Category: Political Science
Civil war exposure and violence
That's a new paper by Edward Miguel, Sebastian Saiegh, and Shanker Satyanath and here is the abstract:
In recent years scholars have begun to focus on the consequences of individuals’ exposure to civil war, including its severe health and psychological consequences. Our innovation is to move beyond the survey methodology that is widespread in this literature to analyze the actual behavior of individuals with varying degrees of exposure to civil war in a common institutional setting. We exploit the presence of thousands of international soccer (football) players with different exposures to civil conflict in the European professional leagues, and find a strong relationship between the extent of civil conflict in a player’s home country and his propensity to behave violently on the soccer field, as measured by yellow and red cards. This link is robust to region fixed effects, country characteristics (e.g., rule of law, per capita income), player characteristics (e.g., age, field position, quality), outliers, and team fixed effects. Reinforcing our claim that we isolate the effect of civil war exposure rather than simple rule-breaking or something else entirely, there is no meaningful correlation between our measure of exposure to civil war and soccer performance measures not closely related to violent conduct. The result is also robust to controlling for civil wars before a player’s birth, suggesting that it is not driven by factors from the distant historical past.
One question is whether such behavior occurs because the player's psyche has somehow been brutalized or whether it is a deliberate affect aimed at a violence-expecting audience back home. It's related to which variables might best predict the propensity of an NBA player to pick up technical fouls; would that be correlated with urban upbringing, the nature of the audience (home vs. away, TV vs. live crowd, etc.) or perhaps correlated with early brushes with the law?
If you wish to skim the results, start with p.25. The Colombian players pick up a lot of yellow cards.
*The End of Influence*
The subtitle is What Happens When Other Countries Have the Money and the authors are Stephen S. Cohen and Brad DeLong. Here is an excerpt:
The Asian export-led growth model must — over time — transform itself to domestic consumption and prosperity models. The American borrow-and-import model will also have to shift — again, this takes considerable time — to a model of consumption-at-the-level-you-produce. And the need to keep the confidence of those who have the money that their money is well placed in the United States serves as a constraint on U.S. policy in a way that it has never been before.
In the last three paragraphs of the book the authors describe the various stimulus attempts as something that will "buy time," but will not be sufficient to alter this basic trajectory.
Cato dialog on Tom Palmer’s new book
Here is a YouTube of Tom Palmer presenting his new book, with yours truly commenting, at the Cato Institute. David Boaz summarizes part of my comment. Here is my previous post on Tom's new book and the book, Realizing Liberty, is available for purchase on-line, Tom points us to this podcast of him criticizing me; his comment reflects some of the differences in our points of view.
One question in the dialog was to what extent an adherence to liberty — at the level of an entire polity — is likely to be culturally specific. I see pro-liberty ideas as more likely to be Anglo-American than Tom does or at least more northwestern European. It is for this reason, I think, that he favors free immigration whereas I, although very pro-immigration relative to the political debate, favor legal limits in many cases, including the United States, Switzerland, and Iceland.
A second question is to what extent ideas about liberty can be supported without encouraging "the paranoid style" in American politics. Too often advocacy of individual liberty ends up bundled with the paranoid style of reasoning and overly simple good vs. evil narratives. I have yet to see a good explanation for why.
Overall I am more suspicious of "ideology" than is Tom. He sees ideology as having driven many very beneficial social movements, such as the abolition of slavery. I accept that point but still fear that ideological reasoning is likely to end up biased away from an emphasis on abstract concepts. That will mean ideology is often useful for ending very concrete social injustices, but that ideology is unlikely to bring people to a deep understanding of "better economics," especially when the distinction between the seen and unseen is important. The strongest ideologies also tend to be nationalistic.
Will Medicare cost reductions stick?
The graph above, which portrays Medicare as a percentage of gdp, is from this SSA piece. In contrast, Matt Yglesias, Kevin Drum, and others have touted a new short essay as evidence for the claim that the Obama health reform plan will succeed on the cost control front, or at least offer a reasonable chance of succeeding, or at least offers some components which will not be reversed. Here is one key paragraph:
Virtually all of the Medicare cuts enacted in 1990 and 1993, which accounted for a significant portion of the savings in those large deficit-reduction packages, were implemented. And most of the savings enacted in 1997 other than the SGR cuts – nearly four-fifths – were implemented as well.
