Friday, January 11, 2013

Public Choice at Work: French Taxman Charged with Dodging Taxes

Outside the public’s glamorized view, political agents are innately self-interested people. That’s the essence of the Public Choice theory propounded by the late distinguished economist James M. Buchanan together along with Gordon Tullock.

As Professor William Shughart II explains
...public choice, like the economic model of rational behavior on which it rests, assumes that people are guided chiefly by their own self-interests and, more important, that the motivations of people in the political process are no different from those of people in the steak, housing, or car market. They are the same human beings, after all. As such, voters “vote their pocketbooks,” supporting candidates and ballot propositions they think will make them personally better off; bureaucrats strive to advance their own careers; and politicians seek election or reelection to office. Public choice, in other words, simply transfers the rational actor model of economic theory to the realm of politics.
For real life examples, we need to look no further than the recent reports, where a big league French bureaucrat, supposedly in charge of pursuing tax evaders, has been accused with the same offense.

From the CNBC.com,
The man at the forefront of France's fight against fiscal fraud is now one of those being investigated.

Budget Minister Jerome Cahuzac has spent months singling out corporate multinational tax dodgers, citizens who live abroad to avoid taxes and those within France who stash money in overseas accounts.

Now he is ensnared in just the sort of investigation he thought would help turn France's finances around, as prosecutors take a close look at an online journal's allegations that he transferred money from a Swiss account into one in Singapore.
That's why the world of politics involves numerous of conflict of interests. In the case above, the proverbial fox guards the hen house.

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