I'm making my way through a few books at the moment and have just finished Neil Collins's The Great Irish Bank Robbery, on Allied Irish Banks and the DIRT tax. The book is one of those marvellous journalistic pieces: an easy rolicking read covering the events and (primarily) personalities behind a scandal without bothering the reader with much in the way of analysis. Given this, I don't think I'm with Shane Ross in calling the book a 'humdinger.' Still, the book does reveal the complete breakdown of governance in Allied Irish Banks throughout the late 1980s and 1990s as ambition overtook the willingness to address scandal after scandal after scandal.

While many journalists can do analysis (Andrew Marr's History of Modern Britain, is one example), Collins is more concerned with the good story. Nothing wrong with that. In fact, given the hints of analysis he does include, it's probably a good thing that Collins doesn't burden the reader with more. He doesn't seem to make up his mind whether large-scale tax evasion in Ireland was down to a 'culture of greed' or already-punitive tax rates plus instability caused by various factors including the fact that "socialists in the Labour Party were intent on a wealth tax." Perhaps he thinks it was both. I'm not sure that we find out. Either way, Irish culture is not uniquely greedy¹ and neither did people with real power need the assistance of those who barely had a say to destroy the economy.

The real questions that ought to be asked are not 'why did so many people seek to evade tax?' and 'why did the banks collude with them?' The real problem was more systematic: why was a system established that allowed tax evasion to occur on such a large scale? I suspect that the Irish version of what Michael Moran describes as 'club government' came into play, with a senior oligarchy stretching across government, business and the civil service, all colluding in creating a tax collection system that could not work. Business people did not want profits reduced, politicians didn't want trouble from these clients and from client-constituents and civil servants (the least culpible to my mind) didn't speak out.

In the end, the PAYE sector paid high taxes while, as it transpires, a vast number of people illegally paid no taxes at all. The most depressing thing is that the cabal that colluded in this, at best through their inaction, are still running the show, even if the infrastructure of state underwent some minimal modernisation (such as the establishment of the IAASA as suggested by the post-DIRT Review Group on Auditing).

Despite its strange, if thankfully infrequent, quasi-analysis and despite its reading like a 250 page Indo analysis article (at least you won't have your head turned by many polysyllabic words), Collins's book is still worth the effort. It's a bit of a shock to see how corporate governance can break down so fundamentally, especially when actions are facilitated by a clientalist state. It's also depressing to realise that the DIRT scandal was the first of many. The specific problem was fixed but we all know that few if any of the fundamental problems Collins hints at have been taken seriously by Ireland's ruling classes.

1 For instance, why did so many Americans engage in large-scale fraud in the run-up to the sub-prime crisis? It was not because they were culturally disposed. Rather, it was because collusion from the banks combined with weak anti-fraud enforcement mechanisms meant that they could (back).