Given that Medicare spending growth slowed significantly more than was anticipated after 1997 – in 1999, for the first time ever, it was actually lower than the previous year’s level – and the budget was balanced in 1998 for the first time in 28 years, it is surprising that Congress did not scale back even more of the savings enacted in 1997. There is little likelihood that the positive budgetary outlook that encouraged some easing of the 1997 cuts will return in coming years.
See also Box 2 in the piece (which starts slowly, so skip ahead to the meat I am citing). If you're wondering about discrepancies between these numbers and the SSA graph, the latter is as a percentage of gdp.
My view is this: the aggregate data show that Medicare expenditures, as a percentage of gdp, have expanded at a healthy clip for every medium-run period you can find since 1973. I don't doubt that the future — like the past — may well show some shorter periods which look better than others but cost control has never worked in the past on anything but a temporary basis. Citing a bunch of short periods of time doesn't convince me; they didn't stick! And only one three-year batch of cost controls showed up, as a success, in the aggregate historical data at all. (Would you believe a worsening alcoholic who pointed to many days or even weeks where his rate of drinking was declining and also mentioned that he drank less for a few years starting in 1993? Or maybe this reminds you ever so slightly of the debates over recent global cooling and short vs. long-term trends? Most progressives recognize that a few years of cooling do not contradict the evidence about the long-term trend and yet here is an odd flip of emphasis on a few short-term improvements.)
In Figure D you'll also see that the savings from the 1993-1996 partially period are offset by later, more rapid increases in Medicare spending as a percentage of gdp.
Three additional points are worth consideration:
1. The period of Medicare cost savings, in the early to mid 1990s, coincides roughly with a more general period of cost savings in health care, due to managed care. This was soundly rejected by the American public, both in their roles as consumers and voters.
2. There will be more and more older voters in the years to come.
3. We should give at least some consideration to a "mean reversion" theory, by which current cost savings increase the pressure for future splurges. I don't want to push this view too hard, but the aggregate data, as I eyeball them, seem to imply "do not reject" for this hypothesis.
On the other side of the ledger, you might argue, pro-Obama, that the very act of passing the legislation represents a countervailing force against this long-run trend of rising costs.
You can still argue for the bill on this basis: "Congress will increase future spending on Medicare as much as it can. Any other expenditures in the meantime serve a "stuff the beast" function and slow down the future rate of growth on Medicare expenditure. We'd rather spend the money on extra coverage now, realizing that the threat of future fiscal crisis will force later Medicare cuts."
That's not my point of view, but it's what I think the debate on cost control boils down to. The best case scenario for the bill is that it won't much help cost control, may not hurt it, but by pre-emption will result in more money spent on coverage and less money spent on old people.
Sentences to ponder
Felix Salmon writes:
Remember too that when you have a progressive tax system, especially when there are surcharges on people making seven-figure incomes, you also have a system where for any given level of national income, the greater the inequality, the greater the government’s tax revenues. And indeed federal revenues have been rising faster than median wages for decades now, thanks to the rich getting ever richer.
Given the government’s insatiable appetite for cash, it’s only natural that it would prefer to tax plutocrats, spending some of that money on poorer Americans, rather than move to a world where poorer Americans earn more (but still don’t pay that much in taxes), and the plutocrats earn less, depriving the national fisc of untold billions in revenue.
The government’s interests, then, are naturally aligned with those of the plutocrats – and when that happens, the chances of change naturally drop to zero.
Whenever there's an MR post categorized under both "economics" and "political science," it's usually pretty brutal.
The future of Africa?
I'm still thinking about this fascinating article from the NYT magazine last week, titled "Is There Such a Thing as Agro-Imperialism?". Here are two excerpts:
…one of the earth’s last large reserves of underused land is the billion-acre Guinea Savannah zone, a crescent-shaped swath that runs east across Africa all the way to Ethiopia, and southward to Congo and Angola.
And:
…as of earlier this year, the Ethiopian government had approved deals totaling around 1.5 million acres, while the country’s investment agency reports that it has approved 815 foreign-financed agricultural projects since 2007, nearly doubling the number registered in the entire previous decade. But that’s far from a complete picture. While the details of a few arrangements have leaked out, like one Saudi consortium’s plans to spend $100 million to grow wheat, barley and rice, many others remain undisclosed, and Addis Ababa has been awash in rumors of Arab moneymen who supposedly rent planes, pick out fertile tracts and cut deals.
