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            Hearts and Minds in the Global Arena Regulative norms exercised a crucial influence on the OECD campaign against what it defined as “harmful tax competition” by ruling out a number of options that would have been eminently practical and efficient. Instead, in delegating the campaign to the OECD, its member states opted for a rhetorical strategy, relying on moral and reasoned suasion and speech acts. This course of action involved public appeals based on generally accepted principles for targeted tax haven jurisdictions to comply with the OECD’s specified slate of reforms. It also was based on speech acts that served to impugn the reputation of those countries that failed to cooperate, covered in the following chapter. The OECD was able to set the terms of the rhetorical contest. But it was also exposed to the dangers inherent in a public debate , in particular having to make its case for the sympathies of third party observers. If the OECD came to a rhetorical strategy through a choice constrained primarily by regulative norms, targeted states had little choice but to respond in kind, given their tiny military and economic resources.Thus if not playing to the strength of its opponents, the OECD at least opted to engage listed states on the terrain where they were least weak. The OECD set the initial terms of the campaign, not only by choosing a rhetorical strategy, but also by appealing to widely shared principles and norms around which the debate subsequently developed.1 The aim of this rhetorical strategy was to persuade states accused of engaging in harmful tax competition to mend their ways, but even more so to mobilize the support of third parties (states, intergovernmental organizations, and other transnational actors) by convincing them of the 70 rightfulness of the OECD’s cause. The OECD case rested on four principles: law enforcement, sovereignty, consistency, and equality in argument. First, the OECD tried to label the small states as “tax poachers” and associate them with criminal activities such as tax evasion, money laundering, and terrorist finance (the law enforcement principle). Second, it argued that tax haven-driven tax competition undermined others’ fiscal sovereignty by creating a race to the bottom (sovereignty). Third, the OECD reasoned that its hostility to “harmful” tax competition did not detract from its strong support of competition overall, nor was the exclusionary conduct of the campaign in conflict with its developmental and cooperative mission (consistency).And fourth, the OECD presented itself as an ideal interlocutor , fully seized of the need for reasoned discussion, dialogue, and listening to alternative points of view (equality in argument). In response, targeted states insisted on the legitimacy of their behavior and their willingness to fight crime (law enforcement). Furthermore, targeted tax havens seized on OECD claims in order to argue that the OECD itself was violating their sovereignty by seeking to dictate and impose foreign tax laws upon them (sovereignty ).They held that the OECD was hypocritical in selecting its targets, given that many of its own members indulged in similar practices (consistency). Finally, it was alleged that the OECD violated the basic norms of a debate between equals by trying to set the agenda unilaterally (equality in argument). States accused of being tax havens thus sought to turn the tables on the OECD, responding with counterarguments based on the same norms, but reversing them in each case in order to claim that they and not the OECD were acting in line with these norms. Both sides worked from the same script, but cast the other in the role of villain. By 2002, not only had the OECD failed to convince tax havens of the error of their ways, but it had also failed to convince key sectors of the international audience of the wisdom and justice of its arguments relative to those of its opponents. In the process, it also had suffered crippling defections from its own ranks. Targeted states put up a successful rhetorical defense. The OECD was trapped by the very same rhetorical stratagems it had introduced. In committing to the power of reasoned debate and invoking the value of certain norms from the outset, the OECD could not then ignore the result of the argument and declare these same norms unimportant. Having lost the argument it lost the battle . Given that the OECD was an organization founded on the basis of technocratic expertise that seeks to influence members and nonmembers by reasoned dialogue, it would...

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