Abstract
This paper discusses the relationship between academic research and engagement with policy and political practices, seen through the author’s recollections of his personal experiences extending over half a century working in the field of international economic law. While stressing the importance of an interaction of theory and practice, it also emphasises the need to maintain academic independence and a research perspective, based on reflexive methodology (situating the various actors and their positions in the field) and immanent critique (close analysis of the self-understandings of practitioners in a field and detailed examination of their practices, contrasting the two). It traces the changing character of the relationship between research and political practice, and the increased need for engagement especially by critical scholars of international economic law with critical political practice. This need stems from the characteristics of global governance in the current era, dominated by corporatist public-private structures controlled by small elites, and confronting complex problems that place an increased importance on specialist expertise. This is often depoliticised as technocratic, creating a wide gap between such expert knowledge and the rhetoric of political debate.
My indebtedness to Lancaster University (UK), Tax Justice Network, and the International Centre for Tax and Development should be evident from the content of this paper.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
The leading text in the UK for many years through successive editions was Schmitthoff’s The Export Trade; in the US I took a course at Chicago Law School on International Business Transactions with Soia Mentschikoff, who had worked on the Uniform Commercial Code with Llewellyn, and took what was later described as a ‘regulatory contracts’ approach, Collins (1999); and another with Kenneth Dam, Chicago’s equivalent of Philip Jessup, who later served in several US administrations before returning to teach.
- 2.
Notably the excellent monograph by Kristensen and Zeitlin (2005).
- 3.
Jessup was in the secretariat of the United Nations Relief and Rehabilitation Administration (UNRRA) conference in 1943, at Bretton Woods in 1944, and a technical advisor to the American delegation to the San Francisco United Nations charter conference in 1945; but his nomination by Truman as US delegate to the UN was blocked in the Senate following accusations by Senator McCarthy of ‘unusual affinity for Communist causes’.
- 4.
Sarat and Silbey (1988).
- 5.
For a good account of the methodology in the context of transnational law see Madsen (2006), pp. 33–36. I think that it can be possible to deploy the methodological techniques he discusses even while engaged in the type of participant-research I prefer. I also combine reflexive methodology with an approach of immanent critique, involving close analysis of the self-understandings of practitioners in a field and detailed examination of their practices, contrasting the two (see Conclusions for further discussion).
- 6.
As Madsen himself points out: “the actors often rely on academic and quasi-academic resources for legitimising their practices”, Madsen (2006), p. 33.
- 7.
At that time a University College, part of the University of East Africa, in Tanganyika, which while I was there joined with Zanzibar to form the United Republic of Tanzania.
- 8.
Shivji (1986).
- 9.
Faundez and Picciotto (1978).
- 10.
There are of course significant differences for full-time researchers and those who also have teaching and other responsibilities, but even a full-time PhD is rarely completed within the 3 years it is supposed to take. The longest I have supervised took a dozen years, but this was Yao Graham, who was drawn into direct political involvement for several years when Fl. Lt. Rawlings came to power while he was doing field work in his country, Ghana; happily, he survived a serious injury and a spell in jail to return and complete his thesis.
- 11.
Among many examples I may single out Ronald Coase, whose main work was done in the left-wing intellectual context of the London School of Economics in the 1930s, but was taken up some three decades later in Chicago, resulting in the award of a Nobel Prize in 1991. Although his work probed the limits of both market-based coordination (due to ‘transaction costs’) and of corporate management or public planning, in the policy climate of the 1980s it sparked enormous outputs of free-market oriented work. Coase himself, however, sharply criticised the version of his views put forward especially by Richard Posner, the dominant figure in law-and-economics (his mildest comment was that it was “highly inaccurate”: Coase (1993), p. 96; and see Campbell and Klaes (2005).
- 12.
Picciotto (1992) now enjoying a second life at http://taxjustice.blogspot.be/2013/06/international-business-taxation.html (last accessed 14 August 2015).
- 13.
Campbell and Picciotto (2000).
- 14.
Picciotto and Mayne (1999).
- 15.
Picciotto (1998).
- 16.
Vogel (1996).
- 17.
I have tried to analyse this, most extensively in my book of 2011, and also by revisiting my earlier work on Marxist state theories: Picciotto (2010).
- 18.
- 19.
King and Lenox (2000).
- 20.
See especially Picciotto (1999).
- 21.
