Do their Interests Matter? Finance Ministers and Tax Policy

Wealth and income inequality have been rising since the nineteen eighties. Though technology and globalisation are major drivers, financial deregulation, tax cuts in income and capital gains are no less responsible for this rise. What is the role of the men and women who set the rules of the game and the tax rates? Does their personal wealth and private, professional career bias tax policies, above and beyond the government’s policy agenda? Using the Who Gov data to identify the finance ministers in 50 democracies across continents and over a period of 15 years, we collect their biographical data, including their gender, age, place of birth, education (including the educational categories of any degrees attained), prior professional experience (including their first job after school and last job before entering politics), post-professional experience, non-occupational experience (including their experience in trade unions, voluntary sector, and other interest groups), various political career variables, and several wealth-related variables. We further expand our dataset by coding whether ministers held board memberships at any point in their careers, relying on publicly available information and Boardex. Using these data, this paper analyzes the relationship between finance ministers’ professional and economic interests and the tax policies they undertake while in office. The central hypothesis of the project is that finance ministers own interests as well as their perception of what is optimal economic policy is likely to be biased by their past profession as well as their current and future roles within the financial and corporate world. Preliminary results suggest a robust correlation between tax cuts while in office and subsequent post-office careers in the finance sector.