Tuesday, October 13, 2015

Happiness, quality infrastructure, and tax evasion

I have always sustained that the quality of a country’s infrastructure is an indicator of its economic and social development. Moreover, spending on infrastructure is anticyclical and as long as it is financed from monies set aside for a rainy day (and not through borrowing or higher taxes), infrastructure spending withers the rollercoaster effects of the economic cycle.

But it is much more than that: as infrastructure development is a question of public choice, its quality represents the value citizens ascribe to the quality of life in general and their content with taxation and the performance of the public administration. Such perceptions lower citizen’s propensity to tax evasion. Simply put, the taxpayer feels he gets back value for his money. HH