A simple argument for state capacity libertarianism

Again and again—and in countries all over the world—declines in trust of government correlate strongly with calls for more government regulation in more parts of our lives. “Individuals in low-trust countries want more government intervention even though they know the government is corrupt,” explain the authors of a 2010 Quarterly Journal of Economics paper. That’s certainly the case in the United States, where the size, scope, and spending of government has vastly increased over exactly the same period in which trust and confidence in the government has cratered. In 2018, I talked with one of the paper’s authors, Andrei Shleifer, a Harvard economist who grew up in the Soviet Union before coming to America. Why do citizens ask a government they don’t believe in to bring order? “They want regulation,” he said. “They want a dictator who will bring back order.”

Counterintuitively, the relative size and spending of government in the United States actually flattened or dipped during periods when trust and confidence in government picked up…

That is Nick Gillespie, via Arnold Kling.

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Huge issue in infrastructure, and one completely unexplored. Lack of trust, more regulation, greater transactions costs, more expensive, slow and inefficient infrastructure... and the solution is?

Clearly , the solution is state capacity statism with a libertarian face.

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- Infrastructure at 2-10x the cost if it gets built at all
- Zoning preventing new housing
- Healthcare with Kafkaesque cost structure
- Greater share of private interactions subject to litigiously inclined bad actors
- interminable wars with no benefit

It’s easy to see why the reaction of a large part of the electorate is to jump to vague promises to tear the whole thing down.

The anointed experts have been failing. But they refuse to believe they might be wrong.

Agreed, and they are dug in like ticks.

The only difference between the ruling elite in the deep state and a blood sucking tick is that we can remove a tick.

+1

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By failing, do you mean the elites helped make America the best country in the world? Because being the best means the elites were successful. If you thought America hasn’t been best the country at any point in the last few decades, please say which country/ies is/are better.

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"Zoning preventing new housing"

Yep, the jackboot destruction of affordable Lockian housing by forcing RVs housing Tesla workers to move from the roadside across from the Fremont Tesla plant, the government destruction of affordable Lockian housing on public land under public bridges and other public ways and in public parks.

Just like "Hoover" (actually Pershing?) sending in the military to destroy the affordable housing in various Hoovervilles.

Note, the amount of single family housing building opportunity is extremely high in Cslifornia City, CA, and Detroit, and many Rust Belt cities and towns. It's not the zoning that's the problem, but the failure of public policy, the free market, etc.

Conservatives, libertarians want free lunches, magic bullets, ..

If single family detached housing zoning is eliminated, roads sized for a hundred vehicles per hour will magically support 10,000 vehicles per hour, sewer systems for a thousand families will magically handle the poop of 100,000 families.

Not Pershing. MacArthur.

There’s no such thing as a free lunch, and there is a magic bullet.

Many espouse the virtues of freedom and liberty, so long as it is they who get to decide to whom and what measure those freedoms and liberties apply.

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I call bullshit: if you don't trust your neighbor, why would you a group of self-serving bureaucrats?

You think the government will protect you. That's why unmarried women and minorities lean so leftward.

"That's why unmarried women and minorities lean so leftward."

No, the world does not owe you a supermodel.

As for minorities, they probably did not forget what the far-right opposes:
https://www.ourdocuments.gov/doc.php?flash=false&doc=40

https://en.m.wikipedia.org/wiki/Civil_Rights_Act_of_1964

"No, the world does not owe you a supermodel." Ummm, huh? That made sense in your head?

As for civil rights, the Rep part was founded on eliminating slavery, and voted more for the civil rights act than did the Dems. The KKK and Bull Connor were parts of the Demo party.

"That made sense in your head?"

Yes. That ia the sad part. Entitled men are such a big constituency one can have ready answer for them and Republican can seek their support.

"the Rep part was founded on eliminating slavery"
I won't tell the Neo-Confederates if you won't. By the way, until the 1960s the Republican Party was poison in the South. I wonder what changed back then. For example, Johnson proposing Civil Rights legislation and Goldwalter opposing it. Why do you think Strom Thurmond left the Democratic Party?

I can't decide which is stupider, TMC pretending he doesn't know that the racists switched from Dems to Reps (and black voters the opposite) or him pretending the Dems are to blame for the 2003 Iraq war because many of them voted for it.

He knows better on both, but thinks he can fool us.

" TMC pretending he doesn't know that the racists switched from Dems to Reps "

People say things like that, but they don't bother looking at the actual data.

