Category: Political Science

Why the Chets Get on Top

A correspondent writes to Brad DeLong, Why do the Chets of the world get on top?  You know the type, she writes,

Chet is a hail-fellow-well-met sort, cracking jokes all the time… Chet is tall, probably tan, and has big white teeth like a mouthful
of chiclets…. Chet is a member of country clubs, and has a thin wife, and two
adorable kids…Chet has an incredibly high opinion of himself. He is confident to
the point of arrogance, but friendly, outgoing. There is one thing Chet is not,
ever, in my experience, and that is particularly bright.

I like Brad’s answer:

… there are four relevant human capabilities here: the ability to master
details, the ability to quickly grasp what the salient issues are and follow
them through to their conclusion, the ability to work like a dog, and the
ability to size up people–figure out quickly who will actually produce
something useful and who will not, who will hang tough and who will easily bid
more, who will soften if wooed and who will stay hard-nosed. Next to nobody has
all four or even three of these capabilities in world-class measure. Fewer
people than you think have even two. And for someone who has one of the other
three–mastery of detail or skill at analysis or the ability to work like a dog
for ungodly periods of time–mastery of Chet-hood is a very valuable and
lucrative skill.

The correspondent is asking about investment bankers but the discussion applies equally well if not better to politicians.

Pushing the model a bit further I suggest that detail mastery, analytical thinking and working like a dog are more open to meritocracy than sizing people up because to size people up it helps to get them to like you and that is more culturally bound than the other skills.   Minorities may rise to the top more quickly in fields that emphasize the first sets of skills than in those that emphasize the latter.  Birth in general, connections etc. are also more important for the latter set of skills.  Thus in America, it’s Chet not Vijay even though Indian Chets surely exist in just as high a proportion as WASP Chets. 

What do the Iraqi insurgents want?

Rather than employing the classic rebel tactic of provoking the foreign
forces to use clumsy and excessive force and kill civilians, [the Iraqi rebels] are
cutting out the middleman and killing civilians indiscriminately
themselves, in addition to more predictable targets like officials of
the new government. Bombings have escalated in the last two weeks, and
on Thursday a bomb went off in heavy traffic in Baghdad, killing 21

More generally, the insurgency does not appear to have put forward any program or unifying vision; read more here

I have no particular expertise on the empirics, but from a game-theoretic point of view I can think of seven possible "strategies" at work:

1. Chaos is seen as a path to a new Sunni dictatorship.

2. The goal is not to impose a particular solution on Iraq, but rather to punish the U.S. for intervening, by making matters look bad. 

3. The attacks are fundraising events, just as one might hold a cocktail party for donors.  They help the rebels attain focality and make the headlines; the attacks are not domestic political tactics per se

4. Deliberate amorphousness is the best strategy against a determined and powerful United States.  U.S. public opinion must not be able to identify a discernible enemy.  Perhaps the U.S. is most likely to quit Iraq if we view the Iraqis as "crazy," or "not deserving of freedom."  We are less likely to stop thinking about a visible opponent, such as bin Laden.

5. Unlike Bob Lucas’s modeled rational expectations agents, Iraqi insurgents do not hold the "true economic model" in their heads.  Young men at war are notoriously overconfident.  Just as some al Qaeda members thought the U.S. was a weaker opponent than the Soviet Union, the Iraqi insurgency has some similarly crazy view of the world.  What we perceive as failure simply does not deter them much.

6. The insurgency is smaller than we think.  The violent actions we observe are the "noise" of a minority within a minority.  There is no rational explanation, but we had underestimated how much havoc a small group can wreak.

7. The insurgents are simply mad (how’s that for high-powered game theory?), read Jane Galt.

Unfortunately, all of these are possible, and in various combinations.  Nor do they point to any common direction in terms of policy recommendations for a response.

Will France ratify the EU Constitution?

Right now the betting market says the chance is a bit more than forty percent.  The site, with regular updates, is here.  Here is Lynne Kiesling on whether France should ratify. 

My take: The Constitution violates many of my political ideals, if only by further cementing a non-accountable Brussels bureaucracy.  Nonetheless the EU is a godsend for Eastern Europe, if only by making democracy permanent there.  We cannot take that for granted, mostly because Russia has not yet achieved political equilibrium.  The benefits for Eastern Europe dwarf any impact on the in-any-case sluggish Western Europe, so let’s root for a smooth constitutional process.  The EU will have plenty of time to fall apart later on.

Addendum: Here is a better (more permanent) link, thanks to Chris Massey for the tip.

Bonuses for good governance in Madagascar

Mr. Ravalomanana became president [of Madagascar] and quickly became a favorite for his businesslike style [TC: he was earlier a dairy tycoon].  The president grades his cabinet members, granting the best ministers bonuses far greater than their measly government pay and firing the worst.  The economy, which shrank 13% during the turmoil in 2002, has begun to recover although inflation has been a worry recently (WSJ, 18 April, p.A6).

