s to search for evidence of effective tax competition (Devereux et EFTA00317181 CDP BACKGROUND PAPER NO. 24 al., 2008; Huizinga and Laeven 2008; Marceau et al., 2010; Paeralta et al., 2006; Wilson and Wildasin, 2004). To get a handle on the question, one must consider the interplay between the deci