Abstract
Blacklisting is a widespread and controversial instrument designed to induce tax havens to change their domestic policies. Since the Global Financial Crisis, several international organizations like the OECD and the EU have published tax haven blacklists, but these lists have been widely criticized as a flawed policy tool. In this paper, we use a mixed methods approach to explore the political rationale behind the establishment of the EU blacklist, and the causal mechanisms through which the list was expected to exert influence over governments in tax havens. First, we draw on process-tracing and expert interviews to establish that the list was less designed as an effective policy tool to induce compliance with international standards, and more as a political impetus to shape the overall problem definition, strengthen the Commissions bargaining position, and influence public opinion. Second, we conduct a survey experiment in Switzerland to determine if using a blacklist to name-and-shame and threaten economic sanctions can effectively shape public opinion in a low-tax jurisdiction. We find that “naming-and-shaming” and “economic threat” have a statistically significant effect on public opinion in favor of tax reform, but that this effect is modest.
Arel-Bundock, Vincent