I doubt if this kind of bonus scheme can work more generally, although it remains an interesting question why not.  I suspect that it requires an honest and disciplined president, combined with questionable cabinet members who otherwise will not do the right thing.  How often do you see that exact combination? 

Over time I expect the payments to shift to cabinet members who support the president.  Even a benevolent leader will see reason to make the payments in this fashion, but I fear the move toward outright corruption.   A private business, in contrast, gains more simply by having subordinates march in tune with the CEO.  But we have never worked through all the relevant differences in the two cases.  Surely some MR readers would like to see a bonus for Timothy Muris (former FTC head) and a fine imposed on…well…take your pick.

By the way, Madagascar is now the number one poster child for Bush’s Millennium Challenge Account.  I know they have wonderful and highly underrated music, but didn’t they have a civil war just a few years ago?  I am not yet ready to be bullish on this one.

Rich Man, Poor Man; Rich State, Poor State

Statistical Modeling, Causal Inference, and Social Science is one of my favorite new blogs.  It is primarily written by Andrew Gelman, a professor in the Departments of Statistics and Political Science at Columbia University.

A recent post looks at the difference between red and blue states and red and blue individuals.  We all know that in the recent election poorer states tended to vote Republican while richer states tended to vote Democrat.  On the basis of the famous maps many people jumped to the conclusion that poorer individuals were voting Republican (Nascar Republicans) while richer individuals were voting Democrat (trust fund Democrats).  But the inference is a fallacy, the ecological fallacy.  In fact, high-income individuals, as opposed to high-income states, vote Republican with greater likelihood than low-income individuals (the effect is not huge and it may be declining but it is significant).   

It’s even true that rich counties tend to vote Republican with greater likelihood than poorer counties.  Gelman links to this graph which nicely illustrates the ecological fallacy.  The three lines show that within each state higher-income counties are more likely to vote Republican but when you look between states the correlation between income and voting Republican is negative.  (Click to enlarge).




Claims my Russian wife laughs at (a continuing series)

Start with the idea that the United States can no longer really be regarded as a "new nation."  There is no doubt that America is singularly lacking in ancient chateaux and schlossen…But this scarcely constitutes evidence of youth.  The first settlers arrived when James I was on the throne and England was not yet Britain.  Galileo was offered a chair at Harvard University, which was founded in 1636, before Charles I had his head cut off.  The Declaration of Independence was signed a century before the unification of both German and Italy…Many of the traditions which define Britain as an old country in the minds of admiring Americans — the pomp and circumstance of empire, the rituals of Charles Dickens’s Christmas, Sherlock Holmes’s deer-stalker hat – were invented a century after the American constitution.  "The youth of America is their oldest tradition," Oscar Wilde quipped more than a century ago.

At least I think it is true.  That is from The Right Nation: Conservative Power in America, by John Micklethwait and Adrian Wooldridge.  This book is the best introduction to the history of the so-called "American Right."  It is a worthy successor to George Nash’s earlier tome.

Electing a Pope

After the Athenians, Catholic scholars were among the first to analyze problems of voting (what is today called social choice theory).  The potential for chaotic elections was certainly familar to the Cardinals who after many disputes over who should be Pope settled on the current two-thirds rule for election in 1179.  And while I wouldn’t go so far as  Pope Pius II  who in 1458 said (after his own election (of course!) "What is done by two thirds of the sacred college, that is surely of the Holy Ghost, which may not be resisted," it is interesting to note that 2/3rds does have a number of special stability properties (see the difficult paper of Saari here and the earlier link).

For more on the history and practice of Papal elections you can listen to two free historical lectures from The Teaching Company.   

Why did so many Germans support Hitler?

A well-respected German historian has a radical new theory to explain a nagging question: Why did average Germans so heartily support the Nazis and Third Reich? Hitler, says Goetz Aly, was a "feel good dictator," a leader who not only made Germans feel important, but also made sure they were well cared-for by the state.

To do so, he gave them huge tax breaks and introduced social benefits that even today anchor the society. He also ensured that even in the last days of the war not a single German went hungry. Despite near-constant warfare, never once during his 12 years in power did Hitler raise taxes for working class people. He also — in great contrast to World War I — particularly pampered soldiers and their families, offering them more than double the salaries and benefits that American and British families received. As such, most Germans saw Nazism as a "warm-hearted" protector, says Aly, author of the new book "Hitler’s People’s State: Robbery, Racial War and National Socialism" [TC: I cannot find it on U.S. Amazon, try this German link] and currently a guest lecturer at the University of Frankfurt. They were only too happy to overlook the Third Reich’s unsavory, murderous side.

Financing such home front "happiness" was not simple and Hitler essentially achieved it by robbing and murdering others, Aly claims. Jews. Slave laborers. Conquered lands. All offered tremendous opportunities for plunder, and the Nazis exploited it fully, he says.

Read more here.  I am a believer in studying the extremes.  Hitler’s Germany (extreme oppression and persecution), modern Haiti (a complete mess), and Yugoslavia in the 1990s (relapse from tolerance into murder) have a special hold on my attention in this regard. 

