Category: Political Science

Steve Teles on kludgeocracy

by  Tyler Cowen in

This is a very interesting essay, here is one bit:

While liberals are harmed by the opacity of kludgeocracy’s successes, conservatives are hurt by the lack of traceability of its failures. The fact that so much of our welfare state is jointly administered — either inter-governmentally or through contracting with private agents — makes it hard for Americans to attribute responsibility when things go wrong, thus leading blame to be spread over government in general, rather than affixed precisely, where such blame could do some good. The consequence of complexity, then, is diffuse cynicism, which is the opposite of the habit needed for good democratic citizenship.

And this:

The last thirty years of American history have witnessed, at least rhetorically, a battle over the size of government.1 Yet that is not what the history books will say the next thirty years of American politics were about. With the frontiers of the state roughly fixed, the issues that will dominate American politics going forward will concern the complexity of government, rather than its sheer size.

There are many interesting points in this piece (pdf), with some comments from Reihan.

Sentences to ponder

by  Tyler Cowen in

Is it better to raise rates or cut loopholes?  Maybe conservatives should be preferring the boost in rates.  From Kevin Drum:

…which is simpler and easier, raising rates or closing loopholes? I’d say raising rates is easier, and if it’s done now it will make it harder to raise them again in the future. This means that if Democrats want to soak the rich again, they’ll have to do it via closing loopholes, which is a harder lift.

Second, there’s Coburn’s point. If you want to have any chance at all of broadening the base and lowering rates in the future, you can’t close loopholes now. You need to leave them there as bargaining chips. Tax reform will be more likely if rates are higher (making them easier to lower) and loopholes are all still intact (giving you plenty of stuff to close in return for lowering rates).

The Monster of Monticello?

by  Tyler Cowen in

Here is a good NYT Op-Ed on Thomas Jefferson.  In one of his periodic falls into exaggeration, Bruce Bartlett (whom I admire and often agree with), tweets: “I have yet to meet anyone on the right willing to deal honestly with Jefferson’s slave ownership.”  I have met large numbers of such people and they show up at virtually any Liberty Fund conference, for a start.  In fact that is one reason why they call it Liberty Fund.

I would add this: I am grateful for Jefferson’s contributions to this country in the form of the Declaration and also the Louisiana Purchase, to cite the two biggest.  But as a thinker I find him decidedly mediocre, other than that the Declaration is truly stirring in parts and of course of major historical importance.  (That said, I don’t think it was obvious ex ante that independence was a good idea, so even there Jefferson may be open to criticism.)  Reading the rest is a chore and for me there is little or nothing of analytic interest, unlike with say Madison or John Adams.  I don’t mean to detract from his peaks, but his overall record has lots of negatives, in addition of course to owning slaves and often treating them badly.  His record in practice on civil liberties for white people also left a lot to be desired.  I am not a fan of the agrarianism and arguably that could be labeled less politely.

Here is my previous post on Thomas Jefferson.  I have never liked him.

Addendum: For an alternative perspective, you can try this post and paper by David Post.

The course of Congressional polarization

by  Tyler Cowen in

It is not just a story of conservative Republicans replacing moderates – though that has been the chief driver of America’s polarisation. Democrats are also becoming more liberal. The once powerful centrist Democratic Blue Dog coalition has nosedived from 54 members as recently 2008 to just 15 next year. The term moderate Democrat is becoming almost as rare as its counterpart. Nor is the divergence confined to ideology. The parties also look different. According to Bloomberg, the share of white male Democrats in the 113th Congress is 47 per cent – it fell below half for the first time. Meanwhile, 90 per cent of GOP lawmakers are white male.

That is from Edward Luce.

Is the eurozone doomed?

by  Tyler Cowen in

That is the topic of my latest New York Times column, and I will start off  by stating the case for optimism (if that is the right word):

On the bright side, the fact that markets haven’t ended the European mess by themselves — say, through a truly huge capital flight from the more troubled countries — suggests that a solution does exist in principle, and may even take hold. That isn’t much to cheer about, but, under the circumstances, even simple survival is positive news. One specific bright spot is that both Spain and Greece have been making some wage adjustments to restore longer-term competitiveness.

