This interdisciplinary study examines the impact of egoistic behavior on fiscal policy through a multi-layered framework combining institutional economics, political theory, postcolonial critique, behavioral psychology, and moral philosophy. It interrogates how fiscal systems—nominally tasked with redistributing resources, sustaining public goods, and promoting macroeconomic stability—are increasingly distorted by structurally embedded self-interest, elite capture, and systemic legal protection. Through a critical analysis of historical wealth accumulation, from colonial extraction to neoliberal globalization, the article contextualizes the emergence of egoism as a governing principle rather than a behavioral anomaly.

The research explores how firms and executive authorities co-opt fiscal mechanisms for private ends by drawing from Coase’s theory of the firm, Rawlsian justice, Becker’s human capital model, and North’s institutionalism. The case of Donald Trump’s presidency, particularly the 2017 Tax Cuts and Jobs Act and the Trump v. United States (2024) ruling on executive immunity, demonstrates how egoistic behavior has been legalized and incentivized at the highest level of governance.

Findings show that such regimes produce regressive tax structures, underfunded public services, ecological harm, and a breakdown in democratic trust. The article concludes by outlining pathways for fiscal reform grounded in ethical reconstruction, institutional accountability, and participatory democracy.

By synthesizing political economy, sociology, and law, this work provides not only a diagnosis of fiscal dysfunction but also a roadmap for restoring fiscal policy to its rightful place as a public instrument of justice, sustainability, and democratic solidarity.

1. Introduction

Fiscal policy, long regarded as a technical domain of macroeconomic management, has increasingly become a site of ideological contestation, institutional capture, and ethical crisis. At its normative core, fiscal policy is designed to serve collective needs through taxation, redistribution, investment in public goods, and economic stabilization. However, a growing body of empirical evidence and theoretical reflection suggests that egoistic behavior—rationalized self-interest pursued at the expense of the public good—is not simply present in fiscal systems but is structurally embedded within them (See Self-interest, Altruism, Egoism, Reciprocity, and Risk-Sharing in Digital Social Networks).

This paper critically examines how egoistic behavior, when legitimized by legal frameworks, incentivized by political structures, and normalized through economic ideology, distorts fiscal policy away from its foundational goals of equity, sustainability, and democratic accountability. The inquiry is motivated by the intensifying crisis of trust in public finance, the concentration of wealth and political influence, and the erosion of fiscal legitimacy in both democratic and postcolonial contexts.

Drawing on an interdisciplinary framework—spanning institutional economics (Coase, North), moral philosophy (Rawls, Singer), behavioral economics (Becker, Sen), and postcolonial political economy (Rodney, Fanon, Fraser)—this study traces how modern fiscal institutions have been co-opted to serve the strategic interests of a narrow elite. These dynamics are sharply illustrated by developments in the United States under the presidency of Donald J. Trump. His administration’s tax reforms, donor-driven tariff policies, and the legal shield provided by the 2024 Supreme Court ruling (Trump v. United States) offer a living case of how egoism becomes both actionable and unaccountable at the highest levels of fiscal governance.

Yet this phenomenon is not limited to any one country or moment. From austerity regimes in the Eurozone to extractive corporate practices in postcolonial states, the patterns repeat: fiscal tools are used not to repair social contracts but to reinforce economic hierarchies and silence political opposition. These practices are justified through appeals to efficiency, market rationality, or legal formalism—but their real effects are to redistribute upward, defer investment in future generations, and institutionalize inequality.

The research question guiding this study is therefore not only timely but foundational:

How does egoistic behavior—shaped by historical inequalities, institutional incentives, and political systems—impact the formulation, outcomes, and legitimacy of fiscal policy?

This question demands an empirically grounded, theoretically rich, and normatively explicit response. Above all, it requires an interdisciplinary lens capable of seeing fiscal policy not as a neutral ledger but as a moral terrain, a site of contest between solidarity and self-interest, justice and impunity (See Self-interest, Altruism, Egoism, Reciprocity, and Risk-Sharing in Digital Social Networks).

The structure of the paper reflects this ambition. Following a methodological exposition in Section 2, the study turns to the historical evolution of fiscal inequality, then builds a theoretical framework to interpret egoistic behavior as both strategy and structure. From there, it analyzes fiscal instruments and their governance, the distributional and societal consequences of egoistic regimes, and detailed case studies—including Trump-era policy and postcolonial fiscal asymmetries. The final sections propose normative and institutional pathways for reform, before concluding with a call to reclaim fiscal policy as an instrument of democratic dignity and ethical public life.

2. Research Design and Methodology

2.1. Framing the Inquiry

This study is anchored in the following research question:

How does egoistic behavior—shaped by historical inequalities, institutional incentives, and political systems—impact the formulation, outcomes, and legitimacy of fiscal policy, particularly in relation to equity, sustainability, and public goods?

The corresponding hypothesis posits that:

Egoistic behavior, when institutionalized within public and private fiscal architectures—through elite capture, executive impunity, and legal asymmetry—distorts fiscal systems away from justice and sustainability, exacerbating inequality and undermining democratic governance.

The research departs from traditional economic models that treat fiscal systems as exogenously neutral tools for optimizing macroeconomic outcomes. Instead, it treats fiscal policy as an institutionally mediated, ethically consequential, and politically constructed system—one that reflects and reproduces the power relations and normative values of the societies in which it operates.

2.2. Methodological Approach

The methodology is interdisciplinary, critical, and interpretive, combining:

Historical-institutional analysis: Tracing how fiscal institutions evolve from colonial, neoliberal, and executive-centered legacies (North, 1990; Rodney, 1972).
Normative theoretical evaluation: Applying ethical frameworks (Rawls, 1971; Fraser, 1995; Singer, 2011) to assess legitimacy and justice in fiscal outcomes.
Comparative case study methodology: Focusing on Trump-era U.S. policy, postcolonial resource governance, and Eurozone austerity to reveal egoistic patterns in context.
Critical legal and political analysis: Interpreting legal decisions such as Trump v. United States (2024) in terms of their institutional and fiscal consequences.
Behavioral-institutional synthesis: Merging Becker’s (1974) rational behavior insights with Sen’s (1977) critique of narrow egoism to understand policy actor incentives.

This methodology allows for multi-scalar analysis—from executive decision-making to transnational capital flows—without losing sight of ethical and distributive implications.

2.3. Theoretical Integration and Literature Framework

The theoretical framework draws upon foundational and contemporary thinkers, integrated to analyze the layered nature of egoism in fiscal policy:

Adam Smith (1776) argued that markets, when embedded in moral norms, could serve public good through the “invisible hand.” Yet modern firms, shielded from ethical obligation, distort this vision—transforming self-interest into unaccountable egoism, especially when coupled with fiscal power.
Thomas Hobbes (1651) viewed sovereign fiscal authority as necessary for social order. Today’s expanded executive discretion, however, resembles sovereign immunity divorced from public accountability, as seen in Trump v. United States.
John Rawls (1971) provided a foundational ethical standard for fiscal justice: that inequalities are only just if they benefit the least advantaged. Egoistic fiscal regimes invert this principle, concentrating benefits while externalizing harms.
Gary Becker (1964, 1974) and Amartya Sen (1977) offer contrasting views on rational self-interest. Becker’s framework helps explain why individuals and institutions act egoistically under certain incentive structures; Sen critiques the moral thinness of such models when applied to social policy and public finance.
Ronald Coase (1937, 1960) argued that firms exist to minimize transaction costs through internal coordination. But as firms have grown into fiscal actors—negotiating tax codes, shaping public budgets, and even participating in executive governance—their behavior demands public scrutiny through institutional economics and democratic theory.
Douglass North (1990) emphasized that institutions evolve not to promote efficiency per se, but to reflect and entrench dominant interests. In fiscal systems, this explains why elite interests are often structurally embedded, not merely accidental outcomes.
Nancy Fraser (1995) and Iris Marion Young (1990) argue for a justice framework that combines redistribution and recognition. In fiscal policy, both are absent when marginalized communities are taxed without services or excluded from budget deliberation.
Peter Singer (2011) and Kate Raworth (2017) extend ethical analysis across generations, showing that present fiscal egoism constitutes a direct harm to future well-being—via climate neglect, underinvestment in education, and sovereign debt.

