Fungible goats

Stephanie Flanders puts her finger on an important point about the MPs’ expenses farce:

if you give someone £100 to buy a chair, you can’t say for sure that he bought a chair with your money – even if he shows you the chair, and a receipt. All you can say for sure is that you made him £100 better off, and he has bought a new chair…If, like so many MPs, your MP has claimed the full amount – around £24,000 in the most recent year, then the point to note is that he or she has had £24,000 a year more to spend…David Cameron could be spending his allowance on underground swimming pools and platinum cycle helmets. All we know is that he has utility bills and mortgage interest to pay of more than £20,000 a year…”When you give $1bn to a developing country”, a World Bank economist once said to me, “you may think you’re giving $1bn to your pet project, but the reality is you’re giving it to the president’s.”

Well put. In other news, Stephanie is in a play about goats.

Tim Harford’s blog

This blog is no longer updated but it remains open as an archive.

Tim, also known as the Undercover Economist, writes about the economics of everyday life.