This is a cult scene from the movie “La Grande Vadrouille”. A German artilleryman has so many horizontal eyes that he fires at his army planes and thus allows Louis de Funes and his allies to fly for freedom.
Half a century later, this scene is often repeated. The landscape is fortunately more peaceful: weapons no longer send bullets, but public money. But the cause and effect are the same: the soldier is shady and the target is a great miss.
Flying felt difficult
Of course, Economy and Finance Minister Bruno Le Mayer does not have the strabismus that Michel Modo, who plays a German soldier in Gerard Ori’s film. But he knows it’s hard to aim well. He acknowledged that in the case of the food test, Emanuel Macron had promised at the end of 2020 that it would be “complicated to implement”.
In the beginning, however, the rulers wanted to make everything better. They are experiencing a shock – such as the current spike in energy and food prices, which is being felt in the least preferred households. And they legitimately try to alleviate it.
Blocking and watering
The government has a number of tools to overcome the price shock. The first is to lock those prices. Measurements may be effective in the event of a temporary shock. But today it would be hasty to bet on the brutal fall in energy and food prices, as the world’s top wheat, gas and oil exporter is plunged into a war that excludes it from the international community.
Once the shock is no longer temporary, the freezing of prices always has a catastrophic effect, the most common of which is rationing. So that’s not the solution.
Often systems fail to reach those who benefit the most and benefit others who need them the least.
The second tool is watering. The government has recently provided 100 euros inflation allowance to 38 million people. He also reduced taxes on electricity and petrol.
The genius of technocrats
However, these measures very quickly come up against a conflict. They have a limited effect… or cost a fortune. We have seen it in captivity with partial unemployment. The tariff and resilience plan will cost more than 20 billion euros this year to be decided by the government alone. Without rejecting criticism from opponents who seek to denounce a force sacrificing purchasing power.
Therefore, the use of targeting, the third tool available, seems obvious. Better a poor horse than no horse at all. Bersi technocrats like this argument. They have a tremendous talent for targeting public spending, which brings in far less money than expected, even if it has far less impact than the announcement.
Two goals at once
This is where the soldiers of “La Grande Vadroil” return to the scene. Because it is very difficult to aim well. Often systems fail to reach those who benefit the most and benefit others who need them the least. Or the gunman tries to hit two targets at once, which is the best way not to hit. According to the great text of Jan Tinbergen, who was the first winner of the so-called Nobel Prize in Economics in 1969.
Today, with the help of a lot of data and artificial intelligence, it will undoubtedly be possible to target more precisely.
An example is the army. The most classic is the reduction of the first bracket of income tax, which the government wants to support the less affluent. Since one of the two households is not taxable, this measure means that the upper half of the income benefits the households the most.
French product arrows
Energy checks, created in 2015 to help low-income families pay their energy bills, often miss the mark. The Court of Auditors issued a bloody ruling last February, stating that “the only standard maintained by government authorities – the standard of living of family members – makes its goal setting ineffective.”
It can be the same for food testing. Not to mention the added inconvenience caused by the desire to drive him towards good quality French products.
And good aiming is not enough to hit the target. A survey on RSA (Revenu de solidarité active) shows that in 2018, “one third (34%) of households eligible for RSA will be non-recipients every quarter, and one in five (20%) for three will be quarterly. “.Who among those who will need this allowance the most, such as homeless.
Aim more precisely?
This is not all new. Antoine Math, a researcher in Ires (an economic study institute near a trade union), noted in a comparative study of social benefits already published nearly twenty years ago: It’s even the opposite.
By adding environmental change to the picture, good aiming becomes more complicated. Should we really help all the big wheelers, as the government seems to want to do?
Today, with the help of a lot of data and artificial intelligence, it will undoubtedly be possible to target more precisely. But complete transparency will lead to dictatorship. Government authorities will therefore continue to squint. After all, that doesn’t stop us from acting … while being aware of the limits of the target.