2.4. Sources and Materials

This research is based on:

Primary legal documents: Including the Trump v. United States (2024) Supreme Court decision.
Policy texts: Such as the U.S. Tax Cuts and Jobs Act (2017), fiscal data from the IMF, OECD, and national budgets.
Empirical studies: Covering tax incidence, public spending patterns, and inequality metrics (Piketty, Zucman).
Theoretical texts: Core economic, philosophical, and institutional works as cited above.
Journalistic and investigative reports: Including documentation of donor influence, tariff exemptions, and deregulation under recent U.S. administrations.

2.5. Epistemological Consideration

This project is reflexive in its treatment of economics as a social science, not a value-free discipline. It resists economistic reductionism and instead views fiscal policy as a moral and institutional battleground, where rules reflect choices, and outcomes are laden with ethical consequences.

3. Historical Foundations of Wealth and Resource Distribution

The modern distribution of wealth and income cannot be understood without examining the historical systems that shaped access to the fundamental sources of economic power: labor, natural resources, capital, and human capital. Far from emerging through meritocratic competition or spontaneous market order, these resources have been unequally allocated through centuries of colonization, slavery, enclosure, conquest, and legal engineering. These historical processes established fiscal systems not to promote welfare or equality, but to extract, control, and consolidate power in the hands of ruling classes and imperial metropoles.

3.1. Fiscal Origins in Slavery, Colonization, and Annexation

Fiscal regimes were designed to sustain imperial economies from the late medieval period through the twentieth century. Enslaved labor formed the bedrock of wealth creation in the Atlantic world, with little to no compensation or public investment for the laboring classes. Colonial administrations imposed head taxes, hut taxes, and land rents to force market participation and extract revenues for imperial treasuries (Rodney, 1972; Fanon, 1963). These systems gave birth to dual fiscal states: one governing and investing in the colonizer, the other extracting and disciplining the colonized.

In settler colonies, indigenous land was converted into private property, commodified, and taxed, paving the way for capitalist development but simultaneously dispossessing native populations. Legal codes functioned as fiscal technologies, transforming communal or spiritual claims into taxable assets and rendering indigenous peoples fiscally invisible or criminally liable for resisting commodification.

3.2. The Post-Emancipation Continuum: Legal Dispossession and Wealth Protection

Even with the formal abolition of slavery and the end of colonial rule, the architecture of wealth protection for elites persisted. Inheritance laws, property titling systems, and selective fiscal exemptions ensured that wealth accumulated under unjust regimes could be legally retained across generations. The United States offers a particularly clear example: after emancipation, freed people were denied land, excluded from pension systems, and subjected to poll taxes and discriminatory assessments. Meanwhile, white landowners benefited from homesteading policies and favorable tax treatment.

This period also saw the emergence of what Fraser (1995) describes as “subaltern fiscal exclusion”—where certain populations are taxed but not served, visible only as revenue sources but not as participants in fiscal deliberation. In modern terms, this manifests in austerity-driven service cuts, regressive tax burdens, and underinvestment in racialized communities.

3.3. The Evolution of Firms and the Rise of Fiscal Autonomy

Ronald Coase’s (1937) theory of the firm helps illuminate a new phase in this history: the rise of the fiscally sovereign corporation. Firms emerged as internal hierarchies to minimize transaction costs, but they also began to exert influence over public institutions, particularly taxation and regulation. In the post-World War II period, multinational corporations expanded globally, extracting resources from the Global South while contributing minimally to domestic fiscal systems. The development of transfer pricing, tax havens, and regulatory arbitrage marked the emergence of corporate fiscal egoism: a system where firms enjoy public infrastructure, legal protections, and labor markets while systematically avoiding equitable contribution.

Today, firms negotiate tax liabilities, influence fiscal legislation, and even occupy public governance roles—as exemplified by Elon Musk’s role in the Trump administration’s Department of Government Efficiency (DOGE). This transformation marks a new frontier in fiscal history: the institutional merging of firm and state (See Self-interest, Altruism, Egoism, Reciprocity, and Risk-Sharing in Digital Social Networks).

3.4. Human Capital and the Politics of Inclusion

Gary Becker’s (1964) work on human capital recognized that education, health, and skills shape individual income potential. Yet these are not simply individual investments—they are fundamentally shaped by fiscal policy. In both the Global North and South, public investment in human capital has been stratified by race, class, and geography. Wealthier populations insulate themselves through private education, tax-sheltered savings, and elite universities, while public systems for the majority are chronically underfunded.

This asymmetry is rooted in a long history of underinvestment in the poor, particularly in postcolonial states, where structural adjustment policies imposed by international lenders (IMF, World Bank) cut social spending, privatized health and education, and created fiscal architectures of perpetual scarcity. What is often presented as a lack of state capacity is more accurately a strategic deprivation shaped by historical and global power asymmetries.

3.5. The Legal Codification of Fiscal Inequality

As Douglass North (1990) argues, institutions are not merely efficiency-maximizing—they are designed to reduce uncertainty for those with power. Throughout modern history, this has meant codifying the fiscal privileges of elites while externalizing the costs of public investment onto the poor. Whether through favorable inheritance laws, estate tax exemptions, or regressive consumption taxes, the fiscal system operates as a tool of wealth reproduction.

The legal foundation for egoistic fiscal behavior today is therefore centuries in the making. From colonial taxation to corporate lobbying, from slave codes to Supreme Court decisions, the fiscal system has never been neutral. It has always carried within it the ideological and institutional DNA of domination.

3.6. Historical Continuity, Structural Egoism, and Contemporary Crisis

The past, then, is not behind us—it is institutionalized. The contemporary fiscal landscape reproduces these historical patterns through updated mechanisms: campaign finance systems, international tax treaties, judicial rulings like Trump v. United States (2024), and market fundamentalism. These systems enable egoistic actors—whether states, firms, or individuals—to legally and structurally avoid obligations to the public.

This historical perspective sets the stage for the next section: a theoretical and conceptual analysis of egoistic behavior, not as a moral failing, but as a rational strategy embedded within institutional designs. By doing so, we can begin to map out how such behavior takes hold, persists, and scales within fiscal governance.

4. Theoretical Framework and Conceptual Foundations

Understanding how egoistic behavior shapes fiscal policy requires more than surface-level diagnoses of corruption or greed. It necessitates a robust theoretical framework that explains how self-interested behavior is constructed, incentivized, and institutionalized within systems of governance. This section builds a multi-dimensional conceptual lens grounded in foundational thinkers and interdisciplinary traditions to show how egoism operates not only as individual motivation but as a structural logic embedded in institutions, ideologies, and legal regimes.

4.1. Classical Political Economy and the Ambiguity of Self-Interest

The modern discourse on self-interest and governance begins with Adam Smith, whose notion of the “invisible hand” has often been misunderstood as an unconditional endorsement of egoism. In The Wealth of Nations (1776), Smith acknowledged that individual pursuit of gain could yield socially beneficial outcomes—but only under a framework of ethical constraint, competition, and justice. Smith warned against monopolies, rent-seeking, and unregulated commerce that distort markets and public goods. When these ethical limits are absent—as in many modern fiscal systems—self-interest ceases to function productively and mutates into systemic egoism.

