Category: Political Science

Happiness and the quality of government

From John F. Helliwell, Haifang Huang, and Shun Wang:

This chapter uses happiness data to assess the quality of government. Our happiness data are drawn from the Gallup World Poll, starting in 2005 and extending to 2017 or 2018. In our analysis of the panel of more than 150 countries and generally over 1,500 national-level observations, we show that government delivery quality is significantly correlated with national happiness, but democratic quality is not. We also analyze other quality of government indicators. Confidence in government is correlated with happiness, however forms of democracy and government spending seem not. We further discuss three channels (including peace and conflict, trust, and inequality) whereby quality of government and happiness are linked. We finally summarize what has been learned about how government policies could be formed to improve citizens’ happiness.

Having read through the paper, I thought the main interesting result was that quality of service provision (effectiveness, rule of law, regulatory quality, and absence of corruption) is correlated with happiness whereas kind of democracy is not, with the latter democracy variable being an index related to voice, accountability, stability, and freedom from violence.

Of course it would be very interesting to rerun such a test during pandemic times.

My Conversation with Ross Douthat

We do another CWT, here is the audio and transcript (link corrected), a very good installment in the series.  Here is part of the summary:

Ross joined Tyler to discuss why he sees Kanye as a force for anti-decadence, the innovative antiquarianism of the late Sir Roger Scruton, the mediocrity of modern architecture, why it’s no coincidence that Michel Houellebecq comes from France, his predictions for the future trajectory of American decadence — and what could throw us off of it, the question of men’s role in modernity, why he feels Christianity must embrace a kind of futurist optimism, what he sees as the influence of the “Thielian ethos” on conservatism, the plausibility of ghosts and alien UFOs, and more.

A welcome relief from Covid-19 talk, though we did cover Lyme disease.  Here is one excerpt:

COWEN: Does the Vatican have too few employees? There’s a Slate article — it claimed in 2012, the Roman Curia has fewer than 3,000 employees. Walmart headquarters at the time had 12,000. If the Church is a quite significant global operation, can it be argued, in fact, that it’s not bureaucratic enough? They don’t actually have state capacity in the sense that state capacity libertarianism might approve of.

DOUTHAT: Right. State capacity libertarianism would disapprove of the Vatican model. And it reflects the reality that media coverage of the Catholic Church doesn’t always reflect, which is that in Catholic ecclesiology and the theory of the institution, bishops are really supposed to be pretty autonomous in governance. And the purpose of Rome is the promotion of missionary work and the protection of doctrine, and it’s not supposed to be micromanaging the governance of the world Church.

Now, I think what we’ve seen over the last 30 years — and it’s been thrown into sharp relief by the sex abuse crisis — is that the modern world may not allow that model to exist; that if you have this global institution that has a celebrity figure at the center of it, who is the focus of endless media attention, you can’t, in effect, get away with saying, “Well, the pope is the pope, but sex abuse is an American problem.”

And to that extent, there is a case that the Church needs more employees and a more efficient and centralized bureaucracy. But then that also coexists with the problem that the model of Catholicism is still a model that was modern in the 16th century. It’s still much more of a court model than a bureaucratic model, and pope after pope has theoretically tried to change this and has not succeeded.

Part of the reality is, as you well know, as a world traveler, the Italians are very good at running courts that exclude outsiders and prevent them from changing the way things are done. Time and again, some Anglo-Saxon or German blunderer gets put in charge of some Vatican dicastery and discovers that, in fact, the reforms he intends are just not quite possible. And you know, in certain ways, that’s a side of decadence that you can bemoan, but in certain ways, you have to respect, too.

Definitely recommended, a very fun CWT with lots of content.  And again, here is Ross’s (recommended) book The Decadent Society: How We Became a Victim of Our Own Success.

