This post reviews the latest Paying Taxes report by the World Bank. It highlights a huge challenge for the EU, which aims to become the most competitive economy in the world, as very few of its member states have a globally competitive regulatory system. An analysis of the report’s figures shows the EU has attempted to build its success on efficient corporate tax systems, while labour taxes remain hugely inefficient. Read more
To an economist, “inferior goods” are those we switch away from as we become richer. Between 2000 and 2008, Europeans became 14% richer, while the typical European government increased its share in the economy from 44.7% to 45.4%. The two fastest growing economies, however, the Slovak Republic and Ireland, had exactly opposite experiences, with the Slovak government now the smallest in Europe. It turns out that these countries aside, poorer countries generally saw their governments grow, while wealthier European states saw their governments shrink. Read more
Following last weekend’s European elections, commentators have highlighted a general move to the right and the usual protest vote. An examination of country-level results reveals that the move to the right may be driven more by punishment of governing parties for economic failures than any idealogical shift. Read more