It was Montesquieu – political philosopher, sometime judge – who said that, as a writer, his goal was not to make people read, but to make them think. Days after finally putting this intense monograph to one side, the aphorism keeps coming back to my mind. A close reading of Dagan's text reveals an intellect of great subtlety, of great breadth and depth. To say it were thought-provoking would barely give the book its due. In its range of reference, and its patiently detailed insights, the book is exemplary.

Dagan's theme is the problem of taxing the huge amounts of income generated by the cross-border activities of multinational groups. The widely-held view is that, if the accumulated residue of national legislation, international treaties, judgments, commentaries, reports and so on, constitutes a system for taxing that income, that system is a mess. Not only is it a mess, but it is an unjust mess. Dagan shares this view (p. 140). Indeed, the various OECD-inspired cooperative attempts to make the system cohere, few of which have explicitly taken “global justice” as their starting point (p. 186), have probably not helped. We are left, so people might say, with “carrion comfort”, with the necessity of suggesting often only vaguely plausible ways of making things better. There is nothing to warm a cosmopolitan heart, nothing to give the finance minister of a cash-strapped state any likely tax-policy objective that would do some good.

Dagan does, though, seek to make a plausible suggestion for improvement. The assumption has long been that the coordination of a coherent international tax system is necessary to prevent a frantic international struggle, to attract inward investment and to facilitate redistributive national tax policies and welfare states. That struggle was what, two decades ago, the OECD called “harmful tax competition” (p. 151). The assumption, Dagan argues, has been profoundly damaging to any prospect of global justice. In the latter prism, things would be better if there were more, not less, tax competition (pp. 53, 60). But there would need to be true competition: transparency; more distributive justice; and, most ambitiously, an international agency to break the tax-policy cartels of powerful states. For this is the motor of the book: competition between states to offer the most attractive tax policies is good. It just needs to be perfected. Cooperation, by contrast, long thought to be the right answer, is at best ambivalent (pp. 68, 108), at worse downright damaging to the interests of poorer states (p. 78 and ch. 4), who are gulled into going along with it (p. 79). This argument is both counter-intuitive and intriguing. To get there, the author has to lead the reader through six layers of analysis. The premise is that states are competitors in a global marketplace of tax regimes that can be “unbundled” to suit, by well-advised and mobile corporate groups and individuals (pp. 13–14, 31). Since states are competing to “recruit” both inward investment and desirable residents, they cannot afford their citizens the benefit of redistributive tax policies (ch. 1). That this situation has developed is a historical accident, born of the system of double taxation conventions (DTCs) originated by the League of Nations in the 1920s and perpetuated by the OECD. Most states, and their citizens, would be better off if they settled the problem of the double taxation of cross-border income, not by treaty, but unilaterally (ch. 2). They cannot do so, though, because of the web of DTCs on broadly the OECD model. These are such as to arrogate public revenue to capital-exporting, developed states, rather than to capital-importing, developing, ones. They have produced, not only “regressive redistribution”, but a space where sophisticated tax advisers can play (ch. 3). In its turn, OECD cooperation on double taxation has led, first, to the cooperation on harmful tax competition (1998), then to automatic information-exchange (2002 onwards), then in 2015 to cooperation on base-erosion and profit-shifting (BEPS). All of this has become highly dangerous to newcomers, as a network analysis shows (ch. 5). Tragically, that does not stop capital-importing states from signing DTCs, thereby gaining international respectability (pp. 106–07, 119) but only marginal economic benefit (chs. 4 and 5). Developing states lack, says Dagan, the incentive to cooperate among themselves (p. 179). To make the situation better, we need to recognise some rule of global distributive justice that a truly competitive global cooperation might further (ch. 6).

So stated, the broad outlines of the argument demonstrate the subtlety of the book's subtitle. Dagan advocates a method, a disposition, an approach to take (with suggestions), not really a blueprint. Tax competition, properly understood, is not the bad it was once thought to be. Coordination of international taxation is not the unqualified good that might be imagined (p. 207). Between them, though, sits the possibility, for Dagan, of truly competitive coordination, of a perfected international tax market, attentive to distributive injustices and policed – perhaps – by a global tax antitrust body (pp. 242–44). The problems of taxing rights that favour capital exporters and the disadvantages to latecomers, and capital-importers, of cooperation are a “market failure” (pp. 234–42).

