Offshore Finance and State Power

Offshore financial centers such as Luxembourg, the Cayman Islands or the City of London provide non-residents with a legal framework that is strong on property rights and soft on taxation and regulation. Building on a historical-institutionalist comparison of Britain, Germany, Brazil, and Mexico, Offshore Finance and State Power asks how these offshore financial services affect the power of the state. Combining a concept analysis with empirical research, the book finds that economic actors go offshore to create money more than to hide it. Legal offshore banking trumps tax planning or money laundering in its impact on state power.

Offshore Finance and State Power also reveals that the relationship between the two is not straightforward. Offshore finance can limit state power by transmitting the volatility of unregulated offshore banking into the domestic economy. Yet, counterintuitively, offshore finance can also enhance state power. It provides governments with an extraterritorial vehicle to cover up political conflicts over how to finance the state and to mitigate class conflict. To which extent a state can put offshore finances at its own service, depends on a country's domestic elite constellation and the tax and bank bargains they have forged throughout history.

Andrea Binder, Freie Universität Berlin

Andrea Binder is a Freigeist Research Group Leader at the Otto Suhr Institute of Political Science at Freie Universität Berlin. She is also a non-resident fellow at the Global Public Policy Institute (GPPi). Her research focuses on global finance, money, and humanitarian politics. Andrea holds a PhD from the University of Cambridge, where she was a Gates Cambridge Scholar. She received her M.A. in political science, economics and rhetoric from the University of Tübingen. She was a visiting scholar at the Centro de Investigación y Docencia Económica (CIDE) in Mexico and the Fundação Getúlio Vargas (FGV) in Brazil.

Acknowledgements
I Introduction
Researching the offshore world
The argument in brief
II State power in the age of offshore finance
Money
State power
Offshore finance
The encounter
Studying state power in the age of offshore finance
III Britain: Heartland of offshore finance
British state power from the money view
Contemporary exposure to offshore finance
The encounter
IV Germany: The tax state and its adversaries
German state power from the money view
Contemporary exposure to offshore finance
The encounter
V Brazil: Inflation and Eurodollar dependency
Brazilian state power from the money view
Contemporary exposure to offshore finance
The encounter
VI Mexico: Power without plenty
Mexican state power from the money view
Contemporary exposure to offshore finance
The encounter
VII Conclusion
How offshore finance affects state power
Making offshore finance work for the state
Institutions matter
Beyond the money view
Appendix I
Bibliography