Category: Law
Why Does India Have So Few Tourists?
Pragati: India has tremendous advantages as a producer of tourism, but its tourism sector is far too small. India is underperforming and in the process giving up tens of billions of dollars in foreign exchange revenue that could lift millions out of poverty.
Nearly nine million tourists visited India in 2016 generating foreign exchange revenues of about $23 billion USD annually. At first glance, the figures are impressive. Tourism is one of India’s largest export sectors, beating out such leading sectors as apparel ($17.4 billion, 2014) and medicinals and pharmaceuticals ($13.9 billion, 2014). A more careful examination, however, reveals that India’s tourism sector is small compared to its potential.
The table below shows the top ten countries by international visitors. France leads the list with 84.5 million visitors a year, about ten times the number of visitors to India. The European countries, France, Spain, Italy, Germany and the UK benefit by being close to one another which generates significant mutual tourism. Mexico, Russia and Turkey, however, all have approximately three to five times as many tourists as does India. China has more than six times as many tourists as does India.
Although India underperforms on the number of visitors it does very well on earnings per visitor…Remarkably, India earns more per visitor than does China and almost as much as does the United States, a whopping $2,610. In fact, despite the small number of tourists, India’s revenues per tourist make it 9th in the world for total tourism revenues, just above Mexico. Visitors to India spend a lot of money which makes it all the more remarkable that India has so few visitors.
That’s me writing in Pragati, an Indian journal of ideas. India could increase its earnings from tourism by tens of billions of dollars with just a few simple reforms–see how at the link and some additional ideas for increasing tourism are in a podcast that I did with Amit Varma.
And, of course, even without reforms on the supply side there should still be more tourists in India as there are a great number of things to see!
Temple at Chittorgarh Fort.
Udaipur (Sahelion Ki Bari) with early 18th century fountains that work entirely by gravity.
Ajanta caves.
You can calm down about internet service providers selling your browser history
In light of these laws and institutions safeguarding user privacy, members of the House of Representatives need not fear that voting for the joint resolution to rescind the FCC’s privacy rule will mark the end of individual privacy on the Internet.
Here is the full piece by Ryan Radia, via Brent Skorup. He also recommends this longer Georgia Tech paper of broader interest (pdf).
Supply Side Health Care Reform
We fight over health care policy because we focus on demand and redistribution. We could reach greater agreement if we focused on supply and innovation. What are the key areas where agreement is likely?
1) Cancer kills both Republicans and Democrats so more spending on medical research is likely to reach broad agreement. As I said in Launching:
Looking at the future, if medical research could reduce cancer mortality by just 10 percent, that would be worth $5 trillion to U.S. citizens (and even more taking into account the rest of the world). The net gain would be especially large if we could reduce cancer mortality with new drugs, which are typically cheap to make once discovered. A reduction in cancer mortality of this size does not seem beyond reach, and the value of such a reduction in mortality far exceeds that of spending more on medical care today. Yet because the innovation vision is not central to our thinking, we overlook potentially huge improvements in human welfare.
By greater spending on medical research, I mean not only greater spending through the NIH but also a commitment to innovation policy more broadly. We know, for example, that price controls kill medical research so no price controls. We can also improve the FDA. I would favor less regulation but there are other methods to speed up the approval process which could command bipartisan support such as greater funding of the FDA. The FDA is also not monolithic, some departments are better than others, so we can reform the FDA by making it more like the better parts of itself.
In thinking about pharmaceutical regulation we also need to remember that 80-90% of prescriptions are for generic drugs and due to intense competition, generic drug prices are low and falling–so lets build on the parts of the US health care system that work well by keeping the entry barriers to entry in the generics market low.
2) Increase the supply of physicians. Despite an aging population and greater demand, the number of MDs per person has been trending downwards! Increasing physician supply could involve a combination of increased immigration of foreign physicians (skilled immigration is really a non-brainer that receives widespread support), increased slots at medical schools and in residency programs (via Medicaid), increased support for allowing nurse practitioners, dental hygienists and so forth and making occupational licenses portable across states. (In addition to making it easier for foreign physicians to come to US patients we should also make it easier for US patients to travel to foreign physicians–patients without borders). None of these things are easy to do, of course, but neither are they riven by ideological differences.
3) Demand price transparency from hospitals and other health care providers. In real markets, a price is a signal wrapped up in an incentive. With few exceptions, we don’t have real markets in health care and so “prices” neither signal nor incentivize. Thus, I don’t expect miracles from “price” transparency and this is a policy that could go wrong but transparency would still allow for some standardization, comparison, and computation of tradeoffs. Price transparency would also limit some of the worst forms of bill abuse. Even the Soviets found prices to be useful for these purposes.
