No food for lazy man: The struggle for corporation tax in undeveloped economies
Squeezing out corporate tax. Source: Stears Business


It is a classic case of the free-rider problem; a type of market failure that occurs when those who benefit from resources, public goods, or services that are a communal nature do not pay for them or under-pay. We (collectively referring to economists) dislike free riders because while not paying for the good, e.g. directly through fees or indirectly through taxes, they continue to access or use it. 

Companies, in this case, benefit from the infrastructure and support systems set up in a country and there are many equitable, practical, and political arguments for why they should pay tax e.g. growing inequality, the cost of doing business on the environment; and maintaining the infrastructure they need to grow. But when there is little to no infrastructure in the first place or the collection system itself is onerous, the incentive to pay tax is skewed, and you start to get

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Abdul Abdulrahim

Abdul Abdulrahim

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