The Coronavirus Killed the Progressive Left

That is the topic of my latest Bloomberg column.  Yes trolling, but trolling with the truth.  Here are scattered excerpts:

— The egalitarianism of the progressive left also will seem like a faint memory. Elites are most likely to support wealth redistribution when they feel comfortable themselves, and indeed well-off coastal elites in California and the Northeast are a backbone of the progressive movement. But when these people feel threatened in their lives or occupations, or when the futures of their children suddenly seem less secure, redistribution will not be such a compelling ideal…

— The case for mass transit also will seem weaker, because subways and buses will be associated with the fear of Covid-19 transmission. In a similar fashion, the forces of NIMBY will become stronger, relative to those of YIMBY, because people secure in their isolated suburban homes will feel less stressed than those in densely packed urban apartment buildings.

— There is likely to be much more government intervention in some parts of the health-care sector, but it will focus on scarce hospital beds and ventilators, and enforce nasty triage, rather than being a benevolent move toward universal coverage. If anything, it will drive home the message that supply constraints are binding and America can’t have everything — hardly the traditional progressive message.

— — The climate change movement is likely to be another victim. How much have you heard about Greta Thunberg lately? Concern over the climate will seem like another luxury from safer and more normal times. In addition, the course of anti-Covid-19 efforts may not prove propitious for the climate change movement. If the fight against Covid-19 suddenly improves (perhaps a vaccine working very quickly?), Americans may come to expect the same in the fight against climate change.

There is much more at the link, of course some of you will hate it.  And of course Sanders and Warren did not exactly dominate voter sentiment, and that was largely pre-Covid.

My Coronavirus Conversation with Russ Roberts

We recorded this two days ago on the spur of the moment, the discussion is still current, here is the transcript and audio, here is the CWT summary:

Tyler and Russ Roberts joined forces for a special livestreamed conversation on COVID-19, including how both are adjusting to social isolation, private versus public responses to the pandemic, the challenge of reforming scrambled organization capital, the implications for Trump’s reelection, appropriate fiscal and monetary responses, bailouts, innovation prizes, and more.

Russ is more optimistic than I am, here is one excerpt on the economic side:

COWEN: Well, two to four weeks [of shutdown], those are easy cases. If you think of many service sectors as having to shut down say until August, which is quite a possible scenario in some cases even later. That to me is greatly concerning and it may vary across sectors. So if you think about the NBA, whenever the NBA is ready to play games again, I mean the players will show up the next day and there’ll be ready, right? That will come back very quickly. But if you think of small businesses, say restaurants, the big chains aside, they’re typically thinly capitalized.

Let’s say a significant portion of those are gone forever. And then when things are somewhat normal again, how does the economy re-scramble and re-constitute the organizational capital that was in those ongoing enterprises? That to me is a hugely difficult problem and whatever you think the government should or should not do, just spending a lot on fiscal stimulus will not ease that problem. That’s the actual destruction going on is the relationships, the organizational capital, the intangibles that will decay. Not over two weeks, probably not over four weeks but over four or five months or longer. Then I think that’s a matter really of great concern…

But even in China where the number of new cases is really in most parts of the country, genuinely very low, they are not returning with live sporting events. Keep in mind we will have a pool of never infected people, which will be fairly large in absolute numbers and what risks we will be willing to take. Insurance companies would allow, our liability system and corporate lawyers would be willing to allow. When you think through all of that stickiness, I think we’re really not so close to resuming many of these shutdown activities.

There is much more at the link, we start off on the personal side and then move into the larger issues.

“Herd immunity,” time consistency, and the epidemic yoyo

Saloni has long and detailed arguments against herd immunity.  Here is Caplan on Hanson.  Here is Kling on Hanson.  Here is the Taleb critique.  Here is the underlying Imperial College paper everyone is talking about.  The bottom line is that “locking everyone up to bend the hospital admissions curve” might have to last for at least a year to really choke off the coronavirus.

I’m not going to recap this complex debate, which most of you already have some inkling of.  Instead, I’d like to stress the issue of time consistency, noting that I’ll consider some extreme versions of policies to make exposition easier, even though no one advocates exactly those extreme versions.

Let’s say we expose lots of people to the virus rather quickly, to build up herd immunity.  Furthermore, we would let commerce and gdp continue to thrive.

Even if that were the very best policy on utilitarian grounds, it might not be time consistent.  Once the hospitals start looking like Lombardy, we don’t say “tough tiddlywinks, hail Jeremy Bentham!”  Instead we crumble like the complacent softies you always knew we were.  We institute quarantines and social distancing and shutdowns and end up with the worst of both worlds.