See Warren J (2014) Tax is the Lifeblood of Democracy: An Interview with John Christensen of the Tax Justice Network. Spirit of Contradiction, http://spiritofcontradiction.eu/niebuhr/2014/08/18/interview-with-john-christensen-of-the-tax-justice-network (last accessed 13 July 2015).
- 22.
Hampton and Abbott (1999).
- 23.
OECD (1998) Harmful Tax Competition: An Emerging Global Issue, http://www.oecd.org/tax/transparency/44430243.pdf (last accessed 13 July 2015).
- 24.
In Kenya, the High Court allowed a company to use a transfer pricing method relying on the Guidelines even though those Guidelines were at that time not mentioned anywhere in Kenyan law.” We live in what is now referred to as a ‘global village’. We cannot overlook or sideline what has come out of the collective wisdom of tax payers and tax collectors in other countries. And especially because of the absence of any such guidelines in Kenya, we must look elsewhere”. (Judge Alnashir Visram, Unilever Kenya v KRA 2005, 12). Similarly, a Malaysian court upheld a transfer pricing method based on the Guidelines, rejecting an adjustment made by the tax authority under local law, which it held to be invalid: MM Sdn Berhad v Ketua Pengarah Hasil Dalam Negeri Appeal No PKCP(R) 55/2009 (2013) MSTC ~10-046 (2013).
- 25.
For example as authoritative guidance for interpretation of tax treaty provisions: e.g. in the UK, the Taxation (International and Other Provisions) Act 2010 s.164 provides that treaties based on the OECD Model should be interpreted ‘in accordance with’ the Guidelines and with any documents published by the OECD as part of the Guidelines prior to May 1998, and any documents designated in an Order made by the Treasury after that date as comprised in the Guidelines. This is a good example of global lawmaking, in which soft and hard law become intertwined, see Picciotto (2011), pp. 20–22.
- 26.
The Nigerian Income Tax (Transfer Pricing) Regulations No. 1 (2012) specify that they shall be “applied in a manner consistent with” the OECD Guidelines “as supplemented and updated from time to time” (s.11); there is identical language in the Tanzania Income Tax (Transfer Pricing) Regulations 2014 s.9; the boilerplate provisions suggests a systematic process of ensuring adoption of these norms, presumably resulting from ‘capacity building’ through the World Bank or the OECD itself. Even where countries enact their own regulations, the Guidelines are relied on in practice, and referred to by courts, e.g. in India a Tax Tribunal even recently referred to a draft report proposing changes to the Guidelines although it had not yet been approved: Income Tax Appellate Tribunal, Mumbai, ITA No. 1565/Mum/2014, Watson Pharma Pvt Ltd v DCIT (9 January 2015), para. 61.
- 27.
For further details see Picciotto S (2013) Is the International Tax System Fit for Purpose, Especially for Developing Countries? ICTD Working Paper 13 http://www.ictd.ac/en/publications/international-tax-system-fit-purpose-especially-developing-countries (last accessed 14 August 2015); Corporate Reform Collective (2014), chs. 1 and 10.
- 28.
Owens J, Seminar on Liable to No Tax, 65th IFA Congress, Paris, 15 September 2011; ITR Correspondent, Jeffrey Owens Joins Ernst & Young, International Tax Review, 8 June 2012, http://www.internationaltaxreview.com/Article/3043711/Jeffrey-Owens-joins-Ernst-and-Young.html (last accessed 14 August 2015); Owens Looks Back on his Time in Office, International Tax Review, 1 February 2012, http://www.internationaltaxreview.com/IssueArticle/2967120/Archive/Owens-looks-back-on-his-time-in-office.html (last accessed 14 August 2015).
- 29.
Picciotto S (2012) Towards Unitary Taxation, http://www.taxjustice.net/cms/upload/pdf/Towards_Unitary_Taxation_1-1.pdf (last accessed 13 July 2015).
- 30.
Picciotto (2015).
- 31.
See http://www.ictd.ac/en/unitary-taxation-transnational-corporations-special-reference-developing-countries (last accessed 14 August 2015).
- 32.
We later received a grant of $10,000, which helped fund travel to meetings or consultations by members who had no other access to such support. I considered it legitimate to use ICTD funds for my own expenses, which became significant once the OECD consultations got underway, because the ICTD research benefited enormously from the intimate knowledge I gained, as well as contacts made, from following the process so closely. However, the BMG was not a sponsor or supporter of the ICTD, since this might be considered by some to compromise its academic independence. In wearing several hats, I in some ways resembled the tax advisers also participating in the BEPS consultations, such as Mary Bennett, who works for law firm Baker McKenzie (after spending some years as an OECD official), but has also represented various industry groups.
