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This chapter focuses on the argument that recent years have seen a ‘race to the bottom’ in social spending. Using comparative data from 21 OECD countries, it shows that social spending has been increasing rather than decreasing in recent decades and that the welfare state has become a more prominent aspect of public policy in most OECD countries. The chapter also shows that adjustments to take account of standards of provision and real spending per capita do not fundamentally alter this picture.

This chapter evaluates the effect of globalization on the extent of a country’s labor regulation and the influence of national and international labor regulations on labor conditions. There is no evidence of an international race to the bottom in labor regulation. Other things considered equally, neither the size of a country's trade sector nor its trade policy appears to influence the extent of labor protection afforded by national labor legislation. The evidence also indicates that the system of international labor standards regulation administered by the International Labor Organization has not significantly improved labor conditions. Countries tend to ratify ILO labor standards that their domestic regulations already satisfy, rather than incurring the political costs of introducing or altering national legislation to meet higher standards. National labor regulations rarely benefit workers generally; instead some groups of workers gain at the expense of other workers.

Explores the themes of what follows. It argues that the welfare state literature of the past quarter century has been big on crisis theories of the welfare state and much weaker on facts. The chapter suggests that, in order to say something meaningful about the future of the welfare state, we need to test crisis accounts, such as those built around globalization and population ageing, with facts drawn from comparative analysis to establish which are myths and which are realities.

This chapter studies the effects of multinational companies on labor conditions around the world. The evidence shows that (1) the economic presence of multinationals in foreign countries is often overstated, (2) multinationals pay higher wages than host-country companies in both industrialized and developing countries, and (3) when multinationals acquire host country businesses, they institute changes in production methods and human resource management practices that raise productivity sufficiently to support higher wages. The evidence also rejects the race-to-the-bottom view that poor labor conditions attract multinational companies. Most flows of foreign direct investment occur between advanced countries with high labor standards and are influenced by market size and potential investment risk rather than labor conditions. The chapter also examines and evaluates the efficacy of corporate codes of conduct for improving labor conditions.

The achievements in European social policy are generally considered weak at best. The European Union’s apparent liberal and supply-side bias lends credence to the idea of a convergence towards the ‘hegemonic American model’. Yet employment policies and social protection policies have been formally included in European competencies under a specific procedure, the ‘Open Method of Coordination’. The unintended consequence of European economic and monetary integration is that different European organizations now compete for competence in the growing EU social field. This leads to considerable innovation in policy orientation and practices.

While tax competition is widely regarded as a major fiscal constraint on the welfare state, in fact, very little is known about its real impact. How have advanced industrialized states reacted to the growing mobility of parts of their tax base? To what extent has tax competition resulted in a shift of burdens to less mobile tax bases? In answering these questions, the article identifies the different shape and force of tax competition in different areas of taxation, and the differing ways in which countries have responded. The conclusion is that the pressures of international tax competition are real, but so are countervailing economic and political pressures that work against a general ‘race to the bottom’ in the taxation of potentially mobile bases. At the same time, revenue‐preserving adjustment strategies have prevented large‐scale revenue losses at the price of creating politically more controversial structures of taxation.

Seeks to explore the notion that European welfare states have been becoming more alike in recent years, with a view to establishing the reality or otherwise of the notion of a distinct ‘European social model’. The analysis shows that convergence within Europe is largely restricted to aggregate social expenditure levels, but that welfare state standards, spending on individual welfare programmes and welfare state priorities quite often differ appreciably within and between different European families of nations. In consequence, it would appear that we are no nearer to a European ‘social model’ in the early twenty-first century than we were in the early 1980s.

T.S. Srinivasan addresses the linkages between trade and labor standards and trade. He finds that the assertion that increasing competition from trade with developing countries with low labor standards threatens the prevailing higher labor standards in developed countries has weak analytical foundations and empirical support. Srinivasan notes that most countries have ratified conventions covering the ILO’s core labor standards, so expanding the definition of labor standards beyond these is not appropriate. He argues that the claim of universality and eternity for a narrow set of rights to be included in a social clause is overblown and ahistorical, as such standards are conditional on national and temporal contexts like a nation’s stage of development. He claims there are better alternatives than using trade policy interventions to prevent a “race to the bottom” in standards or the use of child labor. Finally, he questions whether trade and labor standards should be linked in the WTO.

This chapter addresses the promotion by many politicians around the world of so-called “tax competitiveness.” It proposes that this ideologically driven phenomenon is reframed as “tax wars” and suggests a set of recommendations for how developing countries can respond to such economic warfare. It also argues for the creation of a think tank whose mission would be to counteract tax competition as an ideology, that is, as a belief system that falsely promotes tax competition as a demand of economic realities. The world understands now that offering tax incentives to tempt investment, hot money, and individual wealth shrinks the tax base, distorts markets, and results in a “race to the bottom” in which nobody (except for the very richest people) wins. The chapter makes a compelling case for ending the race to the bottom since it harms sustainable development while also undermining democratic governments and diminishing human rights.

