Fighting Multiple Tax Havens
b'This paper develops a competition theory framework that evaluates an important aspect of the OECD\\u2019s Harmful Tax Practices Initiative against tax havens. We show that the sequential nature of the process is harmful and more costly than a \\u201cbig bang\\u201d multilateral agreement. The sequentiality may even prevent the process from being completed successfully. Closing down a subset of tax havens reduces competition among the havens that remain active. This makes their \\u201ctax haven business\\u201d more profitable and shifts a larger share of rents to these remaining tax havens, making them more reluctant to give up their \\u201ctax haven business\\u201d. Moreover, the outcome of this process, reducing the number of tax havens, but not eliminating them altogether, may reduce welfare in the OECD.'