Thomas Hobbes, in Leviathan (1651), recognized the need for sovereign authority to constrain the destructive potential of egoism in the absence of civil society (See Social order in society). His justification of absolute power to maintain order remains relevant in contexts where executive actors claim fiscal discretion under the guise of national interest, particularly when legal systems shield them from scrutiny, as in Trump v. United States (2024). In this sense, Hobbes’s sovereign has re-emerged in the guise of the modern executive—now shielded not just by force, but by constitutional immunity.

4.2. Public Choice and Rational Egoism

James Buchanan and Gordon Tullock’s (1962) public choice theory extends economic rationality to the realm of politics, arguing that politicians, voters, and bureaucrats pursue personal goals within institutional constraints. This theory is critical in explaining why fiscal systems often favor the politically organized and economically powerful: tax codes are complex not because of inefficiency, but because of rational political bargains that reflect the interests of dominant coalitions.

Gary Becker (1974) further advanced the notion that individuals maximize utility even in non-market settings—such as voting, family life, or government service. This rational egoism helps explain why donors fund campaigns for fiscal returns, and why officials craft policies favoring their financial or ideological supporters.

However, Amartya Sen (1977) critiques this reductionist view, introducing the concept of “commitment” and arguing that identity, social norms, and ethical obligations often shape human behavior. When designed without recognition of these dimensions, Fiscal systems suppress non-egoistic motivations and structurally reward the narrow pursuit of self-interest.

4.3. Institutional Economics and the Fiscal Role of the Firm

Ronald Coase’s (1937) theory of the firm presents a model where organizations arise to internalize transaction costs that markets fail to manage efficiently. Yet, as firms grow into transnational fiscal agents, they increasingly shape—not merely respond to—the policy environment. By engaging in regulatory arbitrage, lobbying, and strategic philanthropy, firms displace the public sector’s role in determining fiscal priorities. In the case of Elon Musk’s leadership of DOGE under Trump, Coase’s internal coordination logic extended into executive statecraft.

Building on this, Douglass North (1990) argues that institutions evolve to reduce uncertainty, but often do so in ways that protect elite interests. In the context of fiscal governance, laws, tax codes, and executive discretion are not neutral—they are historical constructs engineered to stabilize asymmetries in wealth and influence.

This explains how corporate egoism is not merely tolerated but facilitated, especially in legal regimes where firms can shape policy through lobbying, political financing, and market dominance.

4.4. Justice, Ethics, and Democratic Accountability

Any serious fiscal policy analysis must engage with normative theories of justice, particularly those concerned with distribution, legitimacy, and intergenerational responsibility.

John Rawls (1971) introduced the “difference principle,” arguing that inequality is only justifiable if it benefits the least advantaged. If applied to fiscal policy, this principle would require progressive taxation, universal access to public goods, and limits on elite fiscal privileges. Egoistically informed regimes directly violate this principle by concentrating gains while externalizing harm.

Nancy Fraser (1995) emphasizes the need to integrate redistribution with recognition, contending that justice requires material equity and the political inclusion of marginalized identities in decision-making. Fiscal policy, when determined by elites without participatory governance, reproduces what Fraser calls “subaltern exclusion”—a form of economic and symbolic fiscal domination.

Peter Singer (2011) expands the ethical frame further by advocating for moral obligation beyond borders and generations. Egoistic fiscal policies that neglect climate investment, cut humanitarian aid, or accumulate sovereign debt without accountability are thus not only inefficient but unethical.

4.5. Postcolonial Critique and Global Fiscal Asymmetries

Fiscal egoism is not confined to domestic elites—it is structurally embedded in global economic relations. Walter Rodney (1972) and Frantz Fanon (1963) show how colonial fiscal systems were designed to extract rather than develop, shaping present-day underdevelopment. These systems persist through international tax regimes, structural adjustment, and debt conditionality, which continue to deprive postcolonial states of fiscal sovereignty.

Even when sovereignty is restored on paper, global institutions—such as the IMF or World Bank—constrain fiscal space, prioritizing creditor interests over public investment in human capital and ecological resilience.

In this context, the Trump administration’s unilateralism, withdrawal from global climate accords, and donor-linked tariff policy function as microcosms of a broader trend: the global legitimation of fiscal egoism as sovereign discretion.

5. Fiscal Policy: Objectives, Instruments, and Governance

Fiscal policy is a central pillar of statecraft. It is the architecture through which governments mobilize resources, redistribute income, invest in collective needs, and stabilize economic cycles. At its most basic level, fiscal policy reflects a social choice: who pays, who benefits, and who decides. These choices are not merely economic—they are moral, political, and institutional. In this section, we explore the normative objectives of fiscal policy, the instruments through which these are pursued, and the governance structures that determine their execution. We then examine how these systems become susceptible to egoistic capture when designed without ethical, democratic, and institutional constraints.

5.1. Normative Objectives of Fiscal Policy

Mainstream economic theory, particularly the Keynesian tradition, identifies four core objectives of fiscal policy:

Macroeconomic stabilization – to smooth economic cycles and promote full employment through countercyclical spending.
Efficient resource allocation – to invest in public goods and correct market failures.
Redistribution – to reduce inequality and promote social cohesion.
Intergenerational responsibility – to balance current spending with long-term sustainability.

These objectives are also supported by liberal and social contract theorists, from John Rawls’s insistence on distributive justice to Adam Smith’s moral economy of fairness and taxation. However, these normative goals are often reinterpreted—or eclipsed—within ideological regimes that prioritize market outcomes above public goods.

Milton Friedman, a leading figure of the neoclassical and monetarist school, advanced a view of fiscal policy that emphasized limited government and market self-regulation. In Capitalism and Freedom (1962), Friedman argued for minimal taxation, privatization of services, and a reduction of discretionary fiscal authority. While his ideas served as a corrective to inefficient public bureaucracies in some contexts, they also provided the ideological blueprint for austerity, deregulation, and public sector retreat—conditions under which egoistic behavior by both firms and states becomes unrestrained.

In Friedman’s own terms, “The government solution to a problem is usually as bad as the problem.” However, this logic—when universally applied—undermines the very conditions required for equity and sustainability, creating fiscal systems more responsive to capital markets than to democratic constituencies.

5.2. Revenue Instruments: Who Pays?

Government revenues are primarily generated through taxation, which reflects the ethical and political logic of a fiscal regime.

Progressive taxes (e.g., income and estate taxes) are designed to distribute burdens according to ability to pay, aligning with Rawlsian justice.
Regressive taxes (e.g., value-added taxes, excise duties) disproportionately affect lower-income groups and are often implemented for administrative ease or under IMF conditionality.
Tax expenditures (loopholes, deductions, exemptions) represent implicit spending that often benefits the wealthiest actors.

Under egoistic regimes, as seen in the U.S. Tax Cuts and Jobs Act (2017), fiscal instruments are inverted: the wealthiest receive enduring tax relief while public services are defunded. This inversion is not a technical accident—it is the outcome of elite negotiation, donor pressure, and institutional design, reflecting the rational egoism described by public choice theory (Buchanan & Tullock, 1962).

