This paper argues that the OECD played a key role in the diffusion of bilateral tax treaties in non-OECD countries in the 1990s. This contribution provides a rare empirical analysis of the mechanisms of diffusion used by the OECD with regard to non-OECD member countries to promote a particular policy and identifies “depoliticization” as an important strategy for diffusion.
After a brief analysis explaining how the OECD framed the idea of bilateral tax treaty, this contribution presents a case study to demonstrate how the OECD strategically organized the promotion of tax treaties to non-members and how it combined various mechanisms of diffusion. As such, it tackles the need to go beyond identifying that the presence of an international organisation increases the likelihood of diffusion. The case study finds that through its networking activities and its expertise, the OECD acted as a policy entrepreneur by conveying the necessity to sign tax treaties to non-OECD member countries.
The paper also argues that “depoliticization” is a powerful, however overlooked, strategy for diffusion. The analysis highlights how the OECD kept the matter of tax treaty at a technical level, therefore insulating discussions from public scrutiny and political debate. Data and information provided by the OECD were mostly about the technical content and application of tax treaty. In addition, the OECD did not publish evidence regarding the consequences of tax treaty on tax revenues or foreign direct investment in general or for non-OECD member countries more specifically. Also, training activities (referred to as “technical training” by the OECD) were a strategic form of “technical” information production and dissemination. While in some cases, international organizations may choose to raise public awareness regarding a problem or a favoured solution, this case study supports the claims that international organizations may “depoliticize” an issue to preserve its influence over a specific issue.