538 did an analysis of racism by party

https://fivethirtyeight.com/features/are-white-republicans-more-racist-than-white-democrats/

Essentially both parties were similar and trending steadily downward till the Obama years, but since then there's been a somewhat more racism among Republicans. However, both Democrats and Republicans are less racist than either group was in the 90's.

"As of 2012, this index stood at 27 percent for white Republicans and 19 percent for white Democrats. "

But my point still stands. Look above where TMC was trying to score points by showing how the KKK used to be Dems. They ain't anymore, and he knows it. It's just dumb.

Actually the Iraq War vote and the South becoming Republican are related. So the reason the South became Republican was because segregation stopped being an issue and on most of the other issues the South agreed with Republicans. The the Democratic giants of the Senate were southern conservative Cold Warriors that urged LBJ to escalate the Vietnam War. So that pro-military view persisted and allowed Bush to get support for invading Iraq.

"So the reason the South became Republican was because segregation stopped being an issue and on most of the other issues the South agreed with Republicans. "

+1, this looks like the logical conclusion.

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"But my point still stands....that the racists switched from Dems to Reps"

No your point doesn't stand. The data doesn't support that statement. It's just Left wing conventional wisdom.

Look at the data. There was no switch, racism trended downward in both parties. The racists in the Democratic party have largely died off over the last 60 years. There was no upward move of racism in the Republican party.

Whites who say they would not vote for a Black President:
1972 Democrats 27% Republicans 28%
1996 Democrats 13% Republicans 6%
2008 Democrats 4% Republicans 6%

https://fivethirtyeight.com/wp-content/uploads/2014/04/silver-racial-index-8.png?w=575

...that racism has declined in both parties. But again, I was pushing back on TMC's attempt to dunk on the Dems with his KKK comment. If a KKK still exists today, which party do you expect they favor?

There are good people in both sides.

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Still the Democrats, why would I think that changed?

Almost Trumpian in its obviousness

You seem sensitive about this.

I don't fall for the usual troll tricks, reversals, pretending not to understand a post, baiting, confident lying. It amuses me to see you try them all. Just take the L, kiddo.

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"are-white-republicans-more-racist-than-white-democrats"
And found that the numbers are equal.

But they asked the wrong question. Are Democrat POC more racists than whites. Clearly they are.

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The government has already clobbered us and the government is running out of sticks. It has no state capacity left, thank god.

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As far as I can tell, the answers seem to be:

1) Because they trust self serving corporate money-men even less than bureaucrats.
2) Because more money for government doesn't always mean more money for far off self-serving bureaucrats, but more money transferred to "community initiatives" and local public works in which they are personally involved.

(It was kind of remarkable to me to see this playing out in some recent local news reports on London knife-crime in which the talking heads they got on were remarkably opposed to even people from different London boroughs getting involved, and reasonably indifferent to national funding levels, but were quite strident that more money should go to their own "local community initiative").

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"They want a dictator who will bring back order."
Thanks for explaining 2016 to me.
Also can we come up with a catchier phrase for "State capacity libertarianism "?

How 'bout Smithian Liberalism based on the Adam Smith quote from the comments in Arnold Kling's post linked above.

I think all the non-liberals will call foul. Since Smith is referring to Liberty may be "Smithian Libertarianism " is better.

Maybe, I like the symmetry with the Classical Liberal label which almost always refers to Smith in its description. Also, Libertarians seem to apply the precautionary principle to Smith's final point about what a sovereign's responsibilities are:

and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expence to any individual or small number of individuals, though it may frequently do much more than repay it to a great society…

The Third point is the State Capacity that (minarchist/anarchist) Libertarians are wary of.

Good point. May be call it " The Third Pillar"?

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I prefer “Fractal Federalism”.

FreddieFrac

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It’s better than the fratricidal federalism we have now.

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How about calling it "Econotarianism"?

(Or my second choice, "Cowenism")

Or Eco-wenism, that way Eco is also there.

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What's more interesting is the implication that government size is driven by demand effects. Makes some intuitive sense, but then there's also a history of wartime expansions that seems contradictory

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This model seems to fit the Philippines (the poor support PH strongman Duterte).

Bonus trivia: In 1997, the U.S. Agency for International Development (USAID) canceled most of its funding for the Harvard project after investigations showed that top HIID officials Andrei Shleifer and Jonathan Hay had used their positions and insider information to profit from investments in the Russian securities markets. Among other things, the Institute for a Law Based Economy (ILBE) was allegedly used to assist Shleifer's wife, Nancy Zimmerman, who operated a hedge fund which speculated in Russian bonds.[14]

https://www.felixsalmon.com/2008/06/andrei-shleifer-billionaire/ - worth at least $40M, probably several hundred million and possibly up to a billion dollars

His wife is pretty hot too, from her online photos.