5.3. Expenditure Instruments: Who Benefits?

On the spending side, fiscal policy allocates resources through:

Current expenditures (salaries, pensions, subsidies)
Capital expenditures (infrastructure, education, health)
Transfers and safety nets (social protection, unemployment benefits)
Public investment in human and ecological capital (long-term sustainability)

Ideally, these expenditures correct market failures and reduce inequality. But when fiscal systems are captured by egoistic behavior, expenditures serve politically favored groups, corporate interests, or symbolic nationalist projects, rather than the public at large. Under Trump, tariff exemptions for donors, military budget expansions, and cuts to humanitarian programs illustrate how fiscal allocations become patronage networks rather than instruments of justice.

5.4. Governance Structures and the Politics of Control

Fiscal governance is shaped by institutions that authorize, allocate, and monitor public resources. These include:

Treasuries and finance ministries, responsible for planning and execution;
Legislatures, which approve budgets and oversee expenditures;
Auditors and fiscal councils, which ensure accountability and sustainability;
Judiciaries, which interpret constitutional limits on fiscal discretion.

When functioning democratically, these structures constrain egoistic behavior by imposing transparency, checks, and deliberation. However, when weakened by executive overreach, donor capture, or judicial complicity, fiscal governance devolves into personalistic and transactional practice.

The 2024 Supreme Court decision in Trump v. United States exemplifies this transformation: by granting immunity to presidents for official acts, it institutionalizes unaccountable fiscal discretion—where political loyalty, not legal obligation, governs fiscal choices.

5.5. Fiscal Federalism and Vertical Asymmetries

In federal systems, fiscal authority is divided between national and subnational governments. While this can enhance responsiveness, it often produces vertical imbalances (where local governments depend on central transfers) and horizontal inequalities (where wealthy regions outspend poorer ones). Under egoistic regimes, central authorities may use transfers punitively, defunding dissenting jurisdictions or rewarding ideological allies.

This was visible under Trump, who threatened to cut funding to sanctuary cities and “disloyal” states—weaponizing fiscal federalism to enforce political conformity.

5.6. Fiscal Policy as Moral and Political Infrastructure

Ultimately, fiscal policy is not just a toolkit—it is a form of public moral infrastructure. It shapes not only what the state does, but what it values. When designed ethically, it becomes an instrument of solidarity and justice. When governed egoistically, it becomes an engine of domination and exclusion.

As Nancy Fraser notes, justice is not only about distribution—it is about recognition and participation. Fiscal regimes that fail to represent marginalized voices, that silence deliberation, or that elevate elite preferences into legal permanence, are not flawed—they are unjust.

The following section will examine how egoistic behavior operates within these fiscal frameworks—not as a marginal deviation, but as a core logic incentivized and protected by existing institutions.

6. Egoistic Behavior in Fiscal Policy and Decision-Making

Egoism, in its most basic form, is the pursuit of self-interest. In economic theory, this pursuit has long been assumed to drive individual and institutional behavior. Yet when egoistic logic becomes structurally embedded in fiscal governance—when policy actors operate within incentive systems that reward private gain over public duty—the consequences are not merely inefficient; they are systemically unjust.

This section analyzes the multiple layers through which egoistic behavior manifests in fiscal decision-making. It distinguishes between individual rationality and institutional design, illustrating how behavior that may appear selfish at the micro level is in fact rational within structurally perverse systems. Drawing on insights from Becker, Sen, Buchanan, Coase, and North, this section argues that egoistic behavior is both cultivated and normalized in contemporary fiscal regimes.

6.1. Political Actors and Electoral Incentives

Elected officials make fiscal decisions within environments shaped by reelection pressures, lobbying networks, and party ideology. In such contexts, egoistic behavior is not an anomaly—it is often the dominant strategy.

Politicians favor short-term tax cuts or symbolic spending increases that offer immediate electoral rewards, even if they produce long-term fiscal imbalances.
Constituencies with high voting power or donor clout are prioritized in tax relief and service provision, while marginalized communities are underfunded or targeted with punitive austerity.
Under Trump, this was evidenced by targeted tariff exemptions, the reshuffling of infrastructure funds toward politically aligned states, and the withdrawal of humanitarian aid to areas considered politically irrelevant.

These patterns echo Buchanan and Tullock’s (1962) insight: policy is shaped not by public interest, but by coalitional bargaining among actors seeking to maximize personal and electoral gain.

6.2. Bureaucratic Behavior and Institutional Self-Preservation

Within fiscal administrations, bureaucracies themselves act egoistically—seeking budget maximization, institutional expansion, or political insulation.

Ministries of finance may prioritize debt servicing or investor confidence over domestic welfare in order to maintain status with international institutions.
Agencies may inflate budgetary needs or resist oversight to preserve autonomy.
In postcolonial states, fiscal technocracies are often aligned with donor expectations rather than local public needs, creating what Fraser (1995) calls a “recognition deficit” in policy-making.

Egoistic behavior in bureaucracies is not necessarily corrupt—it often reflects rational adaptation to institutional rules and incentive structures, as modeled by North (1990).

6.3. Donor Influence and Political Finance

Campaign finance systems are among the most transparent examples of egoistic incentive structures in fiscal decision-making.

Donors fund political campaigns in anticipation of favorable tax policy, regulatory leniency, or direct fiscal contracts.
In the U.S., the 2017 Tax Cuts and Jobs Act was heavily shaped by corporate lobbying, benefiting major contributors through reduced corporate tax rates and stock buyback incentives.
During Trump’s second term, fossil fuel companies received tariff exemptions following major campaign contributions—a direct transactional use of fiscal instruments.

Such dynamics are consistent with Gary Becker’s (1974) model of political competition as a market in which politicians supply policies in exchange for political support. The difference is that this “market” is structurally biased in favor of organized capital, not popular need.

6.4. Executive Authority and Legal Immunity

Egoistic behavior reaches its institutional zenith when executive discretion is shielded from legal accountability. The 2024 Supreme Court ruling in Trump v. United States formalized this condition by granting former presidents immunity from criminal prosecution for official acts. This decision:

Undermines the separation of powers,
Legitimizes personal fiscal decisions masquerading as national interest, and
Provides legal cover for fiscal favoritism, retaliation, and elite patronage.

This ruling reflects what Hobbes (1651) feared and Pettit (1997) warned against: the emergence of domination, where power can be exercised without reciprocal accountability. It also institutionalizes egoism within the constitutional order—removing legal checks on the self-interested use of public finance.

6.5. Corporate Strategy and Fiscal Externalization

Multinational corporations are not passive recipients of fiscal regulation—they are active agents shaping fiscal policy, as predicted by Coase (1937).

Through regulatory lobbying, tax negotiation, and campaign contributions, corporations reduce their fiscal obligations while benefiting from public goods (infrastructure, legal enforcement, educated labor).
They operate through internal hierarchies that absorb fiscal gains while externalizing costs to workers, communities, and ecosystems.
As seen in Trump’s appointment of Elon Musk to lead DOGE, corporate logic can become indistinguishable from executive governance—creating a firm-state hybrid immune to traditional checks and balances.

Such actors do not simply exploit fiscal systems—they reshape them to reflect their own internal rationality, extending Coasean coordination into public finance.

6.6. Judicial Design and Structural Impunity

Legal institutions can either constrain egoistic fiscal behavior or enable it. In cases where courts rule in favor of executive immunity, deregulated political finance, or corporate personhood, they serve as agents of fiscal asymmetry.

The U.S. Supreme Court has upheld the right of corporations to engage in unlimited political spending (Citizens United v. FEC, 2010).
It has also limited the ability of regulatory agencies to enforce constraints on fiscal actors.
The 2024 ruling in Trump v. United States demonstrates how legal interpretation can become a doctrine of impunity, transforming egoistic behavior from a liability into a protected right.