Other supply side reforms that could find bipartisan support?
Bengaluru [Bangalore] stops terror attacks with traffic jams
According to a report by Nikhil Gangadhar in the Deccan Herald, Bengaluru may be the first city in the world that stopped at least one terrorist attack using just bad traffic.
That’s right, you heard correctly…a terrorist attack may have been averted with just a traffic jam. Nikhil reports that a man named Habib Mia, arrested in Tripura and brought to Bengaluru last week, told police that terrorists who attacked IISc on December 28, 2005, also planned to attack other seminar events in parallel to tarnish India’s reputation.
However, an attacker who was travelling to the Indian Institute of Management on Bannerghatta Road apparently got caught in a traffic jam, and the seminar he was supposed to attack ended before he could get there.
What’s more, the terrorists also reportedly dropped a plan to attack an event at PES Institute of Technology because there was no easy escape route available.
Here is the full story, via Ashish Kulkarni.
Welfare and warfare
But it is also a question of history and, more specifically, of how welfare states in the rest of the world developed alongside warfare. European welfare states began in Prussia at the end of the 19th century, when war with France required the mobilisation of a large number of civilians. Britain’s welfare state has its origins in the discovery that many of the men who presented themselves to recruiting offices during the Boer war were not healthy enough to fight. Before the second world war, British liberals would have seen the creation of a government-run national health service as an unwarranted intrusion of government into private life. After 1945 it seemed a just reward for a population that had suffered.
In America this relationship between warfare and health care has evolved differently. The moment when the highest proportion of men of fighting age were at war, during the civil war (when 13% of the population was mobilised), came too early to spur the creation of a national health system. Instead, the federal government broke the putative link between war and universal health care by treating ex-servicemen differently from everyone else. In 1930 the Veterans Administration was set up to care for those who had served in the first world war. It has since become a single-payer system of government-run hospitals of the kind that many Americans associate with socialised medicine in Europe. America did come close to introducing something like universal health care during the Vietnam war, when once again large numbers of men were being drafted. Richard Nixon proposed a comprehensive health-insurance plan to Congress in 1974. But for Watergate, he might have succeeded.
That is from The Economist.
Making public goods excludable again
One of Beijing’s busiest public toilets is fighting the scourge of toilet paper theft through the use technology – giving out loo roll only to patrons who use a face scanner.
The automated facial recognition dispenser comes as a response to elderly residents removing large amounts of toilet paper for use at home.
Now, those in need of paper must stand in front of a high-definition camera for three seconds, after removing hats and glasses, before a 60cm ration is released.
Those who come too often will be denied, and everyone must wait nine minutes before they can use the machine again.
But there have already been reports of software malfunctions, forcing users to wait over a minute in some cases, a difficult situation for those in desperate need of a toilet.
The camera and its software have also raised privacy concerns, with some users on social media uneasy about a record of their bathroom use.
Here is the full story, via Michelle Dawson.
The Baffling Politics of Paid Maternity Leave in India
Policy makers and intellectuals in India are well informed about politics and intellectual developments in the United States and Europe. Among this group, for example, one can easily strike up a conversation about say Angus Deaton on RCTs versus structural econometric modelling. The similarity in the conversation extends far beyond the scientific, however, in ways that I sometimes find baffling.
When I gave a lecture at a local university, for example, I apparently shocked the students when I said matter-of-factly:
India would be a better country if it were richer and more unequal.
I think India’s extreme poverty makes this obviously true in a utilitarian sense, i.e. better for Indians, but it wasn’t so obvious to the students some-of-whom discussed inequality in terms that could easily have been duplicated at Berkeley. The inequality conversation has jumped the pond in ways that seem to me to be completely inappropriate.
Writing in the Times of India, Rupa Subramanya gives another example, a bill for paid maternity leave that has just passed the Indian parliament (waiting only on the president’s signature). As I pointed out earlier, by far the majority of Indians are self-employed and in the informal sector. The very idea of paid maternity leave, therefore, is bizarre. Is the right hand to pay the left?
As Subramanya writes, even fewer women than men work in the formal sector:
[W]omen’s labour force participation in India is 25% or less, as variously estimated by the International Labour Organisation (ILO) and from India’s National Sample Survey Organisation (NSSO) data. What is more, estimates by MLE and ILO suggest that less than 5% of female workers aged 15-49 are in the formal or organized sector. What this implies is that effectively those covered by paid maternity leave whether the old or the new provision are at best a small number of relatively privileged women working in formal sector jobs. The vast number of women working in the informal sector effectively have no social protections at all, forget about paid maternity leave benefits.
Add to this the well-known reality of poor implementation and even poorer monitoring and the truth is relatively few women benefit from paid maternity leave now, and by definition, therefore, very few stand to gain from the benefits being increased.
