Hosting Offshore Finance: The Making of the Netherlands as an Offshore Jurisdiction
Far from being the dodgy fringe phenomenon for which it is often taken, the offshore financial system constitutes an integral part of contemporary capitalism. Its existence has implications that reach far beyond the illicit economy. The offshore financial system would not exist were it not for the institutional infrastructure provided by offshore jurisdictions (OJs). OJs are typically associated with small island states, and their emergence as hosts for offshore finance is usually explained with reference to colonial histories and a lack of alternative strategies for economic development. Recent research on offshore finance, however, has put the focus on a number of advanced democratic states at the heart of the EU. The emergence of these European OJs is puzzling in terms of existing theories of offshore finance and raises questions about these jurisdictions’ historical origins and institutional trajectories. This project uses process tracing to investigate the historical and institutional trajectory of one particularly prominent European OJ: the Netherlands. It has three specific aims: to develop a deep understanding of the process of offshorization as it took place in the Netherlands, to contribute to wider theoretical debates about globalization and international tax competition, and to illuminate the role of offshore jurisdictions in the emergence of the shadow banking system. Project duration: January 2016 to March 2019.