Alternatively, let’s say we start off being really strict with shutdowns, quarantines, and social distancing.  Super-strict, everything closed.  For how long can we tolerate the bankruptcies, the unemployment, and the cabin fever?  At what point do the small businesspeople, one way or another, violate the orders and resume some form of commercial activity?  What about “mitigation fatigue“?

Again, I fear we might switch course and, again, end up with the worst of both worlds.  We would take a big hit to gdp but not really stop the spread of the virus.

I also can imagine that we keep switching back and forth.  The epidemic yoyo.  Because in fact we find none of the scenarios tolerable.  Because they are not.

David Brooks postulates another possible form of time inconsistency:

What happens when there are a lot of people who’ve had the disease and become temporarily immune. They start socializing. Social distancing for the rest become harder if not impossible.

Plausible?

I greatly fear the epidemic yoyo.  And figuring out how to deal with it may be at least as important as calculating the numerical returns from various consistent policies.

I thank an anonymized correspondent for the term “epidemic yoyo.”

My Conversation with John McWhorter

This one was done with an associated public event, ah the good ol’ days!  Here is the audio and transcript, here is the summary:

Who can you ask about the Great American Songbook, the finer Jell-O flavors, and peculiar languages like Saramaccan all while expecting the same kind of fast, thoughtful, and energetic response? Listeners of Lexicon Valley might hazard a guess: John McWhorter. A prominent academic linguist, he’s also highly regarded for his podcast and popular writings across countless books and articles where often displays a deep knowledge in topics beyond his academic training.

John joined Tyler to discuss why he thinks that colloquial Indonesian should be the world’s universal language, the barbaric circumstances that gave rise to Creole languages, the reason Mandarin won’t overtake English as the lingua franca, how the Vikings shaped modern English, the racial politics of Gershwin’s Porgy and Bess, the decline of American regional accents, why Shakespeare needs an English translation, Harold Arlen vs. Andrew Lloyd Webber, whether reparations for African-Americans is a good idea, how living in Jackson Heights shapes his worldview, what he learned from his mother and father, why good linguistics students enjoy both Russian and Chinese, and more.

Excerpt:

COWEN: Let’s say I interview a job candidate using Skype or Zoom rather than face-to-face, how is that different linguistically? How should I adjust? What should I expect that’s different?

MCWHORTER: You mean if they’re not actually there in the room?

COWEN: Right, but I see them on the screen.

MCWHORTER: I think that’s fine.

COWEN: You think it’s just as good?

MCWHORTER: It helps bring the world together. Do I need to be in the room with the person, watching what they do with their legs, getting a vague sense of whatever their redolence happens to be?

COWEN: All of these people have showed up, right?

MCWHORTER: Yeah. To tell you the truth, all of that to me is a distraction. I would rather just hear their voice. Frankly, I despise Skype. You’re sitting there, you look bad, and it always cuts out. Yet your whole life these days is about “You wanna Skype?” And I’m thinking, “Yeah, it’s going to cut out, and we’re both going to look bad.”

But I would rather just hear the person. Maybe that’s because I’m kind of linguist-centric.

And:

COWEN: Here’s a very basic question. Let’s say immersion is not possible. How should an adult study a foreign language?

MCWHORTER: It’s hard. Sleep with somebody, frankly.

Recommended.

Will the coronavirus and the poor response doom Trump’s reelection chances?

Ross Douthat wonders maybe so (NYT), Arnold Kling says probably not:

Closing the border is his signature issue, and the Democrats have staked out a position as the “resistance” to that. I know that they think they can benefit from this crisis, but I would be surprised if they do.

My earlier Feb.3rd Bloomberg column suggested it would help Trump.  I won’t repeat the core claims of my column (some summarized here), but I am still sticking with that earlier call for a few reasons:

1. Few Americans will know/understand that some foreign governments did a better job than we did, and indeed that is already the case in many other policy areas.  “Foreign country did this better than us” is never an argument that works in American politics.