…Legislating generous benefits in a still poor country is putting the cart before the horse and is sure to fail. All that will happen are more frustrated women unable to find work, employers unwilling to hire women, and more non-compliance and non-enforcement of existing laws for a state that is already stretched thin trying to do far too many things with too few resources.
So why pass a bill which is so at odds with the real issues facing women on the ground? I think Subramanya is correct:
It’s hard to escape the impression that the main purpose of the increased maternity leave benefits is public relations, either aimed at educated urban women or targeted for international consumption where India is approvingly clubbed with rich countries like Norway and Canada as having the highest paid maternity leave in the world.
My Conversation with Malcolm Gladwell
He was superb, here is the transcript, audio, and video. We considered satire as a weapon, Harvard, long-distance running, Washington vs. NYC, Daniel Ellsberg and Edward Snowden, Caribbean culture and intellectual history, and of course Malcolm’s mom, among other topics. His answers are so fluid and narrative they are hard to excerpt, but here is one bit from him:
COWEN: Overrated or underrated, the idea of early childhood intervention to set societal ills right?
GLADWELL: Overrated because to my mind it’s just another form . . . it became politically impermissible to say that certain people in society would never make it because they were genetically inferior. So I feel like that group, it’s like, “All right, we can’t say that anymore. We’ll just move the goalpost up two years.” And we’ll say, “Well, if you don’t get . . .” Or three years — “If you don’t get the right kind of stimulation by the time you’re three, basically it’s curtains.”
Why is that argument, which we decided we didn’t like it when they set the goalpost at zero, and somehow it’s super-important and legitimate and chin-stroking-worthy when they moved the goalpost to three. Truth is, people, it’s not over at three any more than it was over at zero. There are certain things that it would be nice to get done by the age of three. But if they’re not, the idea that it’s curtains is preposterous. It’s the same kind of fatalism that I thought we had defeated in the . . .
If you want to say that the goalpost should be at 30, then I’m open to it.
I asked what changes he would make to higher education:
GLADWELL: OK. I would establish a set of baseline criteria for admissions, and then I would have a lottery after that. So if you’re in the top 2 percent of your high school class — 5 percent, whatever cutoff we want — following test scores at a certain point, whatever cutoff we want, some minimum number of other things you do — you just go into the pot and we’re pulling out names. I’d probably triple or quadruple the size in the next 10 years, open campuses — probably two other campuses in the United States, one overseas.
I had this idea, I’m not sure how you’d do it, where I think that it would be really, really useful to ban graduates of elite colleges from ever disclosing that they went to an elite college.
I thought the Steve Pearlstein material was perhaps Malcolm’s highlight, but you need to read it straight through.
Here is a very short bit from me:
Most of my questions will be quite short, but my first question will be really, really long. Since everyone knows you and your work so well, I asked myself, “Who is Malcolm Gladwell?” And I tried to come up with an answer. I’ll give you my answer, and then you can correct me or add to that, and this will take a little while.
Definitely recommended.
The two Irelands have ties Brexit cannot destroy
That is the title of my latest Bloomberg column, here is one bit from it:
…the U.K. seems to be in a crisis of ideas, as outlined by Michael Moran in his recent “The End of British Politics?”. He points out that the earlier Protestant, imperial and social democratic rationalizations for the political union largely have fallen away. Scottish separatism — now very much back on the agenda — is one manifestation of this problem. In such a setting, it’s possible to imagine a slightly different legal status for Northern Ireland, where the border check — if there is to be one — is done for flights to London rather than for ground transport to the Republic of Ireland, such as on the ground in Donegal County.
I don’t expect full union anytime soon, as I explain in the piece, but here is the closing tag line:
I’m seeing a world where the past is emerging as stronger than we had thought, and where nationalism has arguably been the most influential idea since the 17th century. That probably means the two Irelands still have some surprises in store for us.
Do read the whole thing. And now there is talk of a Northern Irish referendum.
I wish to thank Ray Lopez for the pointer to Moran.
Fatigued Physicians Make Mistakes and Harm Patients
Fatigued drivers cause accidents. In response to this obvious fact, we limit bus and taxi drivers to a maximum of 10 hours of driving after 8 consecutive hours off duty. Yet when it comes to physicians, the current standard is significant more lax; first-year residents are restricted to 16-hour shifts! That already is nuts. I often teach a night class, 7:20-10 pm and I always try to teach the more difficult material early because by 9pm I am not at the top of my game. Needless to say, medical residents are far more stressed and fatigued than teachers. Moreover, while first year residents can work up to 16 hours, second year residents can work up to 24 hours straight and even up to 30! Isn’t it amazing how one year of residency can teach physicians how to function without sleep?
