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Mohamed A. El-Erian

Unintended Consequences of the Panama Papers

The outrage will make it even more difficult to govern from the center.
Ground zero.

Ground zero.

Photographer: Joe Raedle/Getty Images

The revelations about offshore accounts that came to light in the so-called Panama Papers will reinvigorate government efforts to rein in not just tax evasion, which is illegal, but tax avoidance, too.

They will also add to popular frustration that will challenge the authority of some government officials. The uproar will bring about enhanced enforcement measures. Yet there also will be unintended consequences that will further erode the credibility and effectiveness of the political establishment, including its ability to govern from the center, which is already being tested.