Category: Political Science
The economics of travel visas
Bob Lawson and Jayme Lemke write:
This paper examines travel visa restrictions in 188 countries. We measure travel visa requirements (1) facing foreign visitors into a given country and (2) facing citizens of a given nation traveling abroad. Our analysis shows that countries are more likely to impose visas on foreign visitors when they are large, but less likely when they are rich and economically free. Citizens from richer and more populous countries face fewer travel visa requirements when traveling abroad. Countries are less likely to impose visa requirements on similar nations.
What is the state employee union wage premium?
How much does collective bargaining matter? On Twitter, Will Wilkinson asks for data. I find this web site specifying the average Virginia state employee to be earning $50,298. Rortybomb says that for Wisconsin the comparable number is $48,267.
Yet Wisconsin had collective bargaining for state employees and Virginia does not. Of course this comparison is a gross one and it is not holding constant the composition of each work force, seniority, cost of living differences, and it also does not seem to pick up possible differences in benefits. Furthermore it does not consider the 48 other states. Yet, crude as this one-to-one comparison may be, it is more empirically sophisticated than most (all?) other discussions I have seen.
This David Blanchflower and Alex Bryson paper (see pp.9-10), using 1980s data, finds a union wage premium, for state employees, of 14.5 percent, with the premium being strongest for unskilled workers, as is the case in the private sector as well. (NB: I am not sure if they are adjusting for differential benefits but I think not.) Alan Krueger tells us that the union/non-union wage gap is smaller in the public sector than in the private sector ("overwhelming evidence").
I'm not pushing any particular answer, I'd just like to put the question on the table. What else do you all know?
Addendum: from Adam Ozimek: "The regression coefficients on page 8 of the report show that the union wage premium is between 15% to 16%, while the public sector wage discount is around 11%, meaning unionized public sector employees are paid 4% to 5% wage premium." Adam also provides further references and discussion.
The new federalism, New Hampshire style
A lot of governors don't want high-speed rail and at least one state is wondering whether it wants a new hospital:
New Hampshire Public Radio ran a story yesterday about Governor Lynch's request that hospitals in the state stop building new facilities. Normally, governors never miss an opportunity to encourage new business in their state, because in most markets, greater investment leads to better services or lower prices. Finally, policy makers understand that the normal rules don't apply in health care:
[T]hese facilities are driving up utilization and driving up health care costs. Those are costs that we all see in our ever-increasing health insurance premiums. To that, I say enough.
That is from Andrew Samwick. This shows how deeply the current system of both health care finance and American federalism is broken. It is not that the governor was suddenly persuaded by…Robin Hanson. Instead, the shadow value of "money to spend as the governor wants it spent" is rising rapidly and old political equilibria are falling away, in Wisconsin too.
In a nutshell
What do twin adoption studies show?
"A case in point is provided by the recent study of regular tobacco use among SATSA's twins (24). Heritability was estimated as 60% for men, only 20% for women. Separate analyses were then performed for three distinct age cohorts. For men, the heritability estimates were nearly identical for each cohort. But for women, heritability increased from zero for those born between 1910 and 1924, to 21% for those in the 1925-39 birth cohort, to 64% for the 1940-58 cohort. The authors suggested that the most plausible explanation for this finding was that "a reduction in the social restrictions on smoking in women in Sweden as the 20th century progressed permitted genetic factors increasing the risk for regular tobacco use to express themselves." If purportedly genetic factors can be so readily suppressed by social restrictions, one must ask the question, "For what conceivable purpose is the phenotypic variance being allocated?" This question is not addressed seriously by MISTRA or SATSA. The numbers, and the associated modeling, appear to be ends in themselves."
Bahrain no fact of the day
Bahrain's security forces are the backbone of the Al Khalifa regime, now facing unprecedented unrest after overnight shootings. But large numbers of their personnel are recruited from other countries, including Jordan, Pakistan and Yemen.
Tanks and troops from Saudi Arabia were also reported to have been deployed in support of Bahraini forces.
Precise numbers are a closely guarded secret…
Here is more, yet no numbers. The implied prediction is that they are willing to shoot.
Better than the filibuster?
To avoid a vote on a proposal to limit collective bargaining rights in the state of Wisconsin, 14 legislators have fled the state, to an undisclosed location. I am not sure if there is a precedent for this. The reason they crossed state lines was to dodge the Wisconsin police.
It turns out that "Republicans hold a 19-14 majority, but they need at least one Democrat to be present before voting." The link is here and for the pointer I thank Brian Hooks.
Arnold Kling quiz of the day
Which of the following impediments to economic adjustment do you believe to be the most important?
a) the cost of establishing a new enterprise
b) the cost of integrating new workers and equipment into an existing enterprise
c) the cost of adapting physical and human capital to new circumstances
d) the cost of whiting out an old price list (menu) and updating it with new prices
If you answered (d), then congratulations–you have shown your New Keynesian bona fides.
Arnold, by the way, does not answer (d). The link is here. Elsewhere at EconLog, here is a very good Bryan Caplan post on the evolution on punditry and the political spectrum.
The evolution of American federalism
Refresh my memory, are we expanding or contracting Medicaid? Why is it that I can't seem to remember!?
The Obama administration would permit a controversial plan by Arizona's governor to cut an estimated 250,000 impoverished adults from Medicaid, despite a provision in the new health-care law barring states from tightening their eligibility standards for the program, federal officials said Wednesday.
Here is more. In a not totally unrelated development, Florida's governor rejects $2 billion in federal aid for a high-speed rail line linking Tampa and Orlando. What's the implicit MRS on federal funds vs. unrestricted funds here?
What will "the new federalism" look like? I see rapid evolution.