I grant there has not been comparable progress in reducing suffering.  And here is the case for pessimism:

Imagine a situation where the sounder countries need to put up more money, or the troubled countries need to make bigger financial adjustments, or — most likely — both. Yet power vacuums on each side, or voter rebellions against cross-national agreements, could stop these responses from being applied in a timely way. Political paralysis could then become the harbinger of disaster.

The mess won’t be resolved until the various governments raise their hands and announce transparently just how much of the mess they will pay for — and how. Such announcements will then need to be validated by elections. That means sending a consistent message to other countries and to their own domestic electorates and interest groups. Until then, the game of chicken will continue, and the risks of financial catastrophe will remain high.

Overall I still do not think the current arrangement will work out.  On the positive side, the political commitment in Greece has turned out to be stronger than I had thought, with the comparable judgment for Spain and Italy remaining up in the air.  On the negative side, the broader eurozone recession has halted what was significant progress in Spanish exports.

Finally, I don’t think we will know “the answer” anytime soon:

…the euro zone’s mess could last for a long time, with neither solution nor dissolution.

When matters appear to improve, or when the troubled countries receive more aid, there is more slack in the system. The troubled countries respond by behaving less responsibly and, as a result, move the financial situation closer to the precipice again. For instance, when the European Central Bank announced its debt monetization plans, Spain’s government suddenly faced lower borrowing rates and then refused to apply for a politically costly bailout and austerity package.

When matters become worse, the fiscally healthier countries pony up more aid, as we have seen them do repeatedly for Greece.

It is thus a mistake to overreact to most of the headline events about the euro zone crisis. The good news is never quite as good as it looks, and the bad news often brings beneficial responses. It seems that for dozens of months now, we’ve been hearing that the fate of the euro zone will be decided “shortly,” yet somehow the drama continues.

In normative terms, I see debt forgiveness as essential to moving forward in Europe.

Ideology, Motivated Reasoning, and Cognitive Reflection: An Experimental Study

by  Tyler Cowen in

That is a new paper by Dan M. Kahan, at Yale Law School, and it has to do with what I call “mood affiliation”:

Social psychologists have identified various plausible sources of ideological polarization over climate change, gun violence, national security, and like societal risks. This paper reports a study of three of them: the predominance of heuristic-driven information processing by members of the public; ideologically motivated cognition; and personality-trait correlates of political conservativism. The results of the study suggest reason to doubt two common surmises about how these dynamics interact. First, the study presents both observational and experimental data inconsistent with the hypothesis that political conservatism is distinctively associated with closed-mindedness: conservatives did no better or worse than liberals on an objective measure of cognitive reflection; and more importantly, both demonstrated the same unconscious tendency to fit assessments of empirical evidence to their ideological predispositions. Second, the study suggests that this form of bias is not a consequence of overreliance on heuristic or intuitive forms of reasoning; on the contrary, subjects who scored highest in cognitive reflection were the most likely to display ideologically motivated cognition. These findings corroborated the hypotheses of a third theory, which identifies motivated cognition as a form of information processing that rationally promotes individuals’ interests in forming and maintaining beliefs that signify their loyalty to important affinity groups. The paper discusses the normative significance of these findings, including the need to develop science communication strategies that shield policy-relevant facts from the influences that turn them into divisive symbols of identity.

To put that in Cowenspeak, both sides are guilty, the smart are guiltiest of them all, and the desire for group loyalty is partially at fault.  Is it possible you have seen these propensities in the economics blogosphere?

Here is a related blog post by Kahan, here is another on how independents do somewhat better than you might think, here is Kahan’s blog.

I would stress the distinction between epistemic process and being more right about the issues at a given point in time.  Even if various groups of individuals are epistemically similar in terms of how they process information, at some point in time some groups still will be more right than others, just as some sports fans, every now and then, are indeed backing the winning teams.  It’s less a sign of virtue than you might think.

For the pointer I thank Jonas Kathage.