2. The literature on political business cycles suggests that absolute performance is not what matters, but rather whether the economy is gaining momentum.  So if the coronavirus situation is improving in the months leading up to November, Trump will receive some credit for that, no matter how poor the initial response.  And I think that plausibly will be the case.  Even if you believe in a second winter wave, it may take longer to materialize.

3. The literature on disaster spending suggests politicians are rewarded electorally for their response to disasters, not for preparation.  Enough of the American public still is oblivious to this issue that a major Trump action still could be marketed as timely and indeed pro-active.

4. For my hypothesis to be true, Trump at some point needs to make a “big push” kind of response, but I consider that highly likely, even if the push is ill-considered in its details.

The Consequences of Treating Electricity as a Right

In poor countries the price of electricity is low, so low that “utilities lose money on every unit of electricity that they sell.” As a result, rationing and shortages are common. Writing in the JEP, Burgess, Greenstone, Ryan and Sudarshan argue that “these shortfalls arise as a consequence of treating electricity as a right, rather than as a private good.”

How can treating electricity as a right undermine the aim of universal access to reliable electricity? We argue that there are four steps. In step 1, because electricity is seen as a right, subsidies, theft, and nonpayment are widely tolerated. Bills that do not cover costs, unpaid bills, and illegal grid connections become an accepted part of the system. In step 2, electricity utilities—also known as distribution companies—lose money with each unit of electricity sold and in total lose large sums of money. Though governments provide support, at some point, budget constraints start to bind. In step 3, distribution companies have no option but to ration supply by limiting access and restricting hours of supply. In effect, distribution companies try to sell less of their product. In step 4, power supply is no longer governed by market forces. The link between payment and supply has been severed: those evading payment receive the same quality of supply as those who pay in full. The delinking of payment and supply reinforces the view described in step 1 that electricity is a right [and leads to] a low-quality, low-payment equilibrium.

The Burgess et al. analysis coheres with my observations in India where “wire anarchy” is common (see picture). It’s obvious that electricity is being stolen but no one does anything about it because it’s considered a right and a government that did do something about it would be voted out of power.

The stolen electricity means that the utility can’t cover its costs. Government subsidies are rarely enough to satisfy the demand at a zero or low price and so the utility rations.

The consequences for electricity consumers, both rich and poor, are severe. There is only one electricity grid, and it becomes impossible to offer a higher quantity or quality of supply to those consumers who are willing and sometimes even desperate to pay for it.

Moreover,the issue is not poverty per se.

…the vast majority of customers in Bihar expect no penalty from paying a bill late, illegally hooking into the grid, wiring around a meter, or even bribing electricity officials to avoid payment. These attitudes are in stark contrast to how the same consumers view payment for private goods like cellphones. It is debatable whether cellphones are more important than electricity, but in Bihar we find that the poor spend three times more on cellphones than they do on elec-tricity (1.7 versus 0.6 percent of total expenditure).

Burgess et al. frame the issue as “treating electricity as right,” but one can can also understand this equilibrium as arising from low state capacity and corruption, in particular corruption with theft. In corruption with theft the buyer pays say a meter reader to look the other way as they tap into the line and they get a lower price for electricity net of the bribe. Corruption with theft is a strong equilibrium because buyers who do not steal have higher costs and thus are driven out of the market. In addition, corruption with theft unites the buyer and the corrupt meter reader in secrecy, since both are gaining from the transaction. As Shleifer and Vishny note:

This result suggests that the first step to reduce corruption should be to create an accounting system that prevents theft from the government.

Burgess et al. agree noting, “reforms might seek to reduce theft of electricity and nonpayment of bills” and they point to programs in India and Pakistan that allow utilities to cut off entire neighborhoods when bills aren’t paid. Needless to say, such hardball tactics require some level of trust that when the bills are paid the electricity will be provided and at higher levels of quality–this may be easier to do when there are other sources of authority such as trusted religious leaders.

