TY - JOUR
T1 - Implementing problematic tax regulation: Hysteresis and bureaucratic revolutionaries within tax administrations
AU - Ormeño-Pérez, Rodrigo
AU - Oats, Lynne
N1 - Publisher Copyright:
© 2022 British Accounting Association
PY - 2023/5
Y1 - 2023/5
N2 - Worldwide emerging demands for additional and more sophisticated regulation are triggering regulatory changes at the national level that not all tax authorities are prepared to implement effectively. We examine this phenomenon through a single case study concerned with the implementation of the problematic transfer pricing rule by the Chilean tax authority. Drawing on semi-structured interviews, other qualitative sources, and inspired by the lesser used Bourdieusian constructs of hysteresis and bureaucratic revolutionaries, we unravel the emergence, persistence and resolution of hysteresis, i.e., a misalignment between tax administration practices and the expectations imposed on that organisation within the broader tax field. The paper finds that attempts to internationalise the tax system when regulators were inexperienced gave rise to hysteresis. It also explores how the standard of the rule, in conjunction with other structural conditions, influenced the decisions of senior tax officials, thus contributing to the persistence of hysteresis within the tax authority. Finally, it illustrates how one very senior tax official, with an interest in the regulation, acted as a bureaucratic revolutionary to resolve hysteresis and make the rule work in practice.
AB - Worldwide emerging demands for additional and more sophisticated regulation are triggering regulatory changes at the national level that not all tax authorities are prepared to implement effectively. We examine this phenomenon through a single case study concerned with the implementation of the problematic transfer pricing rule by the Chilean tax authority. Drawing on semi-structured interviews, other qualitative sources, and inspired by the lesser used Bourdieusian constructs of hysteresis and bureaucratic revolutionaries, we unravel the emergence, persistence and resolution of hysteresis, i.e., a misalignment between tax administration practices and the expectations imposed on that organisation within the broader tax field. The paper finds that attempts to internationalise the tax system when regulators were inexperienced gave rise to hysteresis. It also explores how the standard of the rule, in conjunction with other structural conditions, influenced the decisions of senior tax officials, thus contributing to the persistence of hysteresis within the tax authority. Finally, it illustrates how one very senior tax official, with an interest in the regulation, acted as a bureaucratic revolutionary to resolve hysteresis and make the rule work in practice.
UR - http://dx.doi.org/10.1016/j.bar.2022.101147
U2 - 10.1016/j.bar.2022.101147
DO - 10.1016/j.bar.2022.101147
M3 - Article
SN - 0890-8389
VL - 55
JO - The British Accounting Review
JF - The British Accounting Review
IS - 3
M1 - 101147
ER -