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6. Conclusion
This thesis looks at the roles of power, legitimacy and sovereignty in solving co-
operation problems over interna tiona l taxation. It provides a set of case studies on
exerc ises of power by dominant states and IOs in order to enact change in tax ha-
vens, the legitimacy of their approaches , and the lim its of sover eignty in a global-
ized world. Specifically, I have analyzed the surprising dem ise of Liechtenstein’s
and Switzerland’s ba nking secrecy regulations, the bringing of tax havens in line
with globa l tax standards and money laundering regulations, and the EU’s attempt
to stop Ireland from facilitating international tax avoidance by MNCs. This body
of work contribut e s to the field of interna tional political ec onomy in number of
ways.
Firstly, I have documented, analyzed, contrasted and com pared the various mech-
anism s and instru m ents of power available to dominant states and IOs in solvin g
these cooperation problems. That is, promoting fairness-based rules and standards,
the logic of appropriateness, extraterritorial assertion of law, blacklisting , re-
strictions on market access, and economic and legal sanctions. In this way, I have
shown that coercion has played an important role in overcoming these cooperation
problems, particularly where the scope of the p roblem was large and/or results
were wanted quickly . Secondly, I have shown that contrary to the suggestions of
the bulk of the literature on offshore finance, sovere ignty and the resulting bound-
aries of regulatory jur isdic tion have not protec ted the economic m odels of tax ha-
vens. That is, in solving coopera tion problem s, Westphalian sovereignty has been
relaxed in favor of newly legitim ize d norms, such as trans parency, fairness and
equality. Lastly, I have shown that many of the instru m ents and exercises of power
used to solve these cooperation problems are of debatable legitimacy. FATCA and
the FA TF’s Recomm endat ions in particular standout for their debatable procedural
legitimacy in overriding state consent, even if their intended outcom es were more more
