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Competitiveness: was Charles Tiebout joking?

POSTED ON April 23rd  - POSTED IN Blog, Tax, What is competitiveness?
The Tiebout model of cross-border migration

The Tiebout model of cross-border human migration

Do nations or states ‘compete’ with each other in a meaningful way? We have already explored the thinking of Paul Krugman, Adam Smith, Robert Reich, and the Tax Justice Network on this question. Their answers are, to summarise broadly: ‘no – or at least not in the way people commonly suppose.’

This ‘competition’ between states, we’ve argued, bears no economic relation to the microeconomic competition between firms or companies in a market. The shortest way to illustrate this, perhaps, is to note that a failed company is one thing: a failed state is another beast altogether.

But there are influential people who disagree.

‘National Competitiveness’ – a crowbar for corporate and financial interests

POSTED ON April 1st  - POSTED IN Blog, Tax
Will Davies, Co-Director of the Political Economy Research Centre (PERC), Goldsmiths, University of London

Will Davies, Co-Director of the Political Economy Research Centre (PERC), Goldsmiths, University of London

Update: also re-posted at Naked Capitalism, and at the Tax Justice Network.

The term “UK PLC” — the ‘PLC’ bit standing for Public Limited Company — evokes notions that whole countries behave like corporations. It is routinely trotted out by politicians in the United Kingdom: why, this FG editor even heard (and gnashed teeth at) this very term on the BBC’s Today Programme this morning, on a day when 100 UK business leaders signed an open letter suggesting that the UK must display that it is “open for business” by supplying further tax cuts and other goodies to large corporations.

Versions of these kinds of slogans, implicitly equating the interests of large corporate players with the wider national interest, can be found in most countries.

In our latest article, Will Davies asks how slogans such as these – which are intimately intertwined with notions of ‘national competitiveness’ – have managed to achieve such sway over policy-making, around the world.

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