Attention Scarcity, Ego Depletion and Poverty

by  Alex Tabarrok in

Poor people often do things that are against their long-term interests such as playing the lottery, borrowing too much and saving too little. Shah, Mullainathan and Sahfir have a new theory to explain some of these puzzles. SMS argue that immediate problems draw people’s attention and as people use cognitive resources to solve these problems they have fewer resources left over to solve or even notice other problems. In essence, it’s easier for the rich than the poor to follow the Eisenhower rule–“Don’t let the urgent overcome the important”–because the poor face many more urgent tasks. My car needed a brake job the other day – despite this being a relatively large expense I was able to cover it without a second’s thought. Compared to a poorer person I benefited from my wealth twice, once by being able to cover the expense and again by not having to devote cognitive resources to solving the problem.

SMS test the theory with small experiments in which people are asked to play simple games. Poverty is simulated by giving some players fewer game resources. Players in the “poverty” conditions are then shown to devote more attention to the current round and less attention to future rounds, including borrowing more from future rounds. In perhaps the most surprising experiment, SMS have players play a family feud game with and without hints:

Experiment 5 offers more direct support for
the notion that scarcity creates attentional neglect.
One hundred thirty-seven participants played
Family Feud. Some participants could see previews
of the subsequent round’s question at the
bottom of the screen; others could not. We expected
that poor participants would be too focused
on the demands of the current round to
consider what comes next, whereas rich participants
would be able to consider future rounds
and whether moving on was beneficial. All participants
could borrow with R = 3. As predicted,
poor participants performed similarly with previews
(–0.02 T 0.87) and without (0.02 T 1.11),
while rich participants performed better with previews
(0.32 T 0.98) than without (–0.35 T 0.92)
[scarcity × borrowing interaction, F(1, 133) =
4.29, P < 0.05, hp
2 = 0.03; for unstandardized
scores, see table S5].

One concern might be that
the poor did not have enough time to consider
the previews. But the experiments above found
that the poor were using too much; they were
overborrowing. Their performance in the nopreview
condition left substantial room for improvement.
Even if poor participants had used
some of the borrowed time to consider the previews
and move on sooner, they could have improved.
That is, the previews benefited the rich
by helping them save more; they could have benefited
the poor by helping them borrow less. But
it appears they were too focused on the current
round to benefit.

Thus, SMS show that poverty (over)-stimulates attention to urgent problems which results in less attention given to important problems–thus, reduce some day to day urgencies and people may become more open to devoting attention to important problems like deworming or hygiene or paying the rent which would in the not-so-long-run result in greater benefits.

Crucially, notice that SMS’s experiments are about the effect of poverty not about the poor. In other words, at least some of our discussion of the poor may suffer from the fundamental attribution error.

Harsh words from Scott Sumner

by  Tyler Cowen in

And how about the…GOP decision not to negotiate seriously in 2011, figuring they could get a better result after the election that Karl Rove and Dick Morris assured them they would win?  How’s that decision looking right now?

In the spirit of Arnold Kling, I took out the two harsh words, but the link to Scott’s post is here.  Many people — dare I say exclusively from “the Right” — gave me a hard time over my “now we should cut a fiscal deal” stance in 2011, but I fully expect that today’s deal will be worse.

Here are some interesting remarks from Greg Mankiw.  And here Bruce Bartlett tells his story.

Sentences to ponder

by  Tyler Cowen in

Stunningly, the postponement of marriage and parenting — the factors that shrink the birth rate — is the very best predictor of a person’s politics in the United States, over even income and education levels, a Belgian demographer named Ron Lesthaeghe has discovered. Larger family size in America correlates to early marriage and childbirth, lower women’s employment, and opposition to gay rights — all social factors that lead voters to see red.

That is Lauren Sandler.  Here is more, hat tip to Steve Sailer (and David Brooks).  And as Robin Hanson would say, “politics isn’t about policy.”

David Brooks on the conservative future

by  Tyler Cowen in

It is an excellent column and here is one good bit:

Soft Libertarians. Some of the most influential bloggers on the right, like Tyler Cowen, Alex Tabarrok and Megan McArdle, start from broadly libertarian premises but do not apply them in a doctrinaire way.

