Paper short abstract:

We investigate the role of tax havens in blocking development by enabling multinational companies to shift their tax base out of developing countries. We focus specifically on extractive industries and the energy sector.

Paper long abstract:

Recent years have seen dramatic decreases in the profits that multinationals report an pay tax on in developing countries, and especially so in extractive industries. We analyze this heterogeneity in reported profits of multinationals owned from tax havens and other multinationals to estimate how much corporate profit is shifted. We combine this data with information on financial secrecy, effective tax rates, foreign direct investment and other data. We discuss which policy responses would adequately address these injustices and contribute toward a more inclusive and sustainable development.