Adding ethics to public finance

    Evolutionary moral psychologists point the way to garnering broader support for fiscal policies

    Policy decisions on taxation and public expenditures intrinsically reflect moral choices. How much of your hard-earned money is it fair for the state to collect through taxes? Should the rich pay more? Should the state provide basic public services such as education and health care for free to all citizens? And so on.

    Economists and public finance practitioners have traditionally focused on economic efficiency. When considering distributional issues, they have generally steered clear of moral considerations, perhaps fearing these could be seen as subjective. However, recent work by evolutionary moral psychologists suggests that policies can be better designed and muster broader support if policymakers consider the full range of moral perspectives on public finance. A few pioneering empirical applications of this approach in the field of economics have shown promise.

    For the most part, economists have customarily analyzed redistribution in a way that requires users to provide their own preferences with regard to inequality: Tell economists how much you care about inequality, and they can tell you how much redistribution is appropriate through the tax and benefit system. People (or families or households) have usually been considered as individuals, and the only relevant characteristics for these exercises have been their incomes, wealth, or spending potential.

    There are two — understandable but not fully satisfactory — reasons for this approach. First, economists often wish to be viewed as objective social scientists. Second, most public finance scholars have been educated in a tradition steeped in values of societies that are WEIRD (Western, Educated, Industrialized, Rich, and Democratic). In this context, individuals are at the center of the analysis, and morality is fundamentally about the golden rule — treat other people the way that you would want them to treat you, regardless of who those people are. These are crucial but ultimately insufficient perspectives on how humans make moral choices.

    Evolutionary moral psychologists during the past couple of decades have shown that, faced with a moral dilemma, humans decide quickly what seems right or wrong based on instinct and later justify their decision through more deliberate reasoning. Based on evidence presented by these researchers, our instincts in the moral domain evolved as a way of fostering cooperation within a group, to help ensure survival. This modern perspective harks back to two moral philosophers of the Scottish Enlightenment — David Hume and Adam Smith — who noted that sentiments are integral to people’s views on right and wrong. But most later philosophers in the Western tradition sought to base morality on reason alone.

    Moral psychologists have recently shown that many people draw on moral perspectives that go well beyond the golden rule. Community, authority, divinity, purity, loyalty, and sanctity are important considerations not only in many non-Western countries, but also among politically influential segments of the population in advanced economies, as emphasized by proponents of moral foundations theory.

    Regardless of whether one agrees with those broader moral perspectives, familiarity with them makes it easier to understand the underlying motivations for various groups’ positions in debates on public policies. Such understanding may help in the design of policies that can muster support from a wide range of groups with differing moral values.

Adapted from: https://www.imf.org/en/Publications/fandd/issues/2022/03/Addingethics-to-public-finance-Mauro

Dear Madam:

I have been shown in the files of the War Department a statement of the Adjutant-General of Massachusetts that you are the mother of five sons who have died gloriously on the field of battle. I feel how weak and fruitless must be any words of mine which should attempt to beguile you from the grief of a loss so overwhelming. But I cannot refrain from tendering to you the consolation that may be found in the thanks of the Republic they died to save. Hence, I pray that our Heavenly Father may assuage the anguish of your bereavement, and the solemn pride that must be yours to have laid so costly a sacrifice upon the altar of freedom.

Your very sincerely and respectfully,

Abraham Lincoln.

(Lederer, Richard. The miracle of language. Pocket Books, New York, NY.)

The Story Behind TIME’s ‘Resilience of Ukraine’ Cover

(Artwork by JR; Photograph by Artem Iurchenko. A drone was used to capture the cover image on March 14 in Lviv.)

    Since Russia’s invasion began, dozens of Ukraine’s 7.5 million children have been killed and thousands of others have fled in search of safety. Among those thousands is 5-year-old Valeriia from Kryvyi Rih, President Volodymyr Zelensky’s hometown in central Ukraine. Her image – a smiling child – appears on one of this issue’s covers.

    If you met Valeriia, you might think she’s shy, her mother Taisiia told TIME, but don’t be fooled; at home, she commands attention. She loves the same things as many little girls – her stuffed bunny; her Elsa doll fromCold Heart(which English speakers know as Frozen); and her pink backpack, which she had to leave behind as she ran off her country. Valeriia also has big dreams: in particular, starting her first year of school on Sept. 1. Now, it’s hard to say when and where Valeriia will be able to do so. On March 9, mother and daughter fled to Poland; for safety, they asked that TIME use only their first names. In an interview, Taisiia explained her decision to leave home to keep her child safe. “She is my sunshine, my joy.”

    According to Taisiia they woke up early in the morning of Feb. 24 to learn the occupying army had started bombing military bases. “I thought about my daughter, Valeriia; for her safety, I knew we had to go. We left Ukraine before we were bombarded, so we had a chance.” Even though Valeriia is with her now, husband and son stayed in Ukraine and therefore, it was very hard to leave. The day they left, the lines for buses and trainsstretched 3 km, mostly women and children, she says, “We were packed together and had to stand for 18 hours on the train to Lviv”.

    The Russians still haven’t come to their city. The people from Kryvyi Rih have fought them off. But they are closer and closer, and you can see them approaching. In the media, Russia says they aren’t at war in Ukraine. But the war is real. People are dying for real. “And here I am, with my sister, my nephew, and my mother in Poland, in a hotel near Warsaw. They take care of us and even in this difficult situation, it was a warm reception. I cannot find the words to express how grateful I am to everyone who has helped”, ends up a crying Taisiia.

(Available: https://time.com/magazine/europe. Adapted.)

Ten critical actions needed to address four major cybersecurity challenges:

Cybersecurity: An overview of cyber challenges facing the nation, and actions needed

Federal agencies and the nation’s critical infrastructure — such as energy, transportation systems, communications, and financial services — depend on Information Technology (IT) systems to carry out operations and process essential data. However, the risks to these IT systems are increasing—including insider threats from witting or unwitting employees, escalating and emerging threats from around the globe, and the emergence of new and more destructive attacks. Rapid developments in new technologies, such as artificial intelligence, the Internet of Things, and ubiquitous Internet and cellular connectivity, can also introduce security issues. Over 28,000 security incidents were reported by federal civilian agencies to the Department of Homeland Security in FY 2019.

Additionally, since many government IT systems contain vast amounts of personally identifiable information (PII), federal agencies must protect the confidentiality, integrity, and availability of this information—and effectively respond to data breaches and security incidents. Likewise, the trend in the private sector of collecting extensive and detailed information about individuals needs appropriate limits.

To highlight the importance of these issues, Government Accountability Office (GAO) has designated information security as a government-wide high-risk area since 1997. This high-risk area was expanded in 2003 to include the protection of critical cyber infrastructure and, in 2015, to include protecting the privacy of PII.

GAO has made about 3,300 recommendations to federal agencies to address cybersecurity shortcomings—and we reported that more than 750 of these had not been fully implemented as of December 2020. We designated 67 as priority, meaning that we believe they warrant priority attention from heads of key departments and agencies.

Adapted from: https://www.gao.gov/cybersecurity. Available on November 16th, 2022