References (38)


Citations (20)



Do Tax Havens Flourish?

James R. Hines Jr.

University of Michigan; NBER

November 2004

NBER Working Paper No. w10936

Tax haven countries offer foreign investors low tax rates and other tax features designed to attract investment and thereby stimulate economic activity. Major tax havens have less than one percent of the world's population (outside the United States), and 2.3 percent of world GDP, but host 5.7 percent of the foreign employment and 8.4 percent of foreign property, plant and equipment of American firms. Per capita real GDP in tax haven countries grew at an average annual rate of 3.3 percent between 1982 and 1999, which compares favorably to the world average of 1.4 percent. Tax haven governments appear to be adequately funded, with an average 25 percent ratio of government to GDP that exceeds the 20 percent ratio for the world as a whole, though the small populations and relative affluence of these countries would normally be associated with even larger governments. Whether the economic prosperity of tax haven countries comes at the expense of higher tax countries is unclear, though recent research suggests that tax haven activity stimulates investment in nearby high-tax countries.

Number of Pages in PDF File: 44

Open PDF in Browser Download This Paper

Date posted: December 15, 2004  

Suggested Citation

Hines Jr., James R., Do Tax Havens Flourish? (November 2004). NBER Working Paper No. w10936. Available at SSRN: https://ssrn.com/abstract=625567

Contact Information

James Rodger Hines (Contact Author)
University of Michigan ( email )
625 South State Street
Ann Arbor, MI 48109-1215
United States

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN

Paper statistics
Abstract Views: 1,716
Downloads: 106
Download Rank: 203,406
References:  38
Citations:  20