6.7. Analytical Synthesis: Egoism as Structural Logic

Across these domains—political, bureaucratic, corporate, and judicial—egoistic behavior is not aberrant. It is the logical product of institutional rules, incentive systems, and legal regimes. These systems, in turn, are shaped by historical trajectories of power, inequality, and economic ideology.

In such regimes, fiscal policy ceases to be a public good and becomes a negotiated terrain of private enrichment, where the ability to influence policy is itself a function of wealth and proximity to power.

The following section turns to the material consequences of such regimes, focusing on how egoistic behavior in fiscal decision-making exacerbates inequality, weakens public goods, and entrenches long-standing structural injustices.

7. Distributional Effects of Egoistically-Informed Fiscal Policy

Fiscal policy is the principal mechanism through which the state allocates burdens and benefits. When governed by egoistic logic—whether in the form of elite capture, executive discretion, or corporate influence—fiscal policy reproduces and amplifies structural inequalities. This section analyzes the distributional effects of such regimes, integrating insights from classical political economy, modern inequality research, postcolonial studies, and ethics.

It demonstrates that who pays, who benefits, and who decides in egoistic fiscal regimes is not random: it follows a rational pattern that protects wealth, excludes the marginalized, and shifts social costs onto the most vulnerable.

7.1. Wealth and Capital Concentration

One of the most salient outcomes of egoistic fiscal governance is the concentration of wealth in the top echelons of society, reinforced through:

Regressive tax reforms, such as the U.S. Tax Cuts and Jobs Act (2017), which permanently lowered corporate and top marginal income tax rates.
Preferential treatment of capital income, such as lower rates on dividends and capital gains, compared to wage income—a phenomenon deeply critiqued by Thomas Piketty (2014).
Inheritance and estate tax erosion, which facilitates intergenerational wealth preservation among elite families, while limiting mobility for others.

These policies result in what Rawls (1971) would deem unjustifiable: inequalities that do not benefit the least advantaged but instead consolidate privilege. The system favors asset holders over laborers, capital over contribution, and inheritance over merit.

7.2. Regressive Tax Burdens and Working-Class Penalization

In egoistic regimes, fiscal burdens are disproportionately shifted toward those with the least political influence:

Indirect taxes—such as sales, excise, and VAT—become primary revenue tools, burdening low-income households with a higher effective tax rate.
Payroll taxes and social contributions are often capped, creating a fiscal ceiling for high earners while continuing to extract from lower incomes.
Public service fees, introduced under austerity regimes or structural adjustments, impose further costs on those reliant on state provision.

As Nancy Fraser (1995) argues, this is not merely a misallocation of resources but a denial of recognition—where the working poor are rendered visible only as revenue sources, not as fiscal citizens.

7.3. Underinvestment in Human Capital and Social Protection

Gary Becker’s (1964) theory of human capital posits that investments in education, health, and training are critical to long-term productivity and growth. Egoistic fiscal regimes, however, chronically underinvest in public human capital systems:

Education funding is stratified, with elite enclaves accessing private or well-funded public schools while others contend with under-resourced institutions.
Healthcare systems, when privatized or defunded, limit access to preventative care, particularly for racialized and rural communities.
Social protection programs are narrowed through means testing, bureaucratic hurdles, or fiscal retrenchment, eroding their role in mitigating risk and insecurity.

In postcolonial states, structural adjustment policies often demanded sharp cuts to health and education budgets—a continuation of colonial underinvestment under the guise of fiscal discipline (Rodney, 1972; Fanon, 1963).

7.4. Fiscal Asymmetries and Spatial Exclusion

Egoistic fiscal systems produce spatial inequalities in resource allocation:

Urban financial centers receive disproportionate infrastructure and service investments, while rural and marginalized regions remain underserved.
In the U.S., property-tax-based school financing perpetuates racial and class-based educational disparities.
In federal systems, politically aligned states or regions are rewarded with discretionary transfers, while opposition areas face punitive disinvestment—a pattern visible under Trump in the withdrawal of funds from so-called “disloyal jurisdictions.”

These outcomes reflect what Iris Marion Young (1990) called “structural injustice”: harms that arise from normal operations of institutions, not intentional discrimination, yet systematically disadvantage certain groups.

7.5. Intergenerational and Ecological Consequences

Egoistic fiscal policy is not merely unjust in the present—it is also myopic in time. Peter Singer (2011) and Kate Raworth (2017) emphasize that fiscal justice must account for future generations, particularly in relation to climate and public debt.

Fossil fuel subsidies and deregulation, as seen during Trump’s terms, worsen ecological degradation while shielding extractive industries from taxation.
Underinvestment in climate adaptation, renewable infrastructure, and environmental protection creates long-term liabilities for youth and unborn populations.
Rising sovereign debt—driven by regressive tax cuts and elite rent-seeking—limits future fiscal space for social investment.

These practices constitute a form of temporal egoism, where current elites maximize consumption and power while externalizing costs onto generations with no political voice.

7.6. Postcolonial Dimensions of Distributional Injustice

Global fiscal regimes further entrench inequity through:

Transfer pricing and tax havens, which deprive Global South countries of corporate revenues, even as they provide natural resources and labor.
Debt servicing obligations, which crowd out social spending and perpetuate austerity.
Aid conditionalities, which impose fiscal discipline that serves creditors rather than domestic development priorities.

These dynamics, described by Walter Rodney (1972) as “underdevelopment by design,” reveal that fiscal inequality is not only domestic—it is geopolitical. Wealth flows upward and outward, while costs flow downward and inward.

7.7. Toward a Normative Reading of Distribution

From a normative perspective, the distributional outcomes of egoistic fiscal regimes violate multiple standards of justice:

Rawlsian fairness is undermined by policies that privilege those already well-off.
Fraser’s dual recognition is absent in systems that fail both material equity and political inclusion.
Becker’s productivity logic is corrupted when human capital investment becomes a private luxury, not a public right.
Ecological stewardship, central to intergenerational ethics, is abandoned in favor of elite extraction and short-termism.

These outcomes are not accidental—they are the predictable result of fiscal systems designed by and for those who already possess power. Fiscal policy, in this view, becomes a technology of exclusion, rather than an instrument of solidarity.

8. Embedded Inequities and the Historical Continuum

To understand the durability of egoistic fiscal behavior, one must look beyond surface-level dysfunctions or episodic abuses. The deep structures of fiscal inequality are embedded in histories of conquest, colonization, slavery, enclosure, and exclusion. These histories are not only relevant—they are constitutive of the modern fiscal state. As Douglass North (1990) reminds us, institutions are not neutral instruments for efficiency—they are evolved frameworks that reflect and stabilize existing distributions of power.

This section critically examines how fiscal regimes today reproduce the legacy of racial capitalism, imperial extraction, and elite legalism, manifesting in modern laws, tax codes, and global economic systems. These inherited designs allow egoistic behavior to appear rational, lawful, and even inevitable.

8.1. The Colonial Fiscal Template

Colonialism was not merely a system of territorial occupation—it was a fiscal apparatus of extraction. In Africa, the Caribbean, Asia, and the Americas, colonial authorities used taxation to:

Extract labor and produce compliance (e.g., hut taxes, head taxes),
Fund imperial administration with minimal local reinvestment,
Destroy subsistence economies and force market participation, ensuring revenue through monetization.

These systems operated on the premise that colonized populations were subjects to be taxed but not citizens to be served. This foundational asymmetry continues to structure fiscal thinking today, particularly in postcolonial states, where revenue systems remain dependent on regressive consumption taxes and extractive industries, while public goods remain chronically underfunded (Rodney, 1972; Fanon, 1963).

