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NORGLOBAL-Norge - Global partner

Systems of Tax Evasion and Laundering (STEAL): Locating Global Wealth Chains in the International Political Economy

Awarded: NOK 6.4 mill.

The STEAL project centered on ?global wealth chains?. Our work on global wealth chains concentrates on how wealth creation and protection often relies on hiding and disguising information. ?Global wealth chains? is a policy language concept that is the yin to the yang of global value chains. Research on global value chains has been endorsed by international organizations like the World Bank and the OECD. The focus in value chains research is on improving information in production processes. Global value chains and global wealth chains differ in their complexity and the relationship between clients, suppliers, and regulators. They can involve a range of asset vehicles and service providers, from simple shell companies, to trust and estate planners, to highly complex and well-known multinational corporations. In the STEAL project, fieldwork has been conducted on how capital moves through global wealth chains in Africa, East Asia, South America, and in the heart of the OECD, including Nordic countries. Most of this research has been interview-based, including in post-conflict zones. The research team have also collated and analyzed investment data. Our research has led to four books, all with highly esteemed presses, and articles in top journals such as American Journal of Political Science, Theory and Society, and a number of pieces in Review of International Political Economy, including the capstone piece that is Open Access to the public. The STEAL team has presented their work to Norwegian authorities and international officials in the areas of tax avoidance and evasion, and Anti-Money Laundering. Our opinion pieces have appeared in Foreign Affairs, The Washington Post, and Aftenposten. In sum, the STEAL project has developed conceptual and analytical tools. In particular, the concept of global wealth chains is now being introduced into the policy language to facilitate more systematic discussions of corporate and elite tax avoidance and evasion.

STEAL identifies Global Wealth Chains that articulate activities and relations between individuals or international entities, developed countries, developing countries, and tax havens. To locate and identify the links in Global Wealth Chains, the research question for the project is: (RQ): What governance mechanisms and economic relationships determine the articulation of Global Wealth Chains? The response to the research question will proceed via an assessment of five hypotheses. They are as follows: (H1 MARKET) GWCs are more likely to be located in jurisdictions highly compliant with international law rather than in those simply offering low tax and secrecy in a regulatory race to the bottom. (H2 MODULAR) If GWCs are to be maintained, offshor e providers must increasingly customise services for particular market segments (High Net Worth Individuals, for example). (H3 RELATIONAL) GWCs are more likely to follow the geography of colonial relationships, involving long-established trust networks which constrain microstates? development strategies. (H4 CAPTURED) If GWCs are to be maintained, investors must place less focus on capturing the regulatory process and focus more on the corporate innovation process. (H5 HIERARCHY) If regulation foc uses on the legal profession, it is likely to interrupt processes of legal innovation and the influence of this group on international rule-making to trace and regulate GWCs. These hypotheses and the key research question will be assessed through an inve stigation of six cases that are divided up among the research team. The division of work among the researchers is based on four regions and two cases: Europe (Seabrooke and Wigan); East Asia (Palan and Ali), East Africa (De Carvalho and Waris), and Wester n Hemisphere (Sharman and Marshall). The cases are: Anti-Money Laundering and Tax Evasion (Tsingou); Mapping GWCs and Offshore Financial Innnovation (Rafferty and Wigan).

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NORGLOBAL-Norge - Global partner