Morisset, Jacques2012-08-132012-08-132003-02https://hdl.handle.net/10986/11325The increasing mobility of international firms and the gradual elimination of barriers to global capital flows have stimulated competition among governments to attract foreign direct investment, often through tax incentives. This note reviews the debate about the effectiveness of tax incentives, examining two much-contested questions: can tax incentives attract foreign investment? And what are the costs of using them?CC BY 3.0 IGOTAX INCENTIVESFOREIGN DIRECT INVESTMENTSTAX LAWCOST RECOVERYINCENTIVESTAX POLICYTAX COMPETITIONTAX HARMONIZATIONCORPORATE TAXATIONTAX ALLOWANCESTAX CREDITSTAX ADMINISTRATIONACCELERATED DEPRECIATIONACCOUNTINGAFFILIATED ORGANIZATIONSBIDDINGCAPITAL FLOWSCODE OF CONDUCTCOMMUNICATIONS DEVELOPMENTCOMPETITIVE MARKETSCOMPETITIVE TAX INCENTIVESCORPORATE INCOME TAXCORPORATE TAXCORPORATE TAX RATECORPORATE TAX RATESCORPORATION TAXDEPRECIABLE CAPITALDEVELOPING COUNTRIESDIRECT INCOME TAXESDOMESTIC MARKETEMERGING MARKETSEMPLOYMENT TAXESEXPENDITUREEXPORTEXPORT PROCESSING ZONESEXPORTSFOREIGN COMPANIESFOREIGN DIRECT INVESTMENTFOREIGN INVESTMENTFOREIGN INVESTORSFREE TRADEGLOBAL CAPITALGLOBAL CAPITAL FLOWSGLOBALIZATIONGOVERNMENT REVENUESHOST GOVERNMENTHOST GOVERNMENTSILLICIT BEHAVIORIMPORT DUTY EXEMPTIONSINCENTIVE MEASURESINCENTIVE REGIMESINCOME TAXINCOME TAX RATEINDIRECT CONSUMPTIONINDUSTRIAL COUNTRIESINSTRUMENTINSURANCEINSURANCE COMPANIESINTERNATIONAL ECONOMICSINTERNATIONAL FINANCEINTERNATIONAL FIRMSINTERNATIONAL INVESTORSINVESTINGINVESTMENT ALLOWANCESINVESTMENT CLIMATEINVESTMENT CODEINVESTMENT DECISIONSINVESTMENT EXPENDITURE ALLOWANCESINVESTMENT EXPENDITURESINVESTMENT LOCATION DECISIONSINVESTMENT PROJECTSINVESTMENT TAX ALLOWANCESINVESTMENT TAX CREDITSJURISDICTIONLOSS OF REVENUEMACROECONOMIC ENVIRONMENTSMACROECONOMIC STABILITYMULTINATIONAL COMPANIESMULTINATIONAL FIRMSPOLITICAL STABILITYPRIVATE INVESTMENTPUBLIC POLICYPUBLIC POLICY INNOVATIONSRENTSSMALL ECONOMIESSTATUTORY TAXSTATUTORY TAX RATETARGETED TAX INCENTIVESTAXTAX ADMINISTRATIONTAX BASETAX CHANGESTAX COMPETITIONTAX HAVENSTAX INCENTIVETAX INCENTIVE PROGRAMSTAX INCENTIVESTAX MEASURESTAX NEEDSTAX POLICIESTAX POLICYTAX RATETAX RATESTAX REBATESTAX REGIMESTAX REVENUESTAX SYSTEMTAX SYSTEMSTAXABLE INCOMETAXATIONTAXPAYERSTRANSFER PRICESTRANSPARENT TAX RULESTREASURYUSE TAX TAX INCENTIVESFOREIGN DIRECT INVESTMENTSTAX LAWCOST RECOVERYINCENTIVESTAX POLICYTAX COMPETITIONTAX HARMONIZATIONCORPORATE TAXATIONTAX ALLOWANCESTAX CREDITSTAX ADMINISTRATIONWorld Bank10.1596/11325