Description
A central question in international political economy concerns the role of domestic forces in shaping global economic outcomes. This question has largely been delegated to comparative political economy, yet CPE has struggled to explain developments in international taxation. Existing approaches, primarily centered in the varieties of capitalism approach, often treat the evolution of tax regimes as driven primarily by international pressures, with domestic institutions exerting limited influence beyond temporarily mitigating the effects of globalization. This paper revisits the domestic foundations of international tax competition through a growth model perspective. I argue that domestic growth coalitions mediate and refract international pressures rather than simply absorb them. By linking growth model theory with IPE, the paper demonstrates that variation in countries’ engagement with tax competition reflects differences in the composition and power of domestic growth coalitions. Moreover, these coalitions are themselves shaped and empowered by international trends: global financialization strengthens domestic financial sectors and promotes financialized growth models, while export-led coalitions maintain distinct fiscal strategies. The analysis reveals that international tax competition is not purely a global race to the bottom but a process filtered through and exacertbated by nationally specific growth models.