“ This model seems to fit the Philippines (the poor support PH strongman Duterte).”

Crime disproportionately affects the poor. And anecdotally I can confirm this. As a grad student I lived in some crap ‘hoods. Including DC for a while. That’s where I learned there’s a commendably large black conservative/anti-crime silent majority.

So I wonder if this explains his support in the Philippines?

Yeah, I second that; I also lived in crap neighborhoods in San Jose, CA to save money, and nobody bothered me or my stuff, except, ironically, the last two weeks when I was already on my out they wrote with dirt, minor, removeable, graffiti on my luxury car . Poor people won't bother you if you don't bother them. As for Dutete's support, which includes my girl, much to my chagrin, I think, but can't prove, it's a protest vote against the rich. In PH something like fifty or fewer leading families control a good percentage of the economy (Joe Studwell's book). In GR it's not much different. It's the economies of scale caused by being big (rich get richer theme) that Adam Smith overlooked when he wrote about the division of labor in the hypothetical pin factory (and Jefferson overlooked when he extolled individual farmers, but, Hamilton got it right with tariffs and, indirectly, solving for the equilibrium, patents).

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"The impeachment process thus perfectly encapsulates everything that is wrong with the federal government. From start to finish, the impeachment is almost purely partisan and political rather than substantive, and it accomplishes nothing other than driving down even further any form of trust or confidence in the presidency, Congress, or even the Supreme Court (Chief Justice John Roberts will preside over the Senate trial)."

I don't like this one. To believe that this impeachment is "purely partisan" is that believe that abuse of power and obstruction of justice are nothing. Inconsequential. Acceptable as the status quo going forward. That is a horrendously dangerous idea.

What we needed, very much, was a looking beyond partisanship and politics to core values.

I mean, was anything in Mitt's speech actually wrong? Or is it just something we don't want to talk about ..

The impeachment was garbage. We're now to think that a candidate for the presidency can get away with corruption just because he's running. There's a lot of people out there who think cutting down on corruption, especially from the oval office, IS the job of the president. Mitt lined up with all the other sore losers trying to exact revenge.

You do realize the Republican argument is literally your argument?!? So Republican senators believe Trump is corrupt and engaged in inappropriate behavior, but because he is running in an election they don’t need to do anything about it because the voters can weigh in. Btw, who wouldn’t want a candidate willing to cheat to win an election?!?

It would probably be consistent with the position that Trump should be investigated, but not removed from office due to election to suggest that Biden should be investigated, but no action taken unless he had committed a crime, and simply left it up to the ballot? It wouldn't be consistent to suggest one or other the figures shouldn't be looked into?

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TDS causes you to miss the main point yet again: You can argue that Trump richly deserves to be the third president to face an impeachment trial...or that Trump is actually the victim of a coup. You might even win those arguments. But none of that matters if you really care about restraining the size of government. Come the end of the Senate trial that starts today, Trump will almost certainly still be in office, Democrats and Republicans will hate each other even more, and trust and confidence in Washington will be even lower than it already is.

"They called me mad. They called me insane. They called me looney. They were right!"

I asked you to look beyond, and not become mired in, partisanship and politics.

Your claim to be above partisanship is ridiculous but immaterial because the main point of the article is that none of that matters if you really care about restraining the size of government.

"They called me mad. They called me insane. They called me looney. They were right!"

Is that a logical statement? That limiting the power of The Executive (and that whole Branch) does not limit the power of the state?

I may be center-left in this moment of American politics, but I can certainly frame my argument above that, with rules both parties should abide.

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Congrats, the essay was an interesting look at SCL, but instead the comments are a derailment about the partisan outrage de jour.

From a chicken in every pot to a partisan shitshow in every philosophy thread.

I want off this ride.

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Stupidly unproductive. There is an election in November and the whole process did two things. Feed the beast of the progressive wing of the party, who probably will cost them the election, and a massive exercise in virtue signaling.

Trumps election exposed flaws in the body politic that should have elicited some self examination and correction. That didn't happen. Instead we saw an exquisitely produced media extravaganza that nobody is watching. CNN gets 750,000 viewers every night. FDR had up to 60 million for his radio chats. The whole thing from Mueller to impeachment was a flop that has consumed resources better used to figure out how to attract voters.

Where are all the bright and capable Democrats that working class people would trust with their future? I doubt is they are watching CNN either.