Many of these market-oriented writers emphasize that being pro-market is not the same as being pro-business. Luigi Zingales of the University of Chicago published an influential book, “A Capitalism for the People,” that took aim at crony capitalism. Tim Carney of The Washington Examiner does muckraking reporting on corporate-federal collusion. Rising star Derek Khanna wrote a heralded paper on intellectual property rights for the House Republican Study Committee that was withdrawn by higher-ups in the party, presumably because it differed from the usual lobbyist-driven position.

There are additional shout outs to many other writers I admire (and like).  And this:

Most important, they matured intellectually within a far-reaching Web-based conversation. In contrast to many members of the conservative political-entertainment complex, they are data-driven, empirical and low-key in tone.

But do read the whole thing.

Addendum: Paul Krugman comments.

Does corruption harm economic growth?

by  Tyler Cowen in

Chris Blattman says maybe not.  Excerpt:

The reasons that corruption should hurt growth are so persuasive that economists have been pretty surprised not to find much evidence.  One team reviewed 41 different cross-country studies of corruption and development. Two-thirds of the studies don’t even find a negative correlation. Cross-country studies have mostly bad data and empirics, so we should not rest here. But Jacob Svensson has a nice overview of the broader evidence and draws the same conclusion: there’s not much to show that corruption reduces growth on net.

I worry more about corruption than those remarks would indicate, though I agree with Chris that the issue isn’t nearly as important as stopping a civil war.

First, I see a strong correlation between high levels of per capita income and low corruption.  (I don’t worry about the lack of correlation with growth rates because, for one thing, poor countries, even many corrupt ones, may grow more rapidly for reasons related to the Solow model.)  The causality here is hard to sort out, but there is plenty of micro evidence that corruption harms prosperity; it’s not just an aesthetic taste of wealthy people to limit corruption, the way they might buy nice interior drapes.

Furthermore, the correct corruption/poverty model may have multiple equilibria, depending on expectations.  In that setting, making your country “look clean” may improve outcomes by shifting the economy up to better equilibria, even if lower corruption isn’t a direct cause of greater prosperity.  There is worse advice than “Act like a rich country, and in the meantime you may become one,” at least provided you do not take this as liberty to spend above your means or to slack off with the work hours.

Second, even high levels of wealth will in some regards bring more corruption, especially as a country moves out of “fourth world” status or other forms of extreme poverty.  Corruption very often rises with complexity and so along some margins it is correlated with wealth levels too.  Similarly, we find that economic growth tends to bring more sexual harassment in the workplace, if only because more women are working outside the home.  Yet it is still correct to think of the harassment as a very real negative, as is corruption.

In any case, this week’s new videos are up at MRU and they cover the topic of corruption, go over and take a look.  Here is one video on the causal question about corruption and growth.  Here is our video on the causes and predictors of corruption, historically speaking.  Here is our video on how corruption can trap economies.

The political culture that is Uruguay

by  Tyler Cowen in

Laundry is strung outside the house. The water comes from a well in a yard, overgrown with weeds. Only two police officers and Manuela, a three-legged dog, keep watch outside.

This is the residence of the president of Uruguay, Jose Mujica, whose lifestyle clearly differs sharply from that of most other world leaders.

President Mujica has shunned the luxurious house that the Uruguayan state provides for its leaders and opted to stay at his wife’s farmhouse, off a dirt road outside the capital, Montevideo.

The president and his wife work the land themselves, growing flowers.

This austere lifestyle – and the fact that Mujica donates about 90% of his monthly salary, equivalent to $12,000 (£7,500), to charity – has led him to be labelled the poorest president in the world.

…His charitable donations – which benefit poor people and small entrepreneurs – mean his salary is roughly in line with the average Uruguayan income of $775 (£485) a month.

In 2010, his annual personal wealth declaration – mandatory for officials in Uruguay – was $1,800 (£1,100), the value of his 1987 Volkswagen Beetle.

The article is here, and for the pointer I thank Adam Dayan.