| dc.description.abstract | This thesis aims to clarify the obscure perception about tax havens being well-governed countries. Empirical
studies on tax havens usually take a dichotomous approach whereby a jurisdiction is either a tax haven or
not. We argue that this approach is of little value considering there is no common and overall accepted
de nition of tax havens. Previous literature has given too much attention to small and insigni cant tax
havens, while large economies have gone unnoticed. We challenge the dichotomous approach and contribute
to the tax haven literature using the Financial Secrecy Index as our dependent variable. With this new
measure, we turn to examine the determinants of tax haven status, and we do not nd a signi cant and
identi able chain of causation for the relationship between tax haven status and governance quality. Thus,
we can disprove some of the ndings from Dharmapala and Hines (2009), regarded by many as the most
in
uential evidence on the relationship between governance and tax havens. However, we nd supporting
evidence for a low degree of corruption as important for tax haven status. This nding suggests that tax
havens' credibility to attract nancial capital is closely attached to a low degree of corruption, at least on
paper. Finally, evidence shows that large developed economies with oversized nancial centers su er from
the country capture phenomenon. Rather than serving the economy, large nancial centers now prey on it,
eventually undermining governance and institutional quality.
Keywords - Tax Havens, Governance Quality, Institutions, Financial Secrecy Index, Corruption, Country
Capture. | en_US |
