Break Through Rational Ignorance of Voters

It is necessary to break through rational ignorance of voters, economists think

The conclusion of Prague economic conference, organized on the occasion of THE TAX FREEDOM DAY 2013 with the support of Friedrich Naumann Foundation, was quite clear: “We have to beat rational ignorance of European voters.”

Economists from four CEE think-tanks participating at the 4LIBERTY.EU platform, Juraj Karpiš from INESS (Slovakia), Kaetana Leontjeva from LFMI (Lithuania), Magdalena Prasol from Liberté (Poland) and Aleš Rod from Liberalni institut (Czech Republic), presented recent situation in their countries related to public finance, political situation and level of rational ignorance of tax-payers.

Juraj Karpiš told the audience about the tax-irresponsible behavior of Robert Fico’s government. Analysts expect that especially the increase of corporate income tax will influence Slovak economy in a bad way. Juraj Karpiš also presented educational projects of INESS used as channels for communication with Slovakian taxpayers. Especially a set of viral videos, the campaign RICHER SLOVAKIA, was an excellent example how to force people to think about taxation and sources of public goods. The work of INESS was highly appreciated by all participants of the event.

The second speaker, Kaetana Leontjeva from Lithuanian Free Market Institute, spoke about public finance in Lithuania under tax reform that has been passed in 2008. The changes can be marked as negative ones because higher level of taxation has not brought more revenues to the treasury. Nevertheless, it has enlarged the shadow economy share. “Nowadays, Laffer curve does operate in Lithuania,” Kaetana said. She also shared experiences with argumentation against public finance myths (e.g. small taxes, small public expenditures, rich people contribute a too small amount of money, etc). Considering these myths, LFMI is very active and uses various projects to refute them.

Magdalena Prasol (Liberté!) described benefits of the 4LIBERTY.EU web portal. This website publishes high quality comments, analyses and articles in English, all written by various experts from numerous countries from the CEE region. It is great to hear that the portal increases its outreach and visitors are used to visit the web on a regular basis. Liberal ideas need to be shared and this international website is a good place for doing that, Magdalena said.

Aleš Rod, affiliated with CETA & Liberalni institute, Prague, set the problem of public finance to a playground of economics – to economic analysis of individual’s behavior. The main issue is called rational ignorance. A barrier of ignorance increases as well as a public finance system becomes more and more complicated in European countries. The ignorance of voters helps politicians, rent-seekers, corrupters and other individuals who make economy of the state less and less efficient. Free-market supporters are often locked in s circle with people with the same ideas and opinions; this weakens European liberalism very much. “We have to step outside the circle and try to break through rational ignorance. Only a big effort will bring pay-offs,” Rod pointed out.

In the Czech Republic, Liberalni institut has launched a brand new project – THE TAX BURDEN CALCULATOR. This project was introduced to the participants by its co-author Lída Hadincová, analyst of Liberalni institut.

The event can be evaluated as a very successful one; the media outreach was wider than the organizers expected and ideas arising from both presentations and discussion will bring new impulses to all think-tanks.

The event was organized with support of The Friedrich Naumann Foundation.

In Prague, 11/06/2013.

Liberalni Institute