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          Regulative Norms and Inappropriate Means 49 In their efforts to impose or fend off global tax regulation, both the OECD and targeted small states resorted to rhetorical strategies to advance their interests . With the huge power disparities between the two sides, small states listed as tax havens had few other options than a rhetorical strategy. For OECD member states, however, a range of other options was available and potentially more efficacious .Thus before surveying the main themes of the rhetorical contest in chapter 3, and analyzing the results in chapters 4, 5, and 6, it is important to establish why the dominant powers ruled out military and economic coercion. The absence of such coercion is puzzling because, as we will see, any one of these tactics would have had a very good chance of forcing small states to comply with the OECD’s demands.The other major goal of the chapter is to investigate an alternative hypothesis consistent with the OECD’s retreat from its main goals in 2001.This alternative account holds that corporations sabotaged or defeated the OECD’s regulatory ambitions in order to protect their tax shelters. As opposed to focusing on states and intergovernmental organizations, this view privileges capitalist or corporate interest. Rather than assuming the small states won a victory, this view maintains that big business beat the tax collectors. We will see how potential approaches to coercing the compliance of the smaller states were normatively ruled out, and thus how the OECD came to depend upon a rhetorical strategy. This choice, which was relatively favorable to the small states, given their minuscule military and economic resources, was shaped primarily by regulative norms that ruled out military force and economic coercion. I argue that there are good reasons for believing that these coercive tactics would have been effective, but that they were not used because they were inappropriate in normative terms, as opposed to inefficient in instrumental terms. My demonstration will be based on the rather familiar “three-cornered contest,” between the norm-based hypothesis advanced in this chapter, the leading alternative explanation, and the available evidence.1 The sections that consider these issues are prefaced by a discussion of the definition and nature of regulative norms in general.The regulative norms in question were a mixture of generalized principles governing relations between states that sharply limit the use of force and more specific norms relevant on account of the technocratic identity of the OECD as an international organization comprised of “apolitical” experts. Given that the G7 countries have the vast majority of the world’s naval power at their disposal, and their opponents have only token armed forces or none at all, gunboat diplomacy would seem to offer a quick, easy, and effective means to enforce compliance with regulatory demands. Such interventions by larger states against small and/or non-Western polities over economic and financial disputes have a long history.2 There are no reasons to think that changes in the technology of modern naval warfare have made these tactics obsolete. Instead, what has changed and made this option almost unthinkable is the evolution of regulative norms which rule military action out of consideration. Objections that this option is so far-fetched as to not be worth discussing miss the point: gunboat diplomacy was so common in the recent past that its current illegitimacy is remarkable in and of itself. The prohibition against military force in this context illustrates an instance of an almost universally shared and deeply internalized norm acting to remove one possible avenue of action from the calculations of states. Because the use of armed force against tax havens was so obviously inappropriate, because the relevant norm was taken for granted, this part of the explanation has a strong structural cast. In contrast, actors and agency had a prominent role in deciding whether or not economic coercion was an appropriate response to the resistance of small states. Proponents of economic sanctions and economic coercion more generally have fallen upon hard times of late. Critics have noted the low success rate of sanctions, success defined as effecting the desired policy change in the target state, and the long list of accompanying conditions that tends to be associated with the rare successes that are recorded.Yet despite this disillusionment, most of the small states running afoul of the OECD tax competition initiative are extremely vulnerable to economic coercion, broadly defined. They are characterized by tiny economies...

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