Swank, Duane. (2006). "Tax Policy in an Era of Internationalization: Explaining the Spread of Neoliberalism". International Organization, 60(04), 847-882.
This article examines the spread of neo-liberal tax policies throughout the world. “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” (847). “Specifically, I argue that (asymmetric) competition for mobile assets associated with US reforms significantly influences national policy choices in other polities” (848). However, this is mitigated by domestic constraints (cost of implementation verses benefit).
Swank then examines other possible causes of the diffusion of tax policy in many countries. He looks at coercion, emulation, learning, competition and the domestic constraints that mitigate these decisions. He argues that there are different kinds of competition that can take place, and that the diffusion of tax policy can be attributed to asymmetrical competition: the
He also identifies an ideational shift that may help the spread of tax policies. “…a shift to the right at the mass and elite level should significantly increase3 the weight assigned potential benefits and diminish the costs associated with adoption of the
“On the question of diffusion, substantial theory, an abundance of qualitative evidence about the perceptions of national policymakers, and the results presented above indicate that competitive pressures under girded the diffusion of US reforms” (873).
Of interest: "While there is little question that tax poilcy has experienced structural change...the substantial capacity of governments to fund social protection and public goods provision in the capitalist democracies has not been diminished appraciably by the US-driven diffusion of neoliberalism" (876).