8.2. Slavery, Emancipation, and Legalized Wealth Protection

The fiscal legacy of slavery is visible in both the suppression of Black wealth and the legal insulation of white capital. In the United States and the Caribbean, slaveholders received compensation for “lost property” after abolition, while formerly enslaved populations received no restitution, no land, and no public investment. This fiscal asymmetry was encoded in law:

Property rights over human beings were converted into property rights over tax-exempt capital.
Racialized tax codes and enforcement ensured that freed communities remained both impoverished and fiscally invisible.
Inheritance laws and discriminatory assessments preserved elite wealth through legal continuity.

These historical mechanisms laid the groundwork for modern wealth inequality—and for the racialized geography of public investment, where state resources flow to those historically positioned to accumulate, rather than those historically denied.

8.3. Structural Adjustment and Neocolonial Fiscal Constraints

Postcolonial independence did not entail fiscal autonomy. From the 1970s onward, many Global South nations faced sovereign debt crises, leading to structural adjustment programs (SAPs) imposed by the IMF and World Bank. These programs required:

Austerity measures: slashing social spending, wages, and subsidies.
Privatization of public goods: including water, electricity, and healthcare.
Trade liberalization and tax reform: emphasizing consumption taxes and eliminating tariffs.

While presented as necessary for macroeconomic stability, SAPs replicated colonial fiscal logic: public sacrifice for private capital, with decisions made externally and legitimacy bypassed. This re-embedding of fiscal egoism—under the guise of efficiency—produced a generation of underdevelopment and disempowerment.

As Nancy Fraser (1995) and Walter Rodney (1972) argue, this process constitutes redistribution in reverse: wealth flows from the poor to creditors, while fiscal sovereignty remains subordinated to global capital.

8.4. Racialized and Spatialized Inequities in Modern Fiscal States

In contemporary democratic states, historical inequities are preserved through fiscal federalism, property-based funding models, and discriminatory enforcement:

In the U.S., school funding tied to local property taxes continues to reproduce segregation, decades after legal desegregation.
In urban fiscal crises—such as Detroit or Flint—public disinvestment reflects a racialized devaluation of communities.
Under Trump, funds were diverted away from sanctuary cities and refugee programs, and toward militarized border control and fossil fuel incentives.

These practices are not isolated decisions—they are structured by a fiscal system built to reward historical privilege and penalize deviation from dominant political ideologies. What appears as fiscal pragmatism is often an inheritance of exclusion.

8.5. The Firm-State Symbiosis and Coasean Empire

Returning to Ronald Coase’s (1937) insights, modern firms function as internal planning systems that minimize external costs. Yet when they extend this logic to the state—through lobbying, campaign financing, and regulatory design—they reshape fiscal governance itself. In the Trump administration, this became explicit:

Donors received tailored tax exemptions and tariff carve-outs.
Corporate leaders were appointed to public agencies, aligning fiscal priorities with private enterprise logic.
Deregulation served as fiscal policy by omission, privileging short-term profit over long-term responsibility.

This fusion of firm and state echoes the imperial company-states of old—the East India Company redux—where fiscal authority and private gain are no longer separable.

8.6. Judicial Endorsement of Fiscal Egoism

Law has always played a role in stabilizing elite fiscal privileges. The recent Trump v. United States (2024) ruling by the U.S. Supreme Court represents a constitutional evolution of this logic: by granting the president immunity for “official acts,” it effectively removes legal constraints on the executive use of fiscal instruments for personal or political benefit.

Such legal formalism aligns with what Douglass North (1990) called “limited access orders,” where laws exist not to equalize power, but to protect those who already possess it. In such systems, egoism becomes sovereign behavior, not prosecutable abuse.

8.7. Continuity, Not Exception

Taken together, these histories reveal that the modern fiscal crisis is not a deviation from past systems—it is their continuation. The structure of fiscal egoism—its legal shields, institutional designs, and distributive patterns—are legacies of systems built for exclusion and extraction.

Recognizing this continuity is essential. Without it, reforms remain cosmetic, and the logics of domination adapt to new rhetorical forms—efficiency, sovereignty, legality—while the structural exclusions persist.

The next section brings these insights into sharper empirical focus, with case studies that show how embedded egoism operates in contemporary fiscal regimes.

9. Case Studies: Institutionalized Egoism in Practice

The institutionalization of egoistic behavior within fiscal policy does not occur abstractly. It manifests concretely in systems where political incentives, legal structures, and economic hierarchies converge. This section explores three critical case studies that exemplify how egoistic fiscal governance operates across political regimes: the United States under Donald Trump (with emphasis on the conflicting role of Congress, the Senate, and the judiciary), the Greek debt crisis and Eurozone austerity, and postcolonial fiscal architecture in resource-rich developing states.

Together, these cases show that egoism in fiscal policy is not an exception or failure—it is a systemically rational outcome in political economies shaped by concentrated power and historical exclusion.

9.1. The United States Under Donald Trump: Executive Egoism and Institutional Complicity

Donald Trump’s presidency (2017–2021 and from 2025 onward) serves as a powerful example of how fiscal policy can be captured by egoistic logic and institutionalized through executive action, legislative inaction, and judicial protection.

The Tax Cuts and Jobs Act (2017)

This legislation permanently reduced corporate income taxes from 35

Donor Capture and Tariff Policy

During Trump’s second term, companies that had contributed to his reelection campaign—including fossil fuel firms—received tariff exemptions and deregulation. These were fiscal favors in exchange for campaign support, demonstrating the commodification of policy and the normalization of quid pro quo governance.

Executive Overreach and DOGE

The creation of the Department of Government Efficiency (DOGE), led by Elon Musk, blurred the boundaries between state and corporation. DOGE had powers to restructure federal agencies without congressional oversight, representing a Coasean firm logic embedded into the state apparatus.

Trump v. United States (2024)

This Supreme Court ruling granted broad immunity to former presidents for “official acts,” legally shielding Trump from prosecution for fiscal and political actions tied to executive authority. The ruling eroded the constitutional principle of checks and balances, institutionalizing a form of fiscal egoism that is legally immune and politically unchecked.

The Republican Party and Legislative Abdication

Despite their control of both chambers of Congress at various points, Republican lawmakers largely aligned with Trump’s fiscal agenda, resisting calls for progressive taxation, climate investment, or regulatory reform. Fiscal governance was reoriented toward ideological retrenchment, corporate benefit, and executive fiat, rather than deliberative consensus.

In this case, the egoism was not individual but systemic—rooted in party strategy, institutional complicity, and legal endorsement.

9.2. Greece and the Eurozone Crisis: Austerity, External Control, and Fiscal Disempowerment

Greece’s sovereign debt crisis (2009–2018) revealed a different form of egoistic governance—one driven by supranational actors and creditor coalitions rather than domestic executives.

Structural Adjustment by the Troika

The European Commission, European Central Bank, and International Monetary Fund (the “Troika”) imposed harsh austerity in exchange for bailout funds. Fiscal policy was centralized in Brussels and Frankfurt, disempowering Greece’s parliament and imposing:

Pension cuts, wage freezes, and mass layoffs,
Rapid privatization of public assets,
Regressive tax increases (e.g., VAT), and
Institutional reforms with minimal local democratic input.

Fiscal Egoism as External Rationality

Although framed as fiscal discipline, these policies prioritized creditor protection over public welfare. The cost of adjustment was externalized onto the Greek population, while banks and investors were made whole. Here, egoism was embedded not in individual actors, but in transnational institutions governed by market logic, as predicted by Friedman and critiqued by Fraser and Sen.

Distributional and Institutional Consequences

Unemployment soared, poverty deepened, and social services collapsed—yet fiscal targets were met. This regime functioned as a reverse fiscal contract, where citizens were taxed but denied both voice and benefit, echoing colonial and neoliberal patterns of disempowerment.