- 33.
The Report is available, together with other details of the ICRICT, www.icrict.org (last accessed 13 July 2015).
- 34.
See e.g. Stahl T (2013) What is Immanent Critique? SSRN: http://ssrn.com/abstract=2357957 (last accessed 13 July 2015).
- 35.
UK Royal Commission on Income Tax 1920, Evidence, p. 452 Question 9460.
References
Campbell D, Klaes M (2005) The principle of institutional direction: Coase’s regulatory critique of intervention. Camb J Econ 29:263–88
Campbell D, Picciotto S (2000) The justification of financial futures exchanges. In: Hudson A (ed) Modern financial techniques, derivatives, and law. Kluwer Law International, The Hague, pp 121–33
Coase R (1993) Coase on Posner on Coase and concluding comment. J Inst Theoretical Econ 149(1):96–98
Corporate Reform Collective (2014) Fighting corporate abuse. beyond predatory capitalism. Pluto Press, London
Faundez J, Picciotto S (1978) The nationalization of multinationals in peripheral economies. Macmillan, Basingstoke
Hampton M, Abbott J (eds) (1999) Offshore finance centres and tax havens. The rise of global capital. Palgrave Macmillan, London
King A, Lenox M (2000) Industry self-regulation without sanctions: the chemical industry’s responsible care program. Acad Manage J 43(4):698–716
Kristensen H, Zeitlin J (2005) Local players in global games: the strategic constitution of a multinational corporation. Oxford University Press, Oxford
Madsen M (2006) Transnational fields: elements of a reflexive sociology of the internationalisation of law. Retfærd Nordisk Juridisk Tidsskrift 29(3/114):23–41, http://retfaerd.org/retfaerd-nr-114-20063/transnational-fields-elements-of-a-reflexive-sociology-of-the-internationalisation-of-law/ (last accessed 21 August 2015)
Manin B (1994) The metamorphoses of representative government. Econ Soc 23(2):133–171
Manin B (1997) The principles of representative government. Cambridge University Press, Cambridge
Picciotto S (1992) International business taxation: a study of the internationalization of business regulation. Quorum Books, Westport, http://taxjustice.blogspot.be/2013/06/international-business-taxation.html (last accessed 14 August 2015)
Picciotto S (1998) Linkages in international investment regulation: the antinomies of the draft multilateral agreement on investment, University of Pennsylvania. J Int Econ Law 19(3):731–768
Picciotto S (1999) Offshore: the state as legal fiction. In: Hampton M, Abbott J (eds) Offshore finance centres and tax havens: the rise of global capital. Palgrave Macmillan, London, p 43–79
Picciotto S, Mayne R (eds) (1999) Regulating international business: beyond liberalization. MacMillan, Basingstoke
Picciotto S (2010) International transformations of the capitalist state. Antipode 43(1):87–107. doi:10.1111/j.1467-8330.2010.00812.x
Picciotto S (2011) Regulating global corporate capitalism. Cambridge University Press, Cambridge
Picciotto S (2015) Indeterminacy, complexity, technocracy and the reform of international corporate taxation. Soc Leg Stud 24(2):165–184. doi:10.1177/0964663915572942
Sarat A, Silbey S (1988) The pull of the policy audience. Law Policy 10:97–166
Shivji I (1986) Limits of legal radicalism: reflections on teaching law at the University of Dar es Salaam. University of Dar es Salaam, Dar es Salaam
Vogel S (1996) Freer markets, more rules. Cornell University Press, Ithaca
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Picciotto, S. (2016). Critical Theory and Practice in International Economic Law and the New Global Governance. In: Bungenberg, M., Herrmann, C., Krajewski, M., Terhechte, J. (eds) European Yearbook of International Economic Law 2016. European Yearbook of International Economic Law, vol 7. Springer, Cham. https://doi.org/10.1007/978-3-319-29215-1_1
Download citation
DOI: https://doi.org/10.1007/978-3-319-29215-1_1
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-29214-4
Online ISBN: 978-3-319-29215-1
eBook Packages: Law and CriminologyLaw and Criminology (R0)