I happened to recently listen to Freakonomics episode 400 ("How to Hate Taxes a Little Bit Less") and it fascinated me.
Particularly in countries like India, where civic services are extremely poor, a tax payer feels like his or her taxes are being funnelled into a big black hole. The way it currently works is that you pay your taxes, and some opaque process involving central government bureaucrats, parliament, state government bureaucrats, state legislatures, city governments, councils, etc., attempts to funnel that money back into the hands of the local ward official. Remember, that same ward official's office is just around the corner from me, and he/she is responsible for fixing the potholes, keeping the streelights on, picking up garbage, maintaining my neighbourhood public park, etc. He feels no sense of responsibility or accountability to me, the tax paying resident of the ward, but rather to those who allocate his budget in city hall and above.
What if, instead, I could allocate a portion of my local taxes (say 50% of my property tax for example), to a specific set of heads? What if each department of the local ward office got 50% of their budget centrally and the balance from what citizens allocated to them? Then they'd have to show concrete results in our neighbourhoods. They'd have to hold community meetings in the community to explain what their plans are for next year and what they did with the money last year. They'd have to actually show results, because we'd move our money to the department that made the best use of the money we gave them. To avoid their spending a ton of money on publicizing their achievements, we'd restrict their marketing budget (perhaps just 5% of the total budget).
Radical idea, isn't it? I'd love to hear reasons why it might not work, so that I can refine this model.
Executive, entrepreneur, investor and mentor to social entrepreneurs, golf and squash addict, author of thrillers... In short, an amateur dabbler in new experiences, and provoker of thoughts.