Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108784
Authors: 
Schjelderup, Guttorm
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5239
Abstract: 
This paper surveys tax haven legislation and links the literature on tax havens to the literature on asymmetric information. I argue that the core aim of tax haven legislation is to create private information (secrecy) for the users of tax havens. This leads to moral hazard and transaction costs in non-havens. The business model of tax havens is illustrated by using Mauritius and Jersey as case studies. I also provide several real world examples of how secrecy jurisdictions lead to inefficient market outcomes and breach of regulations in non-haven countries. Both developed and developing countries are harmed, but the consequences seem most detrimental to developing countries.
Subjects: 
tax havens
secrecy
private information
moral hazard
JEL: 
H25
F23
O10
Document Type: 
Working Paper

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