To make this argument, Dagan takes two standpoints, using two different intellectual traditions. One, deployed for instance in ch. 2, is game theory. Another, which shapes ch. 6, is normative political theory. This combination gives rise to a concern. Although introduced for good reasons, I am troubled about whether and, if so, how, these relate to each other. In ch. 2, game theory informs the forceful conclusion that capital-importing nations would be better off if there were no DTC network. As others have pointed out, the extent to which game theory is descriptive or, rather, prescriptive, or, indeed, whether it shifts uneasily between the two has never been clear. In ch. 6, normative political theory forms the basis of an argument that to recover their own legitimacy as raisers of taxes, under the competitive conditions discussed above, states must adopt the broadly civic – republican values of Barry, Beitz, Cohen, Nagel, Pogge, Sandel and so on. The snag is that such values are often, though not always, set up in direct challenge to economic calculi of the type invoked in ch. 2. I wonder about the necessity of this disjunction. The departure-point, which perhaps might more forcefully have been underlined, is this. Should we try to do what is just, or what is to our advantage? What is to our advantage is not automatically simply amoral. It might, for sure, denote merely a Machiavellian will to power (a close analogue, indeed, to the assumptions of game theory), but it might, too, be a Humeian utilitarianism. The largely North American tradition of political theory that Dagan draws on regards political theory as a branch of moral philosophy (p. 191). It might perhaps have been better, in the interests of consistent standpoints, to enlist other, politically self-contained, theories – possibly from international relations – to complement the game theory of ch. 2. Greater global justice then looks more prudential than ethical, calculating rather than high-minded. But it might give just as good a result as ethics and high-mindedness might do. Policy results, based on strategic cooperation, are clearly what Dagan is interested in.

Another concern, which runs across the two standpoints just summarised, is the relation of economic theory to politics and diplomacy. The political theory of ch. 6 sits uneasily with the rest. The game theory of ch. 2, and indeed the network theory of ch. 5, seems consistent and plausible. The former yields, not a suggestion about “how to do” the politics and the diplomacy, but an idea of what would be good, and true, in political-theory terms (p. 189). The latter describes, or maybe suggests, those elements that an economist would describe as “a stable equilibrium”, a political philosopher as stasis. If economic theory is, as some argue, a simulacrum of Enlightenment natural law, it embodies a tension between states of affairs as they are, and as they ought to be. But while, as in the essentially private-law musings of the law-and-economics-tradition, economics can offer both yardstick and solution on the effects of particular cases, it cannot plausibly tell us how to legislate and conclude treaties. And this, perhaps, accounts for the shadowy presence of the practices of politics and of diplomacy throughout the book. Again, perhaps the practices of politics and diplomacy might have been given more prominence in saying what politicians and diplomats might do with the game and network theory conclusions. Whilst that would not necessarily illuminate the market failure of flawed international cooperation, it might just cast light both on promoting distributive justice and on setting up the envisaged international agency.

It is the absence of practical politics and diplomacy, which leads to another concern. It is one thing to say that tax is politically significant, which Dagan does (p. 21). It is another to say how economics might be used in political and diplomatic practices. The characters in Dagan's argument are states, incentivised to attract investment and residents (p. 197). The deals states have cut (p. 19) about “the distribution of what” (that is, over the tax base) and “how much distribution” there should be (that is, tax rates) involve political judgment. The practical politics concerned and the diplomacy involved, to date and in the future, are only lightly addressed. However, whether analysed in political or political-economic terms, these practices must surely be important, not only to saying why states have been able to survive so long on this thin and rather unrewarding basis, but also for prospects of national and international redistribution.

Finally, there is a concern about the premise involved. Dagan's argument proceeds on the basis that the competitors in the market of global tax competition are sovereign states. That has always been the assumption underlying the tax-competition discourse. This resonates in a UK gripped by EU-secession. Yet there is a nagging doubt about the assumption. Suppose that, rather than a competition, the rivalry of states is best characterised as incipient, managed, conflict? Nicholas Shaxson, for one, has pointed out that “[c]ompetition between companies in a market is absolutely nothing like competition between jurisdictions on tax” (Treasure Islands: Tax Havens and the Men Who Stole the World (London 2012), 197). The “creative destruction”, he continues, that may cause the failure of a company in a market means that another, providing “better or cheaper goods or services” will rise in its place. Not so, with a state. When states fail, they may – or may not – be replaced by others. Destructive destruction, not creative destruction, is at stake. Given this, suppose the competitors in the “game” of tax competition, rather than being the states, are the businesses needing states for their nurture? Businesses, not states, compete, as economic commentators insist. If that is the case, “the currency of [tax] competition” is not tax as such (cf. pp. 25–26), the players not states. The currency is the relative level of investors' returns on investments in particular jurisdictions. And these investors, as Dagan indeed implies, through her unbundling analogy (pp. 13–14, 27, 30), might be anywhere. If this is the case, then there might still be life in an Oakeshottian “patient engagement” with BEPS, rather than ever more radical policy initiatives. Carrion comfort, indeed.

This book is already greatly admired and so the last concern is that what has been said here might detract from the reviewer's admiration. Not so. The intriguing thoughts the book provokes seem almost to fall over one another. As Montesquieu did not say: “I'm not dissin’ it.” This finely detailed book is guaranteed to get its readers thinking. Even now, there is a lot more to say.