Government is raising the value of a life
The Environmental Protection Agency set the value of a life at $9.1 million last year in proposing tighter restrictions on air pollution. The agency used numbers as low as $6.8 million during the George W. Bush administration.
The Food and Drug Administration declared that life was worth $7.9 million last year, up from $5 million in 2008, in proposing warning labels on cigarette packages featuring images of cancer victims.
The article is here. If the goal is to give current people what they want, arguably this makes sense and perhaps it does not go far enough. Death is…BAD. If the goal is to maximize real gdp per capita, or most other macroeconomic indicators, it makes sense to value human life at replacement cost (and here) and this policy change does not make sense. I'm not arguing for either standard and indeed I think they both lead to absurdities. Instead the point is this: theoretical ordinal welfare economics and applied welfare economics, as represented by wealth measures, do not coincide as much as many economists like to think. This gap becomes increasingly important as health care and safety provision increase, relative to the size of the economy as a whole.
What the Chinese have done is to neglect health care investments (until very recently) and basically maximize gdp growth. They wanted to have fewer people anyway, so why spend money to keep ailing people around? We find this horrible when presented in such explicit terms, and yet we admire their achievement of the end of growth maximization.
What do India’s cities need?
One of the worst aspects of Indian democracy is that power is often lodged at the state rather than the city level, and states are often dominated by rural voters who, just as in the U.S. Senate, have far more representation per capita. India's cities need more control over their own destinies.
That is from Ed Glaeser's Triumph of the City: How Our Greatest Invention Makes us Richer, Smarter, Greener, Healthier, and Happier.
Articles for our times
The Politics of Military Reform in Post-Suharto Indonesia: Elite Conflict, Nationalism, and Institutional Resistance, by Marcus Mietzner. The abstract:
Since the fall of Suharto's New Order regime in 1998, Indonesia has launched a number of initiatives to reform its previously omnipotent armed forces. The extent to which these reforms have resulted in real political change, however, has been subject to heated debate in Indonesia and in capitals of Western donor countries. The two camps have often advanced highly antagonistic accounts of the military reform process. Human rights groups and political activists, on the one hand, have contended that despite formal reforms, there has been almost no change in the way the armed forces operate. They maintain that the military continues to influence, and even dominate, political and economic affairs. The opposing view, which is frequently argued by foreign proponents of restoring full military-to-military ties with Indonesia, states that the armed forces are now fully subordinated to civilian democratic control, and that substantial progress has been made in imposing international human rights standards on the troops.
This study presents an evaluation of military reform efforts in Indonesia eight years after Suharto's resignation. Applying the two-generation model of military reform developed by Cottey, Edmunds, and Forster, it proposes that Indonesia has made remarkable progress in advancing first-generation military reforms, which include extensive changes to the country's institutional framework, judicial system, electoral mechanisms, composition of representative bodies, and the responsibilities of security agencies. In combination, these reforms have successfully extracted the armed forces from formal politics, have undermined many of their institutional privileges, and have produced a polity in which the military arguably no longer holds veto power to overturn decisions made by the civilian government.
You can start the rest of your reading here. The Wikipedia version is here.
What conservatives want (don’t want)
This is from a poll of self-identified conservative Republicans:
When we asked last month about their thoughts on the best way to reduce the deficit, here’s how they replied:
†¢ 56 percent said cut spending across the board
†¢ 27 percent said cut spending from all government budgets except the military
†¢ 10 percent said pass a balanced budget amendment
†¢ 3 percent said cut taxes
†¢ 3 percent said fix Social Security and Medicare so they don’t pay out more than they take in
That was pretty revealing. Social Security and Medicare will drive our long-term structural deficits and crush our economy along the way. But even though the issue is getting some play in the media, it doesn’t seem to be getting through to the grassroots.
There is more at the link. You might think that the desire for across the board spending cuts is picking up the fiscal conservatism, but the follow-up questions don't show a great desire to limit Social Security or Medicare. Only thirty-five percent of the recipients favor both raising the retirement age for benefits and also means-testing.
You may recall that fiscal conservative Paul Ryan didn't mention Social Security or Medicare in his response to Obama's State of the Union address.
Addendum: Here is a related poll.
*The Limits of Market Efficiency*
There is a new paper by James M. Buchanan, here is the abstract:
The framework rules within which either market or political activity takes place must be classified in the non-partitionability set under the Samuelson taxonomy. Therefore there is nothing comparable to the profit-loss dynamic of the market that will insure any continuing thrust toward more desirable rules. ‘Public choice’ has at least partially succeeded in getting economists to remove the romantic blinders toward politics and politicians as providers of non-partitionable goods. It is equally necessary to be hard-nosed in evaluating markets as providers of non-partitionable rules.
Hat tip goes to www.bookforum.com.
The Nordic triangle?
Via Conor Friedersdorf, and Bagehot, here is a discussion of Henrik Berggren and Lars TrägÃ¥rdh:
Conor writes:
Here's an interesting frame for the difference between America, Germany, and Sweden: every society has a different relationship to "the triangle formed by reverence for the Family, the State and the Individual."
Bagehot writes:
Americans favour a Family-Individual axis… suspecting the state as a threat to liberty. Germans revere an axis connecting the family and the state, with a smaller role for individual autonomy. In the Nordic countries… the state and the individual form the dominant alliance.
Here is Reihan on this topic. Here is my earlier and very directly related post on Sweden and the Swede as individualist. Does anyone have a link to the Pippi Longstocking paper itself?
Here is Bagehot again:
(Before you scoff, you should perhaps know that the French–a conservative and statist lot–have a very complicated relationship with Pippi Longstocking as a children's book. For many years, the only French translation available was a bowdlerised version, that played down Pippi's wilder, anti-authoritarian side. There is a moral in there somewhere.)