the American Political Science Association. An earlier version was published as Minda de Gunzburg Center for European Studies, Harvard University, Working Paper 120. I thank Alex Hicks, Rob Franzese, Torben Iversen, Andy Martin, Cathie Jo Martin; participants in the Yale, UCLA, and Harvard conferences, especially Geoffrey Garrett, Helen Milner, Dennis Quinn, and Beth Simmons; and two anonymous referees and the editors of International Organization for helpful comments. I also gratefully acknowledge the contribution of Sven Steinmo that comes by way of our past collaborative work on tax policy.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: link to article abstract page
    Download Restriction: no

    Article provided by Cambridge University Press in its journal International Organization.

    Volume (Year): 60 (2006)
    Issue (Month): 04 (October)
    Pages: 847-882

    in new window

    Handle: RePEc:cup:intorg:v:60:y:2006:i:04:p:847-882_06
    Contact details of provider: Postal: Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK
    Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:cup:intorg:v:60:y:2006:i:04:p:847-882_06. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.