Resistance in International Relations: Offshore Financial Centers and the New Tax and Transparency Regime
Crasnic, Loriana Anca
Newman, Abraham L
Scholars in international relations often times are interested in explaining state adherence to international rules and regulations. At present, the accepted methodology for assessing state action distinguishes between compliance and non-compliance. In the real world, however, states react to international regulations in a variety of ways, questioning the utility of this dichotomy. Even when states initially comply they can continue to act subversively, either at the national or international level. These acts of subversion have the potential to alter both the design as well as the effectiveness of the regime as originally envisioned. As a result, talking about compliance as removed from the substance of regulations and the mechanisms through which they are enforced does not make sense. This study therefore introduces and develops a new concept of resistance in international relations to show the nuanced ways in which state actors react to new international rules and regulations. I distinguish between four styles of resistance politics: acceptance, foot-dragging, disruption and rejection. Faced with pressure to adhere to new rules, state policymakers will choose one or the other of the four strategies depending on their access to international organizations and their commitment to sectors that would be disadvantaged under the new regulations. The study develops and tests this resistance theory with respect to the post-2009 tax and transparency regulations that primarily affected offshore financial centers. By means of general descriptive statistics and qualitative process-tracing in case studies of Switzerland, the Bahamas and Barbados, I show the importance of access and commitment for policymakers as they decide on a strategy of resistance. The case studies draw on thousands of pages of primary source documents from three archives, as well as more than 30 original interviews with policymakers and finance officials. Ultimately, the study pries open our static understanding of compliance and non-compliance in international relations, advancing the current literature on regime emergence and norm diffusion.
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