9.3. Postcolonial Resource States: Extractive Fiscal Architecture and Elite Capture

In many resource-rich postcolonial nations—such as Nigeria, Angola, and the Democratic Republic of Congo—fiscal systems have been shaped by a legacy of colonial extraction, elite capture, and multinational evasion.

Oil and Mining Revenues Without Redistribution

Natural resource revenues form a large share of national budgets, but are often:

Captured by elite rent-seeking networks,
Held in sovereign funds with little transparency,
Diverted into debt servicing or capital flight.

Public investment in health, education, and infrastructure remains low—despite fiscal abundance. This reflects Frantz Fanon’s insight that decolonization without structural reform often reproduces colonial elite dynamics under national flags.

Tax Avoidance and Investor Treaties

Multinational corporations negotiate tax holidays and arbitration protections through bilateral investment treaties. As Gabriel Zucman (2015) documents, these arrangements systematically deprive countries of revenue, while demanding stable governance and rule of law for capital—not for people.

Fiscal Institutions Designed to Serve External Interests

Budgets are often co-produced with international financial institutions or donor advisors, creating dual-accountability regimes: one to domestic constituencies, and a far more powerful one to creditors and foreign investors. These fiscal architectures reflect Rodney’s (1972) argument that “underdevelopment is not the absence of development—it is the result of historical design.”

9.4. Synthesis: Egoism Across Political Systems

Despite differences in geography, regime type, and institutional complexity, these case studies reveal common logics:

Rational egoistic behavior shaped by institutional incentives and protected by law,
Elite influence over fiscal instruments, regardless of formal democratic structure,
Public burdens privatized, private benefits socialized,
Legal and institutional continuity with past structures of inequality.

These regimes vary in form—from executive populism to technocratic austerity—but they all reflect fiscal systems governed by narrow interests under the appearance of legality and necessity.

The following section will deepen the analysis by examining the societal consequences of these regimes, including public trust erosion, civic fragmentation, and democratic decay.

10. Societal Consequences and Feedback Loops

The research question that animates this study—How does egoistic behavior, shaped by historical inequalities, institutional incentives, and political systems, impact the formulation, outcomes, and legitimacy of fiscal policy?—demands a broad examination of consequence. Our hypothesis—that egoistic behavior, when institutionalized within public and private fiscal architectures, distorts fiscal systems away from justice and sustainability—comes into sharp relief in the socio-political effects of such regimes.

Egoistically-informed fiscal systems do not only reproduce material inequality. They also fragment democratic societies, corrode public trust, delegitimize institutions, and undermine intergenerational solidarity. These feedback loops are not accidental—they are the predictable result of fiscal arrangements that valorize private gain over public purpose.

10.1. Erosion of Public Trust and Fiscal Legitimacy

The most immediate consequence of egoistic fiscal governance is the collapse of citizen confidence in public institutions:

When tax policies are designed to benefit elites, while essential services deteriorate, compliance falls and evasion rises.
When corporations and donors dictate fiscal outcomes, while public voices are excluded, democratic legitimacy erodes.
As shown in the U.S. under Trump, the visibility of donor favors, tax cuts for the wealthy, and legal protections for the executive led to deep polarization and institutional skepticism.

This aligns with Bo Rothstein’s (2011) theory that perceived fairness is the cornerstone of effective government. Without it, citizens disengage, withdraw participation, and lose confidence in both taxation and representation.

10.2. Fragmentation of the Civic Commons

As egoistic fiscal systems reward the few and marginalize the many, societies fracture along lines of:

Class: As the rich insulate themselves through private schooling, gated communities, and tax shelters, the middle and working classes experience relative decline and public service decay.
Race and ethnicity: Historically marginalized communities bear the brunt of disinvestment, environmental degradation, and regressive taxation.
Geography: Urban cores attract fiscal resources, while peripheral and rural regions are hollowed out—reinforcing political resentment and economic divergence.

These divides are not merely distributive—they are relational. They transform civic bonds into zero-sum politics, a dynamic captured in Fraser’s (1995) warning that misrecognized groups will reject redistributive solidarity if they feel excluded from policy legitimacy.

10.3. Institutional Degradation and Authoritarian Drift

Institutional damage under egoistic fiscal regimes is neither limited nor reversible. Key risks include:

Legislative erosion: As executives increasingly dominate budget processes and fiscal discretion (as in the Trump-era DOGE), legislatures become sidelined.
Judicial complicity: Rulings like Trump v. United States (2024) signal that even the judiciary may prioritize institutional immunity over public accountability.
Party system degeneration: Parties, particularly when captured by donor networks, cease to mediate between public interests and policy, acting instead as vehicles for private economic agendas.

These dynamics mirror Hobbesian governance, where political power becomes unrestrained by deliberative checks and transforms the fiscal state into a tool of personal sovereignty.

10.4. Intergenerational Injustice and Ecological Neglect

Egoistic fiscal policy consistently privileges present gain over future sustainability, producing what Peter Singer (2011) terms moral myopia:

Public debt accumulation, driven by elite tax cuts and military spending, limits future fiscal space for climate, education, and care infrastructure.
Fossil fuel subsidies and deregulation undermine ecological sustainability while enriching powerful actors.
Underinvestment in youth services, from education to housing, creates long-term structural disadvantages for younger and future generations.

This intertemporal shift violates the Rawlsian principle of just savings and reflects Kate Raworth’s (2017) concern that fiscal systems are structured to overshoot planetary boundaries while underserving human needs.

10.5. Civic Cynicism and Democratic Retreat

When fiscal systems are perceived as rigged, even well-meaning reforms lose legitimacy. This breeds civic cynicism, reflected in:

Lower voter turnout and political apathy, especially among the poor and young;
Populist backlash, where resentment toward elites is channeled into authoritarian or exclusionary movements;
Policy volatility, where each administration seeks to dismantle the fiscal frameworks of the last, undermining stability.

This cyclical erosion leads to a state where democracy becomes fiscal theater: taxation without deliberation, expenditure without justice, and budgeting without vision.

10.6. The Feedback Loop of Egoism

The consequences outlined above are not linear—they are recursive and self-reinforcing:

As elites benefit from egoistic policies, they acquire more resources to entrench their influence.
As public trust declines, citizens withdraw, leaving the field clear for further capture.
As institutions are hollowed out, the system loses its capacity to regulate egoism—and egoism becomes governance itself.

What began as a rational strategy within constrained systems becomes a totalizing logic, producing societies where solidarity is eroded, legitimacy evaporates, and justice is deferred.

11. Pathways Toward Equitable Fiscal Governance

If egoistic fiscal behavior is not merely incidental but institutionally embedded—if it distorts not only policy outcomes but the moral and democratic purpose of governance—then restoring fiscal justice requires more than technical adjustment. It demands systemic reconstruction grounded in ethical reasoning, democratic participation, and institutional realignment.

This section outlines such a reconstruction. Drawing from political economy, legal reform, public finance, and social theory, it presents an integrated vision for equitable fiscal governance, responding directly to the research question: How can fiscal systems be redesigned to resist egoistic capture and fulfill their normative roles of equity, sustainability, and democratic accountability?

11.1. Reconstructing the Tax Base: Equity, Transparency, and Progressivity

A fair fiscal system begins with a just taxation structure—one that reflects ability to pay, corrects market inequality, and finances shared needs.

Reintroduce progressive wealth and inheritance taxation, closing legal loopholes and ensuring intergenerational equity. As Piketty (2014) and Zucman (2015) argue, such taxes are essential to reversing structural concentration.
Align capital gains and income tax rates, ending the preferential treatment of capital over labor.
Abolish regressive tax exemptions, such as fossil fuel subsidies and tax expenditures favoring high earners.