By analyzing data from 1845 funds registered in twenty-four countries, evidence of forum shopping in a “race to the bottom” due to international differences in hedge fund regulation and fund strategies is not found. Instead, where forum shopping exists, the evidence supports the view that hedge funds select jurisdictions where strategies and regulations are aligned to suit investor’s interests.

This chapter explains how foot voting in a federal system enhances political freedom. Foot voting between various regional and local governments provides extensive opportunities for political choice, particularly for the poor and disadvantaged. Opportunities for foot voting can be augmented by decentralizing functions of government, and breaking down obstacles to mobility. The chapter also responds to claims that foot voting under federalism is likely to be ineffective because of moving costs, “races to the bottom,” discrimination against minority groups, and inequality. These problems are overstated, amenable to a variety of fixes, or some combination of both. Some issues are so large-scale that they can only be addressed by national governments, thereby making it difficult to effectively decentralize power over them. But such cases are unusual.

This chapter presents the analytical framework of the book. After offering a basic definition of international harmonization, it surveys its history and gives a hypothetical explanation for the recent surge in harmonization efforts. Harmonization of economic regulation is then distinguished according to regulatory area, level of harmonization, and methods employed. Alternatives to harmonization are discussed as to their merits and demerits compared to harmonization. After enumerating major points of conflict in harmonization negotiations, the analytical tasks of the book are specified as (1) clarifying the causes and backgrounds of harmonization, (2) elucidating the negotiating process of harmonization and (3) assessing the impact of harmonization on domestic laws and global economic governance.

In this chapter, multinational enterprises (MNE) and their effect on transfer pricing, taxable profits and payments are explored. One of the purposes of the chapter is to consider the international taxation of MNEs and enforcement of the arm’s-length principle. The analysis carried out in the chapter is heavily reliant upon the work done by Kind, Midelfart Knarvik, and Schjelderup on the study of the effects of economic integration on equilibrium taxes. Both Peralta’s and Kind’s models are modified in order reveal that as governments increase the level of enforcement as a response to transfer pricing, the results show that equilibrium tax rates also increase. An analysis is then made on the effects of increased economic integration on transfer pricing and quantity decisions by MNEs when facing two policy instruments. In the end, increased economic integration is shown to affect corporate profit tax rates in either a race to the bottom or a race to the top.

In this chapter we discuss two basic ideas. The first one is that technological change as much as (if not more than) globalization leads to increasing income disparities; accordingly, European unemployment is caused by attempts at fighting these inequalities. The second one is that globalization, and specifically factor mobility, make it difficult for national governments to conduct any redistributive policy, thus leading to what is sometimes called ‘race to the bottom’, or ‘social dumping.’ We show that up to now there are no clear signs of social dumping even though the increasing use of tax heavens and posted workers indicates that the threat is real.

This chapter discusses arguments in favour of and against regulatory competition—and systems competition—from an economic perspective. The first strand of positive arguments refers to the merits of competition in general, in the Hayekian sense of a discovery procedure for efficient solutions in situations of dispersed and undisclosed knowledge. Competition among suppliers of legal products—the argument goes—should help to identify and establish efficient legislative solutions. The second type of argument builds upon the premise that regulatory competition serves as a restraining factor against the Leviathan state. Competitive structures based on credible exit threats by law’s addressees could force governments to consider the interests of legal customers instead of, for example, taxing excessively. The chapter proceeds with a discussion of arguments that have questioned the promise of regulatory competition from an economic perspective, such as the selection principle. The most prominent criticism is that regulatory competition brought about by a law market leads to a ‘race to the bottom’ instead of a ‘race to the top’ in the quality of legal rules, such as a ‘race to laxity’ in the case of mandatory standards designed to prevent negative externalities.

This book is a comparative study of environmental governance that highlights the crucial role played by the state in environmental politics and policy. By offering cross-national comparisons of environmental governance in both developed and developing countries, it demonstrates the analytical power of the comparative approach to the study of environmental politics and policy. In particular, it examines how different societies are responding politically, administratively, and institutionally to the challenge of global environmental change. Topics include alternative approaches to estimating comparative environmental performance; the idea of a “race to the bottom” in terms of environmental policy standards; policy outcomes in wind energy sectors of Germany and the United States; fisheries management in several African countries; sustainable forest management in Bolivia, Guatemala, and Peru; and the effect of political rights on levels of stakeholder participation in conservation programs.