Economics & Finance / Macroeconomics / Fiscal Policy & Government Spending

Selfish Governments in Tax Competition: How They Use Spending to Steal Your Capital

Selfish Governments in Fiscal Competition for Capital

Claudia Hensberg

Why do some countries attract massive foreign investment despite high taxes? The answer lies in a hidden strategy: governments use public spending as a weapon in the global battle for capital. This video unpacks the counterintuitive findings from Claudia Hensberg's book 'Selfish Governments in Fiscal Competition for Capital.' We reveal why tax cuts aren't the only game in town—and why self-interested (Leviathan) governments might actually prefer spending over tax breaks. Discover how infrastructure, legal protection, and other public intermediate products become strategic tools to lure businesses. Plus, we expose the surprising truth about tax harmonization: it might not solve the problem but instead trigger a spending war. If you think you understand global tax competition, think again. This is the video that will change how you see government policy.