Such reforms reclaim taxation as an instrument of solidarity, not favoritism—in line with Rawlsian justice and the ethical public finance traditions of Adam Smith.

11.2. Democratic Deliberation and Participatory Budgeting

Fiscal governance must become more democratic, not less, especially in polarized or captured contexts:

Expand participatory budgeting at the municipal and national level, allowing citizens to directly shape expenditure priorities.
Establish independent fiscal councils with mandates not only for budgetary sustainability, but for equity audits and intergenerational justice assessments.
Empower citizen assemblies and deliberative bodies to review tax reform, public spending, and ecological investment strategies.

These processes move beyond technocracy, restoring fiscal decision-making as a space of public reason and inclusive ethics, echoing Habermas’s discourse model and Fraser’s dual emphasis on redistribution and recognition.

11.3. Investing in Human and Ecological Capital

Reversing decades of disinvestment in the public requires ambitious, sustained public investment—especially in areas undercut by egoistic regimes:

Universal and free education and healthcare as human rights, not market commodities—correcting for historic underinvestment in marginalized populations.
Green transition funding that prioritizes resilience infrastructure, ecological restoration, and community-owned renewable systems—aligning fiscal policy with the planetary boundaries identified by Kate Raworth (2017).
Care economies, affordable housing, and public transit as engines of employment, equity, and low-carbon development.

These are not expenditures—they are investments in the ethical foundations of a just society.

11.4. Curbing Corporate Fiscal Power and Regulating the Firm-State Nexus

Drawing from Coase’s theory of the firm, this research has shown how corporate power now operates as a fiscal actor. Therefore:

Ban corporate political contributions, and require full transparency of lobbying activity and policy influence.
Eliminate “revolving doors” between fiscal agencies and private firms—especially in finance, energy, and defense.
Enforce minimum global corporate tax rates and renegotiate tax treaties to prevent base erosion and profit shifting.

These steps reassert the primacy of public governance over private coordination—realigning fiscal authority with democratic accountability rather than shareholder interest.

11.5. Legal and Constitutional Reform: Ending Executive Fiscal Impunity

The 2024 Supreme Court ruling in Trump v. United States exposes the urgent need to redefine legal boundaries on fiscal discretion:

Amend executive immunity doctrines to ensure that fiscal decisions can be reviewed, challenged, and sanctioned where necessary.
Create legislative veto points over large-scale discretionary fiscal actions (e.g., emergency powers, national investment funds).
Strengthen judicial capacity to adjudicate intergenerational harm, fiscal inequality, and climate inaction as justiciable violations of constitutional obligations.

This restores constitutional balance, reviving the democratic principles envisioned by Hobbes (as constraint) and later refined by Pettit (as non-domination).

11.6. Global Fiscal Justice and Postcolonial Reparations

No fiscal transformation is complete without a global dimension. Postcolonial nations face fiscal architectures not of their making, but of inherited constraint.

Cancel illegitimate debt and replace it with climate and equity-linked grants.
Design international tax and trade systems that allow sovereign revenue capacity without race-to-the-bottom competition.
Institute a global fiscal justice compact that accounts for historical extraction and reorients financial flows toward repair, restitution, and development.

This honors the normative legacy of Rodney, Fanon, and Sen, rejecting the view of fiscal inequality as failure and recognizing it as deliberate design in need of dismantling.

11.7. Fiscal Policy as Ethical and Democratic Infrastructure

Ultimately, fiscal systems are mirrors of our moral priorities. They embody our vision of who belongs, who deserves, and what kind of society we wish to build.

In resisting egoism, we are not simply changing tax rates or budget allocations. We are reclaiming fiscal policy as a moral economy—one where value is measured not only in GDP, but in dignity, solidarity, and planetary stewardship.

This vision does not reject the tools of economics. It insists that economics must be reclaimed as a moral science, grounded in democratic accountability and ethical deliberation.

12. Conclusion: Reclaiming Public Purpose in Fiscal Systems

This article set out to examine a question both timely and foundational: How does egoistic behavior—shaped by historical inequalities, institutional incentives, and political systems—impact the formulation, outcomes, and legitimacy of fiscal policy, particularly in relation to equity, sustainability, and public goods? The hypothesis guiding this inquiry held that egoistic behavior, when structurally embedded in fiscal governance, distorts public finance away from justice, solidarity, and democratic accountability.

Across twelve sections, this study has engaged with fiscal policy not merely as a technical tool of economic management but as a moral, institutional, and political system. It has demonstrated that egoistic behavior in fiscal decision-making—whether by executives, corporations, legislators, or financial institutions—is not a behavioral aberration. It is a rational adaptation to deeply structured systems of power, legality, and historical advantage.

Drawing on interdisciplinary foundations—from Adam Smith’s moral economy, Hobbes’ theory of sovereign constraint, and Rawls’ distributive ethics, to Becker’s rational individual, Coase’s theory of the firm, and Fraser’s politics of recognition—this article has shown how fiscal governance has evolved into a contested terrain where self-interest and public obligation are locked in institutional tension.

The analysis traced how this tension becomes visible:

In Trump’s U.S., where executive authority, corporate capture, and judicial immunity normalized egoistic fiscal conduct;
In postcolonial states, where colonial extraction and modern debt regimes lock governments into externally determined austerity;
In the Eurozone, where supranational fiscal logic displaced democratic sovereignty in the name of market confidence.

From these empirical illustrations emerged a pattern: fiscal policy has become both a battleground and a mirror of deeper political struggles—over inclusion, obligation, belonging, and future-making.

Yet this article does not end in cynicism. On the contrary, it affirms the possibility—indeed, the necessity—of transformation.

12.1. Reaffirming the Public Purpose of Fiscal Policy

At its best, fiscal policy is not a ledger of balance sheets—it is a public expression of ethical commitments. It defines what we value, who we protect, and how we care for one another across time, geography, and generation. To reclaim fiscal policy from egoism is to rebuild it as an infrastructure of justice:

A system that redistributes not only income but dignity;
That invests not only in roads but in human and ecological futures;
That protects not only national sovereignty but the interdependence of all people and places.

This vision is not utopian—it is urgently necessary in the face of ecological collapse, democratic retreat, and mass inequality.

12.2. An Interdisciplinary Future for Fiscal Thought

This article affirms the central insight of critical interdisciplinary economics: that no single discipline can fully understand, let alone fix, the distortions of egoistic governance. Economic models must be informed by moral philosophy, public law by historical political economy, fiscal analysis by sociology and behavioral insight. The university, and the policymaking world, must resist the reduction of economics to technocracy and restore it as a civic discipline rooted in ethics, pluralism, and democracy.

12.3. Toward an Ethic of Fiscal Citizenship

The antidote to egoism is not austerity or bureaucracy—it is fiscal citizenship: a shared understanding that taxation, budgeting, and investment are collective acts of belonging. When people see themselves not merely as consumers or voters but as co-authors of the fiscal social contract, egoism loses its legitimacy.

Such a transformation requires not only structural reform, but also a cultural renewal of the public sphere—one that honors the contributions of all, protects the vulnerable, and plans courageously for generations yet to come.

In conclusion: The impact of egoistic behavior on fiscal policy is profound, but it is not inevitable. Institutions can be redesigned. Norms can be reoriented. Fiscal systems can serve justice, not privilege—if we are willing to demand it, to design it, and to defend it.

This article offers not only a critique but a beginning. A renewed public philosophy of fiscal justice awaits—not only in theory, but in action.

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