Resources > Harmful Tax Competition: To Participate or Not To Participate
Harmful Tax Competition: To Participate or Not To Participate
Framework developed by Noam Ebner and Yifat Winkler; modifed by Nellie Munin
In this ‘Prisoner’s Dilemma’ game, the conflict of interests illustrates the global phenomenon of harmful tax competition, whereby states use unfair practices to attract investors and potential taxpayers to them at the expense of other countries, e.g., by acting as tax havens. To prevent such practices, the participating countries set forth an agreed-upon body of fair rules; however, the parties to the game must struggle with the temptation to deviate from these rules, to attract more tax revenues at the expense of their allies. The game illustrates that the more parties give in to this temptation to deviate, the greater the general damage to the entire group will be.
Harmful Tax Competition: To Participate or Not To Participate (PDF)
Teacher’s Manual (PDF) available on Mitchell Hamline Open Access