In essence the problem is that the government is too beholden to electricity consumers. If the government could commit to a regime of no or few subsidies, firms would supply electricity and prices would be low and quality high. But if firms do invest in the necessary electricity infrastructure the government will break its promise and exploit the firms for temporary electoral advantage. As a result, the consumers don’t get much electricity. The government faces a time consistency problem. Independent courts would help to bind the government but those often aren’t available in developing countries. Another possibility is a conservative electricity czar who, like a conservativer central banker, doesn’t share the preferences of the government or the voters. Again that requires some independence.

In short, to ensure that everyone has access to high quality electricity the government must credibly commit that electricity is not a right.

Maybe they are the ones who know?

The top 1% are the only affluent group consistently more inclined than the general population to attribute variation in drive and IQ to both internal causes, particularly to innate causes (the top 1% also differ from the other affluent, at p < .01).  This said, the affluent are not more dismissive than others of environmental causal explanations.  Interestingly, across all income groups, “environmental” explanations for drive and IQ are more popular than the two internal explanations.

That is from a new paper (and here) by Elizabeth Suhay, Marko Klašnja, and Gonzalo Rivero.

Inequality protest sentences to ponder

In countries that did experience mass protests (Chile, Colombia, Ecuador and Bolivia) on the other hand, inequality was either constant or continued to decline in the last few years for which data is available.

Here is the full World Bank blog post by Francisco Ferreira and Marta Schoch.  That is via Gonzalo Schwarz of the Archbridge Institute, Gonzalo just wrote this excellent piece on economic mobility.

My Conversation with Garett Jones

Here is the transcript and audio, here is part of the opening summary:

Garett joined Tyler to discuss his book 10% Less Democracy, including why America shouldn’t be run by bondholders, what single reform would most effectively achieve more limited democracy, how markets shape cognitive skills, the three important P’s of the repeated prisoner’s dilemma, why French cuisine is still underrated, Buchanan vs. Tullock, Larry David vs. Seinfeld, the biggest mistake in Twitter macroeconomics, the biggest challenges facing the Mormon church, what studying to be a sommelier taught him about economics, the Garett Jones vision of America, and more.

Here is one bit:

COWEN: But let’s say it’s the early 1990s. Eastern European countries are suddenly becoming free, and they ask you, “Garett, what electoral system should we have?” What do you say?

JONES: What I really would go for is presidential systems, if you can handle it, something like a first-past-the-post system, where those people elected from local districts focused on local problems — which have less of a free-rider problem involved — go up to the parliament and actually argue their case. The presidential element is less important than the parliamentary idea of the single-district voting. I tend to think that creates more accountability on the part of the government.

And more:

COWEN: For the United States, what is the most effective way, in your view, that you would want us to have 10 percent less democracy? What’s the one thing you would change?

JONES: I would change the House of Representatives to a six-year term. I picked that because it’s not outside the range of plausibility, and because I think people would instantly understand what it accomplishes — not because it has the highest payoff, but because it balances payoff with plausibility in a democracy.

And on boosting IQ:

COWEN: But what’s the key environmental lever? Whatever Ireland did [to have induced an IQ rise], it’s not that people were starving, right? That we understand.

JONES: No, true.

COWEN: So why don’t we do more of whatever they did, whatever was done to the East Germans, everywhere?

JONES: Exactly.

COWEN: But what is that lever? Why don’t we know?

JONES: I would say that thing is the thing we call capitalism.

COWEN: Capitalism is a big, huge thing. Not all of capitalism makes us smarter.

JONES: Yeah, that’s the thing — figuring out which things within capitalism — what is it about living in a free society with competitive markets where, at least in our youth and middle age, we feel a need to sell ourselves as valuable creators. There’s something about that that probably is what’s most valuable for boosting cognitive skills. It’s a sort of demand-side desire to try to use our minds in socially productive ways. And I think in communism, we can —

COWEN: So marketing makes us smarter?

JONES: That’s what I would say, yeah.

There is much more at the link, an excellent Conversation.  Here you can order Garett’s book 10% Less Democracy: Why You Should Trust the Elites a Little More and the Masses a Little Less.  You can read the introduction to the book on-line.

