Governance, Trust and Taxes: On the Determinants of Tax Havens

Guri Weihe, E. Juanna Schröter Joensen

    Research output: Working paperResearch

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    This paper examines the role of social capital (trust) vis-à-vis the propensity of a country to be a tax haven. The empirical analysis corroborates that better governed countries have a higher ceteris paribus
    probability to be tax havens. However, social capital counteracts the effect of governance quality. This effect is so strong that the partial effect of governance quality is reversed for countries with the trust
    index in the top quartile – making these high trust countries less likely to be tax havens – even as governance quality is increased. Thus it is crucial to consider the interaction between institutions and social capital, since the same governance institutions have a different impact on the tax haven propensity for countries with different social capital.
    Original languageDanish
    Place of PublicationFrederiksberg
    PublisherDepartment of Business and Politics. Copenhagen Business School
    Number of pages11
    ISBN (Print)8791690854
    Publication statusPublished - 17 Sep 2013
    SeriesWorking Paper / Department of Business and Politics


    • Tax havens
    • Governance
    • Institutions
    • Trust
    • Social Capital

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