Racing to the Bottom? Provincial Interdependence in the Canadian
Federation, Kathryn Harrison, ed., Vancouver: UBC Press, 2006, pp.
305.
There is a widely expressed concern that technological changes and
lower barriers to trade and investment have reduced governments'
ability to impose taxes on mobile inputs, such as financial capital or
venture capitalists, and this will constrain their ability to provide
basic public services and redistribute income. These forces are often
described as producing a “race to the bottom,” in which
governments compete through their tax, regulatory, and expenditure
policies to attract footloose investments.