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The Better Route to Global Tax Coordination: Gradualism or Multilateralism?

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  • Kai A. Konrad
  • Marcel Thum

Abstract

In the context of international tax coordination incomplete information is one of the well-known frictions that can lead to bargaining failure and might explain a lack of observed coordination. We consider international negotiations about tax coordination under complete and incomplete information. We identify the conditions for multilateral negotiations to be more likely to be successful than gradual/sequential negotiation approaches and compare different routes of sequential bargaining. Under plausible conditions, full-scale global coordination is least likely to emerge if the negotiations take place sequentially, and if the negotiations with the most unpredictable country take place last.

Suggested Citation

  • Kai A. Konrad & Marcel Thum, 2018. "The Better Route to Global Tax Coordination: Gradualism or Multilateralism?," CESifo Working Paper Series 7305, CESifo.
    • Handle: RePEc:ces:ceswps:_7305
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    Cited by:

    1. von Haldenwang, Christian, 2020. "Digitalising the fiscal contract: An interdisciplinary framework for empirical inquiry," IDOS Discussion Papers 20/2020, German Institute of Development and Sustainability (IDOS).
    2. Alexandre Chirat & Guillaume Sekli, 2022. "Assessing the credibility and fairness of international corporate tax rate harmonization via cooperative game theory," Working Papers 2022-08, CRESE.

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    More about this item

    Keywords

    tax competition; tax cooperation; multilateral negotiations; sequential negotiations; ultimatum bargaining; acceptance uncertainty;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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