Foreign investment can do wonders but the interaction between such investment and corrupt foreign governments can also be negative if workers and citizens are not granted adequate rights. This article caused me to revaluate possible paths for some African futures. The Coase theorem is finally kicking in. I see corrupt politicians deciding it is more profitable, and also more secure, to "sell off" their countries than to oppress them in the traditional manner. I see a new kind of tax farming, based on the extraction and exploitation of resources and raw materials, with African labor along for the ride. It will mean higher living standards and better infrastructure, but probably not along a path that will look very appealing to most Western observers.
*Unchecked and Unbalanced*
This book represents an attempt to explore the problem of the discrepancy between the trends in two phenomena: knowledge is becoming more diffuse, while political power is becoming more concentrated.
That's the first sentence of Arnold Kling's second new book; in another context I might have called it "Words of Wisdom." My blurb on the back was:
This is essential reading on the political dangers facing us today and the risk of excess centralization. Arnold Kling is one of my favorite commentators.
Here Arnold explains his two books.
How worried should we be about the deficit?
There have been many posts on this topic lately, start with Paul Krugman and Brad DeLong if you need to catch up. Today I have a few simple points:
1. Even if "it is fine to borrow more" is the most likely scenario, it is not the only scenario. Let's take a page from Marty Weitzman on climate change. The worst-case scenarios matter too, because they can be very, very bad. We need to think probabilistically about this issue.
2. Are there current intelligent discussions of the implied interest rate volatility embedded in current options prices? If we are looking for market tests, why not start there? Focusing on the point estimate of the market interest rate(s) discourages you from thinking probabilistically.
3. I know less about Belgium but I am not reassured by Krugman's point that "Italy can do it." I and many other observers consider Italy's economy to be a basket case which will only get worse. Nor is Japan in a satisfactory place, economically speaking.
4. Krugman writes: "Belgium is politically weak because of the linguistic divide; Italy is
politically weak because it’s Italy. If these countries can run up
debts of more than 100 percent of GDP without being destroyed by bond
vigilantes, so can we."
I would interpret this evidence differently. A high deficit often is an unfavorable symptom of bad politics, even if you think the high deficit is economically OK on its own terms. It's a sign that you have dysfunctional institutions and decision-making procedures, as indeed they do in Belgium and Italy. I believe that the not-always-swift American voter in fact understands high deficits — correctly — in this light. They don't hold theories about "crowding out," rather they sense something in the house must be rotten. And so they rail against deficits, as do some of their elected representatives. It's a more justified reaction than the pure economics alone can illuminate.
When water regularly overflows from your toilet, you want the toilet fixed, whether or not the water is doing harm.
Monitoring the bureaucracy in Dubai
Sheikh Mohammed oversees a cadre of undercover mystery shoppers…They pose as prickly members of the public seeking the government's help. Their reports are instrumental in firings and promotions. No bureaucrat can be sure the demanding customer across the counter isn't secretly reporting to the boss. Once in a while, Sheikh Mohammed turns up at 7:30 on surprise inspections. He's been known to fire late-arriving managers on the spot.
That is from Jim Krane's fascinating City of Gold: Dubai and the Dream of Capitalism. This is pretty clearly the best book on Dubai. It has an insider's perspective but is also analytical. Recommended
Political vs economic competition, or why a two-party system can be OK
Max Kaehn, an occasional MR commentator, expressed a common sentiment when he wrote:
You think a voting system that sticks us with a two-party cartel instead of a diverse market in political representatives isn’t a major problem? Are you sure you’re an economist?
Here are a few reasons why political competition isn't the same as economic competition:
1. Economic competition lowers costs. For the average worker, it cost a month's wages to buy a book in eighteenth century England and today it might cost well under an hour's wage. The competitive incentive to use and introduce new technologies drove that change. Political competition may support cost-reduction enterprises in an indirect manner, by providing good policy and spurring the private sector, but the mere ability to supply candidates and parties at lower cost is no great gain.
2. Having lots of parties means you get coalition government. This works fine in many countries but again it is not to be confused with economic competition. Coalition government means that say 39 percent of the electorate gets its way on many issues, while 13 percent of the electorate — as represented by the minor partner in the coalition — gets its way on a small number of issues. Whatever benefits that arrangement may have, they do not especially resemble the virtues of economic competition.
