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Informal entities and the tax unit: The impact of social institutions on tax design


Douglass C. North presented the seminal work on institutions and their relationship to economic performance. Essentially, institutions are “humanly devised constraints that shape human interaction”. An institution may be created by the state on the one hand (for example, statute law) or on the other hand by norms of social interaction, custom, traditions and codes of conduct. The former are formal institutions while the latter are informal or social institutions. To elucidate a social institution can be defined as “a complex of positions, roles, norms and values lodged in particular types of social structures and organising relatively stable patterns of human activity with respect to fundamental problems in producing life-sustaining resources, in reproducing individuals, and in sustaining viable societal structures within a given environment.”.

Author profile:

Nolan Sharkey
Nolan is a Barrister at Francis Burt Chambers and Winthrop Professor of Law at the University of Western Australia (UWA). He is also Professorial Fellow in Taxation at Atax, University of New South Wales and has a professional Sydney base at Clarence Chambers. He is a Fellow of the Institute of Chartered Accountants and a tax agent. He holds a PhD in Law, a Juris Doctor with First Class Honours and a Master of Tax from UNSW. He holds additional qualifications in Accounting, Asian Studies, Psychology and Law. He has been involved in the tax advice industry for two decades and has been a tax academic for 14 years. He has taught postgraduate tax courses at Atax in international anti-avoidance, double tax agreements, international tax, Chinese tax, offshore financial centres and trusts. He currently teaches tax at UWA to students in the Law and Business faculties. He is an examiner in Singapore taxation for the Chartered Institute of Taxation in London. He has published widely on Australian international tax and Chinese tax. Current at 15 April 2015 Click here to expand/collapse more articles by Nolan SHARKEY.
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