Most researchers interested in the relationship between global markets and public policy focus on advanced industrial democracies. In contrast, we examine competing hypotheses as 10 globalization's effect on governments by expanding the scope of the discussion to include developing nations. More specifically, we investigate the relationship between international market integration and the evolving burden of taxation on capital, as well as the subsequent response of markets to shifts in tax policy in Latin America since the late 1970s. Consistent with our theoretical expectations, we find that global market forces are more constraining vis-à-vis tax policy in Latin America than in the world's wealthiest nations. Despite these market-based pressures, however, national politics continue to influence tax policy in Latin America in a manner consistent with findings on advanced industrial democracies. As such, developing nations continue to have some room to manipulate policy, though within the context of a more strictly neoliberal context than their counter-parts in advanced industrial democracies.