The bureaucratization of U.S. foreign policy

The NSC [National Security Council] was established in the 1947 National Security Act, which named the members of the council: president, vice president and secretaries of state and defense. The function of the council “shall be to advise the president with respect to the integration of domestic, foreign, and military policies relating to the national security.” The law required regular meetings…

Mr. Kissinger grew the council to include one deputy, 32 policy professionals and 60 administrators. By my count, alumni of his NSC include two secretaries of state, four national security advisers, a director of national intelligence, a secretary of the Navy, and numerous high-ranking officials in the State, Defense and Treasury departments as well as the Central Intelligence Agency.

But the NSC has only continued to expand. By the end of the Obama administration, 34 policy professionals supported by 60 administrators had exploded to three deputies, more than 400 policy professionals and 1,300 administrators.

The council lost the ability to make fast decisions informed by the best intelligence.

Here is more from John Lehman (WSJ).

Does political polarization limit corruption?

Using panel data from the US states, we document a robust negative relationship between state-level government corruption and ideological polarization. This finding is sustained when state polarization is instrumented using lagged state neighbor ideology. We argue that polarization increases the expected costs of engaging in corruption, especially deterring marginal low-level corruption. Consistent with this thesis federal prosecutorial effort falls and case quality increases with polarization. Tangible anti-corruption measures including the stringency of state ethics’ laws and independent commissions for redistricting are also associated with increased state polarization.

That is from a new paper by Michael Melki and Andrew Pickering.  Via the excellent Kevin Lewis.

My Conversation with Tim Harford

Here is the transcript and audio, here is part of the summary:

Tim joined Tyler to discuss the role of popular economics in a politicized world, the puzzling polarization behind Brexit, why good feedback is necessary (and rare), the limits of fact-checking, the “tremendously British” encouragement he received from Prince Charles, playing poker with Steve Levitt, messiness in music, the underrated aspect of formal debate, whether introverts are better at public speaking, the three things he can’t live without, and more.

Here is one bit near the opening:

COWEN: These are all easy questions. Let’s think about public speaking, which you’ve done quite a bit of. On average, do you think extroverts or introverts are better public speakers?

HARFORD: I am an introvert. I’ve never seen any research into this, so it should be something that one could test empirically. But as an introvert, I love public speaking because I like being alone, and you’re never more alone than when you’re on the stage. No one is going to bother you when you’re up there. I find it a great way to interact with people because they don’t talk back.

COWEN: What other non-obvious traits do you think predict being good at public speaking?

HARFORD: Hmmm. You need to be willing to rehearse and also willing to improvise and make stuff up as you go along. And I think it’s hard for somebody to be willing to do both. I think the people who like to rehearse end up rehearsing too much and being too stiff and not being willing to adapt to circumstances, whereas the people who are happy to improvise don’t rehearse enough, and so their comments are ill formed and ill considered. You need that capacity to do both.

And another segment:

HARFORD: …Brian Eno actually asked me a slightly different question, which I found interesting, which was, “If you were transported back in time to the year 700, what piece of technology would you take — or knowledge or whatever — what would you take with you from the present day that would lead people to think that you were useful, but would also not cause you to be burned as a witch?”

COWEN: A hat, perhaps.

HARFORD: A hat?

COWEN: If it’s the British Isles.

HARFORD: Well, a hat is useful. I suggested the Langstroth beehive. The Langstroth beehive was invented in about 1850. It’s an enormously important technology in the domestication of bees. It’s a vast improvement on pre-Langstroth beehives, vast improvement on medieval beehives. Yet, it’s fairly straightforward to make and to explain to people how it works and why it works. I think people would appreciate it, and everybody likes honey, and people have valued bees for a long time. So that would have been my answer.

And:

COWEN: I’ve read all of your books. I’ve read close to all of your columns, maybe all of them in fact, and I’m going to ask you a question I also asked Reid Hoffman. You know the truths of economics, plenty of empirical papers. Why aren’t you weirder? I’ve read things by you that I disagreed with, but I’ve never once read anything by you that I thought was outrageous. Why aren’t you weirder?

The conversation has many fine segments, definitely recommended, Tim was in top form.  I very much enjoyed our “Brexit debate” as well, too long to reproduce here, but I made what I thought was the best case for Brexit possible and Tim responded.