Will Social Welfare Expenditures Survive Tax Competition?
探讨经济开放如何影响政府社会福利支出：税收竞争可能削减福利资金，但全球化也可能通过提高收入和稳定税基来增强福利供给能力。
Increasing economic openness creates demands for social welfare programmes designed to cushion the impact of economic changes, but may also encourage governments to reduce tax rates to attract mobile economic resources. Competitive tax reductions could then prevent governments from being able to finance significant welfare spending. Alternatively, economic globalization might improve the ability of governments to afford social welfare programmes—and several considerations point in this direction. First, taxes on internationally mobile activity represent only small fractions of total revenue collections; personal income taxes, value-added taxes, and social insurance contributions finance most social welfare spending. Second, international competition need not reduce taxes, and indeed, over the past 25 years, corporate tax collections have remained high as fractions of GDP and total taxes. Third, the vitality of a country's economy largely determines its level of social spending. To the extent that incomes rise as a result, greater economic openness should strengthen provision of social welfare.