Stabilizing the international financial system and financing development: an analysis of the Tobin tax

This paper analyzes the feasibility of an international tax on currency transaction, also known as "Tobin Tax", from an economic and juridical point of view. The claim that such a tax would curb short term speculators, thus stabilizing the foreign exchange market, is discussed. Moreover, the potential revenues of such a tax are evaluated, along with some possible needs these revenues could address: financing developing and the attainment of the Millennium Development Goals, and global public goods. Part one focuses on the thirty-year-old academic debate sparked by James Tobin's proposal; part two describes the features of an hypothetical Currency Transaction Tax (CTT), while part three analyzes how a CTT could be implemented both within the European Union framework, or more generally through an ad hoc international organization.