The current standards, which strike me as absurdly low, are actually due to restrictions put in place in 2003 and 2011–restrictions which are now being lifted. The new plan is to allow longer hours for first year residents:
Rookie doctors can work up to 24 hours straight under new work limits taking effect this summer — a move supporters say will enhance training and foes maintain will do just the opposite.
A Chicago-based group that establishes work standards for U.S. medical school graduates has voted to eliminate a 16-hour cap for first-year residents. The Accreditation Council for Graduate Medical Education announced the move Friday as part of revisions that include reinstating the longer limit for rookies — the same maximum allowed for advanced residents.An 80-hour per week limit for residents at all levels remains in place under the new rules.
Studies have found that physicians who work longer hours are much more likely to get into auto accidents on the way home. Physicians and nurses who work longer hours also make more medical mistakes.
The main argument in favor of long hours is that the 2003 and 2011 restrictions do not seem to have greatly improved patient safety. That is surprising but the micro and experiential evidence that fatigue makes for mistakes is so strong that the lesson to be drawn isn’t that longer hours don’t lead to mistakes–the lesson is either that the restrictions were routinely ignored (as the National Academy of Science study found), that the studies done to date are misleading for a statistical or design reason or that there is another constraint in the system that needs to be examined. One possibility for another constraint is that handoffs of patients between physicians aren’t handled well. But that means that poor handoffs are killing as many people as fatigue!
In no other field do we tolerate error as much as we do in medical care. Why does the government regulate driving hours more than medical hours? It’s not just the government. It’s amazing that in a society where McDonald’s can be sued for making people fat that the tort system hasn’t shut down absurdly long residency hours (there have been a few cases). Medical care is a peculiar field (cue Robin Hanson).
Aside from Hanson-type factors, a key factor that explains what is going on is that residents are a huge profit source for the hospitals. Much like student athletes, residents are underpaid. As a result, hospitals want to use residents as much as possible so they lobby for longer hours even at the expense of patient safety.
South Sudan sentences to ponder
Late last month, famine was declared in two counties of the civil-war torn East African country of South Sudan. With 100,000 people at risk for dying of starvation in that area alone and millions more on the brink of crisis-level food shortages throughout the country, South Sudanese President Salva Kiir promised “unimpeded access” to humanitarian aid organizations working there.
A few days later the South Sudanese government hiked the fee for work permits for foreign aid workers from $100 to $10,000.
Here is further information, via Tom Murphy.
Excellent Yuval Levin piece on the House health care proposal
It is not easy to excerpt, so do read the whole thing. But here is the closing bit:
And in any case, momentum depends on a strong, successful push at the start. This could have started better, and it needs to end smarter.
A Border Adjustment Tax just means more new loopholes
That is the focus of my latest Bloomberg column, here is one bit from it:
Under one somewhat-neglected feature of [one version of] the tax, companies could no longer deduct advertising, interest, rent and employee benefit costs from their bills for tax due. This is a recipe for major tax dodges and the further politicization of government-business relations.
To think through these problems, note that under circulating versions of the tax reform a company still can deduct its asset acquisition and inventory costs. So, to cite one potential problem, if a company acquires a building it can deduct that expense, but not if it rents a similar building. The result is that the rental market would suffer badly. Some companies would put up their own structures, but others might engage in temporary “repurchase” agreements so they are owning their space (“asset acquisition”) rather than renting it. That’s just one example of the big loopholes the new tax code could create.
There is no single canonical account of how a border adjustment tax would work, so maybe that loophole won’t apply to your preferred version. (Here is a 2016 outline, but expect further changes and details; this KPMG document is useful on options.) But the general point is this: By creating such a sharp distinction between deductible and nondeductible business expenses, the opportunities for tax arbitrage and tax-code lobbying are huge. The suspicion is that most business expenditures could, one way or another, be converted into forms that allow for full and immediate expensing.
How about a version of the tax that allows for deductibility of newly constructed but not purchased buildings? Well, that would encourage overinvestment in new construction. You can also imagine building purchases accompanied by overbilled site modifications (with some of that money being returned in another associated transaction), so the refitted structure could count as new construction.
As I say in the piece, please do note that many people have their particular favored versions of the tax, sometimes designed to avoid various specific problems that are raised. But I don’t think any version of the tax will avoid these problems in general. Full and immediate expensing is a potent lure, and it will attract a great of gamesmanship.
ACHA, the Republican health care plan, appears to be a non-starter
Here is Ezra Klein on the new health care bill. Avik Roy doesn’t seem entirely crazy about it either. I don’t have anything to add to their two fine reports. Read Bob Laszewski too.
The new era of segregation
Here is the second video based on The Complacent Class:
Here is the first video and a way to sign up for the whole series.