3. Many people think that greater inter-party competition, and/or more political parties, will help their favored proposals. Usually they are wrong and they would do better to realize that their ideas simply aren't very popular or persuasive.
4. Often the U.S. system is best understood as a "no-party" system, albeit not at the current moment, not yet at least. The bigger a party gets, often the less disciplined it will be.
5. Stronger electoral competition, in many cases, brings outcomes closer to "the median voter or whatever else is your theory of political equilibrium." That's better than autocracy, but again there are limits on how beneficial that process can be. It's not like economic competition where you get ongoing cost reductions in a manner which saves lives, brings fun, and enriches millions.
The bottom line: Political competition is better than autocracy, but its benefits are not well understood by a comparison with economic competition.
Range voting
A few readers asked me to discuss range voting. Wikipedia defines it as following:
Range voting (also called ratings summation, average voting, cardinal ratings, score voting, 0–99 voting, or the score system or point system) is a voting system for one-seat elections under which voters score each candidate, the scores are added up, and the candidate with the highest score wins. Range voting was used in all public elections in Ancient Sparta in the form of measuring how loud the crowd shouted for different candidates.[1] Approval voting can be considered to be range voting with only 2 levels (approved (1) and disapproved (0)).
The main question to get out of your head is whether or not range voting satisfies Arrow's Impossibility Theorem. (In fact it doesn't, most forms of range voting violate the independence of irrelevant alternatives, but don't worry about that!). There's no major reason why a democratic system should follow all of Arrow's axioms as defined across universal domain, which means you have to rule out the very possibility of paradoxes. Can anyone do that? No, not even when you're deciding which book to read next. (But should you stop reading? No.) We do, however, care if the system can:
1. Deliver decent economic growth and an acceptable level of civil liberties.
2. Build consensus and legitimacy going forward, and
3. Toss out the truly bad politicians.
Ideally, we'd even like:
4. The democratic process itself educates people, raises the level of discourse, and makes for a better society.
On those counts, it is not clear what advantage range voting brings over either a two-party winner-take-all system or some form of proportional representation. Do we really need to count the preference intensity of voters? That could sooner be harmful in extreme situations. Do we really need to teach voters complicated aggregation systems? The relatively well-educated Germans used a "vote twice but ultimately only the party vote counts" form of PR and for decades most of them never understood it and now they are changing it, finally.
Most countries don't use range voting. Ireland and Tasmania have had some experience with the Single Transferable Vote (STV) system. What happens is that a bunch of candidates run for each post, party identification is weak, and reps emphasize constituency service. That's probably the major dominant effect, namely that most systems of range voting weaken political parties.
The bottom line: Range voting is a solution in search of a problem. The main problems with democracy include poorly informed, irrational, and short-term voters and politicians. Range voting doesn't cure any of those and arguably by weakening party affiliation it makes some of them worse.
A public choice theory of the filibuster
Senators like the filibuster. It keeps them relevant when they're in the minority. It makes their chamber a lot more powerful than in the House, and ensures that the leadership has to listen to their concerns more closely.
That's Ezra Klein, here is more.
Whoops!
If you believed all the talk from Chrysler about how our tax dollars would help finance its fast-track electric-vehicle future, you're in for a big disappointment.
Chrysler has disbanded the engineering team that was trying to bring three electric models to market as a rush job, Automotive News reports today. Chrysler cited its devotion to electric vehicles as one of the key reasons why the Obama administration and Congress needed to give it $12.5 billion in bailout money, the News points out.
The link is here and I thank John Nye for the pointer.
China claim of the day
If China remains culturally closed, the Chinese Century will never come to pass. Instead, the United States–a country that has struggled with race and racism for centuries, and in the process has become more culturally open and resilient–will dominate this century as it did the last.
That's from Reihan Salaam, who discusses how far the problem of Asian racism is from being solved.
How to run a successful blog
…They understand that public opinion matters…they understand that it’s a little harder to criticize someone after you’ve met him and he’s given you free cookies…they couldn't possibly have expected to change anybody’s mind, they understand that it’s better to talk to your critics than to avoid them. Waldman talks about some of the techniques used to make the attendees [readers] feel like they were being treated as special guests.
Whoops! That's not advice for running a successful blog. Those are James Kwak's comments on how Treasury tries to trick visiting bloggers. We bloggers should know. We give away lots of free stuff too, more than cookies even if it is sometimes sour rather than sweet.