Abstract: The Development and Transfer of Tax Ideas: The International Advisory Missions of Carl Shoup

Michael R. Adamson


This paper asks how we should understand the effectiveness of international financial missions conducted by American experts. Should financial missions be judged in terms of policy implementation, either in the short term or long term, or both? If not, should we consider them in terms of knowledge transfer? If the latter, how do we assess the transfer of ideas on fiscal and tax reform? To put consideration of these questions into context, this paper considers five missions: Cuba (1921-1923), Cuba (1931-1932), Cuba (1938-1939), Puerto Rico (1943), and Japan (1949). The discussion highlights the heterogeneity of the contexts within which the missions occurred. I conclude that strong mission support from Washington may be decisive in determining whether ideas are translated into policy, yet domestic political leadership is also crucial in the absence of a U.S. receivership. Support on the part of host government leaders may not be sufficient for the realization of recommendations as policy, however. The host government must also possess or acquire the institutional capacity to administer tax policy. The paper also notes that path dependency in tax regimes can withstand a major crisis, such as civil war or depression, if the institutional foundation for regime change is not firmly established.