“But we won the Twittersphere!”

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Interesting link at Kling's site:
https://nypost.com/2020/02/01/ny-and-ca-spend-billions-more-in-taxes-than-tx-and-fl-and-get-worse-results/

It certainly makes the point that the quality of government matters more than how much you spend.

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This seems to me to be the exact opposite, a simple (but very weak) argument *against* state capacity libertarianism:

"Counterintuitively, the relative size and spending of government in the United States actually flattened or dipped during periods when trust and confidence in government picked up"

In other words, one of the following is true: smaller government led to more trust, more trust led to smaller government, or something else led to both smaller government and more trust. And if you accept the argument that people with less trust yearn for a dictator to bring back order, more trust is clearly good. So there is no position here where state capacity comes out on top, and one in which it is the worst.

"something else led to both smaller government and more trust"

I'd guess the patterns described are probably that during periods of high growth, the growth of government lagged economic growth and "shrunk" or stayed flat as a % of total. Economic growth probably then helps to explain trust (unfortunately!). Maybe that's a prediction that's off base though, but that's my guess. Control for economic growth in GDP/capita, see if there's still a pattern.

(That said I do think that being credible that private enterprise supplants government because it is competitively superior and not merely because government is systematically underfunded, is an important thing for pro-private sector and pro-market political parties to be able to do, and that they will not be trusted if they fail to build this credibility. Less sure about NG's stated temporal correlation.)

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I think the cause and effect is backwards here. I would argue that countries with high trust have smaller governments, because they already have institutions and norms to govern things, and they don’t need an explicit law to prevent bad behaviour.

Let me put it this way - do you think a country where everyone is angry and terrified of each other is going to also be comfortable with minimal laws? If you want to foster libertarianism you need to build trust and develop disaggregated problem solving institutions and norms.

I think you have cause and effect backwards. When things are going well, people start to believe that government had nothing to do with it and start cutting government. Only to discover that government was the one who played a role in making things right in the first place.

@RM - you have it backwards, when times are bad, people look for alternatives to capitalism and turn to government, out of desperation. Great Depression and flirtation with socialism (read: Social Security, a disaster) proves this.

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I suspect this is just an issue of interpretation.

People want more good government services exactly when the crappy corrupt government is failing to deliver good services.

Insofar as people perceive a lack of regulation as the manifestation of corruption, these two views are quite complimentary. For example, a corrupt government could fail to properly ensure food safety. I want more food inspections, and I'm not getting them because the government is corrupt.

Of course, the more libertarian minded might see nefarious intent or fear incompetent implementation given the current state of the government. The libertarians might even be right to have these concerns. However, this need not be the psychology of the actual participants in your poll.

In that sense, you could spin this finding as support for a variety of moderately pro-government views including (though not necessarily) state-capacity libertarianism.

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Good government has well defined functions that it carries out efficiently and professionally. Expansive governments try to do much more, and fail to do it well. We ask for more government when there is a crisis which causes disorder. Government is capable of calming a crisis, lowering the immediate disorder, but more government, particularly when that government was created in response to a crisis, rarely leads to the efficient and professional government that limited government can achieve when designed well to achieve well-defined objectives.

Democrats need to understand that for the people to trust them to expand the government, they must make the existing government run more efficiently and professionally, particularly in the areas of education and health care that impact everyone. Republicans need to understand that government is not simply the enemy. If they can separate government into essential and inessential parts, and get the essential parts to work very well, creating more order in our society, we will accept that the inessential parts can be eliminated.

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Bottom story of the day: guy who grew up in Soviet Union thinks everyone wants a dictator.

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We all love a good irony. Irony and hypocrisy are alike in that you don't have to know anything about what is best or worst; you need no deep knowledge of the meaning of the concepts; you just have to recognize the pattern.

Instead of hypocrisy, what about process? To me it seems economists should be very interested in processes in all their variety, but (again, to me) classical economics seems to be about having found one sort of process, and imagining it is a magic bullet for everything

Government is full of waste and corruption. People want certain services that the private sector seems unmotivated to provide in a satisfactory way, but they don't want the waste and the corruption. If that could be gotten rid of we could have the same services for half the cost. But democracy as we know it seems very poor at handling details, where is where waste and corruption reside.

