Tuesday, September 8, 2009

so what if everyone's in the informal economy?

Every man, woman, and child in Pakistan is a tax cheat. That's the conclusion of a World Bank study disclosed by The News, a Pakistani paper. This means that all businesspeople in the country are, in a way, part of the informal economy.


Diane said...

The informal economy may be a vital safety net but Pakistan is an example of the "so what" when it comes to education: No taxes, no public funding of schools, parents must send children to private schools, some of which promote extremism...Perhaps a government that taxes would be held to higher standards by the masses? Or perhaps not, witness our great healthcare system.

rn said...

Interesting point, Diane (and great addendum about health care here in the US).

Still, there is no evidence that I have seen that the people striving in the informal economy are sending their kids to schools that promote extremism.

And here's another thing: many people in Afghanistan say they don't like the Taliban, but they also say they appreciate their honesty. That's because, when Taliban leaders tell you they're going to build a school, you get a school. When the government says it's going to build a school, most of the money seems to disappear before any construction starts.

I'd say that if governments want people to pay taxes, or move their businesses into the formal economy, they have to prove that there's a direct benefit.

Diane said...

I never know whether to comment on such an old post but this BBC program seemed relevant: http://www.bbc.co.uk/programmes/p0053gm0

I don't think parents knowingly send their children to such places but the schools apparently do exist.

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