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Contagious Financial Globalization: FDI and Asset Diversification in the making of Democracy (draft proposal)

March 3, 2011

Contagious Financial Globalization: FDI and Asset Diversification in the making of Democracy
This dissertation project re-evaluates the well-known association between financial globalization and democratization. It challenges the conventional wisdom of full capital mobility and low income tax, emphasizes FDI’s impacts on host countries’ fiscal contours and corporate sector development, and articulates a conditional explanatory framework to explain variance in political outcome across countries. I argue that high FDI share in corporate tax revenue alleviates the redistributive conflicts in the income sector and that the ability to relocate assets into the high yield, low tax FDI dominated corporate sector makes the rich’s more tolerant of redistribution under democracy, both of which serve to promote democracy in FDI host countries. A multi-method approach is used to assess the theoretical argument and details of this project are described.

From → Working papers

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