I think we have a political system that discourages intelligent inquiry, or consideration of any issue that isn't what one party or the other sees as the "winning issue". Can we do something to subvert the current system that hates third parties and keeps us arguing about pseudo-issues?
plato.stanford.edu/search/searcher.py?query=voting+methods

that he really does not become inured to hardship and privation: it is only the mind, the gross omnivorous carrion-heavy soul which become inured……BE remembered even if only from passing from one hand to another, one mind to another, and it would be at least be a scratch, something, something that might make a mark on something that was once for the reason that it can die someday, while the block of stone cant be is because it never can became was because it cant ever die or perish

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Is it because people who distrust the Government also distrust business leadership?

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My take is that people are simply lazy and self-centered. They want more government when things are going bad financially, which is also the time when confidence in government (and in everyone else) is low. So yeah, no surprise here.

I would say people use the tools available to them. So a corrupt and incompetent government look good compared to no government. It’s why government schools and the post office remain in high esteem to the masses.

Better to dance with the devil you know then with the one you don’t.

Oh, that job at McDonalds is available... It's just harsh. I would say people use the EASIEST available tool to them. Government is a great black box, it just spills out money and people don't care about any macro effects.

You’re right. Easiest tool is correct descriptor.

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Oh, I see. Lack of trust in government leads to government expansion. We need to increase the power of government so that people will trust it again. That way, we avoid more government expansion.

So "state capacity libertarianism" is really just circular reasoning.

Yup. It's actually worse, since big government will likely create a bad economic situation, which will make people even more suspicious of government, and that in turn requires more government according to this brilliant theory.

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As government grows beyond a certain threshold it both makes its people more dependent on it and becomes less capable of delivering the services those people need. This is a formula for escalation and frustration.

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"Starve the beast" only works if having a balanced budget is the strange hill that legislators are willing to die on. I remember watching Jeff Flake go after the pork on C-span some years back. He stood alone. He no longer rants about pork.

The urge to "DO Something" ended up being stronger then the urge to live within our means. We will lose the currency over this. I shining gem lost now for sure.

Blaming the government was wrong headed in the first place. It should be seen as a information processing system and it's problems addressed as such. We need to adjust it's feedback mechanisms and get the information flowing again not strangle it in a bathtub (regardless of how appealing that sounds).

I feel like the last deficit hawk in the country most days...

It appears the Republican playbook is to keep social programs from expanding when out of power and cut taxes when in power. Maybe the plan is to make debt service such a large budget item that social spending has to fall. And to be fair, most Republican voters don’t want to see their government largesse cut either. They want other people weaned from the teat. It looks like democracy is working as intended. Then again, we have nothing to worry about if the MMT’ers are correct anyways.

Maybe the plan is to make debt service such a large budget item that social spending has to fall. And to be fair, most Republican voters don’t want to see their government largesse cut either.

That's been my impression for some time.

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The US government is spending 1.4% of it revenue on interest at the moment. While higher interests rates will bump that up, that is sustainable for a long time. There is no particular need to "inflate away" the debt. If the United States wanted to they could set a 2.5% inflation target and when inflation is low meet it by "printing" money. That would provide a considerable boost to government revenue when the economy is slow and would be very stable. The only way the US is going to "lose" their currency is if they destroy it on purpose. On the other hand, these days it's not too hard to believe they would decide to do that.

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I think the authors are making some assumptions and getting the causality backwards.

Just because regulations are growing, doesn't mean there were calls for more regulation. Maybe government agencies pushed out more regulations because that is their natural instinct.

Just as familiarity breeds contempt and absence makes the heart grow fonder. The more people see regulations, the less they like regulations. The less they see them, the more they feel like the ones we have are okay.

+1 - my thought exactly: "these guys have the causation backward"

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In Australia we don't have a huge amount of trust for the government, but we generally have more trust for public servants working in government departments. The fact that the public service in most developed countries works is one reason why politics has been able to get so silly and untrustworthy.

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It is the libertarian message turned into policy.

Government is good for two things. Taxing and warfare. Ok then, if that is the case how do I get on the gravy train?

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Quite evident in Pakistan. Even more paradoxically, as the degree of corruption increases, Pakistanis tend to want more regulation than less.

I suppose this has something to do with agency; people like the idea that someone's looking out for them, that someone is in power, even if that someone has malign intentions. This may also explain why people become more religious, or remember god more often, in bad times than in good.

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I'm going to call this 'state capacity libertarianism' for what it is. There is the part that is common sense - whatever you have, it should be effective. For your government needs, have a fair and effective government, for your market needs, an efficient market, for your families, healthy families. That's really not anything deep or profound. The other half is an excuse to put more power into the government because apparently its inefficiency is the direct result of a lack of 'capacity' rather than a lack of accountability, transparency, responsiveness, or something else.

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