And might you think that the German soldiers always followed orders?  How about this:

In Auschwitz…there is not one case in the records of an SS man being prosecuted for refusing to take part in the killings, while there is plenty of material showing that the real discipline problem in the camp — from the point of view of the SS leadership — was theft [from arriving Jews and others].  The ordinary members of the SS thus appear to have agreed with the Nazi leadership that it was right to kill the Jews, but disagreed with Himmler’s policy of not letting them individually profit from the crime.  And the penalties for an SS man caught stealing could be draconian — almost certainly worse than for simply refusing to take an active part in the killing.

That is from the new and noteworthy Auschwitz: A New History, by Laurence Rees.

The evolution of protectionism

To get the industrial Midwest with its 140,000 steel workers to vote Republican in congressional elections, President Bush slapped a prohibitive tariff on imports of steel from Europe and Japan in 2001. He got what he wanted: a (bare) Republican majority in the Congress. But while the large steel users (such as automobile makers, railroads and building contractors) were forced by the tariff to buy domestic, they immediately set about cutting their use of steel so as not to spend more on it than they would have had to spend had they been able to buy the imports. Bush’s tariff action thus only accelerated the long-term decline of the traditional midwestern steel producers and the jobs they generate. Tariffs, in other words, can still force users to buy domestic, but they are no longer capable of protecting the domestic producers’ prices. Those are set through information and on the world-market level.

This development underlies the steady shift in protectionism: from tariffs–the traditional way–to protection through rules, regulations and especially export subsidies. World trade has grown spectacularly in the last fifty years. The largest growth has been in subsidized farm exports from the developed world: western and central Europe, Australia, Canada and the United States. Farm subsidies are now the only net income of French farmers, as their crops produce nothing but net losses and are grown only as the entitlement for the subsidies. These subsidies are in fact a major–perhaps the major–cement of the Franco-German alliance [TC: touche’, und Autsch!], and with it, of the European Union.

That is Peter Drucker, read more here.

Will a wealthier China democratize?

Maybe not.  Daron Acemoglu, Simon Johnson, Pierre Robinson, and Pierre Yared report:

We revisit one of the central empirical findings of the political economy literature that higher income per capita causes democracy. Existing studies establish a strong cross-country correlation between income and democracy, but do not typically control for factors that simultaneously affect both variables. We show that controlling for such factors by including country fixed effects removes the statistical association between income per capita and various measures of democracy. We also present instrumental-variables using two different strategies. These estimates also show no causal effect of income on democracy. Furthermore, we reconcile the positive cross-country correlation between income and democracy with the absence of a causal effect of income on democracy by showing that the long-run evolution of income and democracy is related to historical factors. Consistent with this, the positive correlation between income and democracy disappears, even without fixed effects, when we control for the historical determinants of economic and political development in a sample of former European colonies.

Here is the full paper for $5.  Here is a version for free.

Is blackmail coercive?

On some level, I do believe blackmail is a kind of coercion, but I fear my structuralist explanations for this view would be deeply upsetting to the average libertarian Joe, so I will keep my dirty little Foucault-inspired secrets to myself.

Here is more from Alina Stefanescu.

And how about the economics of blackmail?  If blackmail victims are bad guys, why not allow a horde of potential bounty hunters to profit from uncovering their wrongdoing?  We can keep "false blackmail" illegal, while allowing blackmail based on truth, no?  We likely underinvest in the gathering of such information, and the profit incentives of blackmail would help correct (and overshoot?) this institutional failure.

Yet I remain convinced there is, somewhere, a sound economic and utilitarian case against blackmail.  But what is that case?

My favorite exotic explanation (it is not quite sound) is that legal blackmail would lead to inefficient blackmail.  Perhaps the ones who should blackmail you are your family and close friends.  That is when transaction costs are low and both parties strike a good deal, often based on an implicit rather than explicit blackmail.  ("If you run off with that floozy…")  The wrongdoer pays a penalty, and the would-be wrongdoer remains deterred.  Nothing gets too messy.  But if you open up this business to outsiders, well…trust breaks down.  Blackmailers fabricate stories, they send weird threatening letters, and they cause extreme anxiety.  Outsiders don’t even know when they should believe the word of a blackmailer, which limits blackmail possibilities from those in the know.  Under this hypothesis, we keep blackmail illegal to keep blackmailers we can trust.

Addendum: I have turned on the comments function, in case you have good ideas on this topic.

Do people have cultural rights?

Culture talk is not so very far from the race talk that it would supplant in liberal discourse…

No, that is not Larry Summers.  Kwame Anthony Appiah, a Princeton professor, argues that culture is too often used as a not totally legitimate means of separating in-groups from out-groups.  In his view we should sooner reform cultural identities — encourage more tolerance and polyglot interests — than respect current cultures and cultural views as a matter of legal or moral right.

That is from his new The Ethics of Identity, highly recommended.

Here is an interview with Appiah.  This is one good bit:

Look, farming as a way of life is dying in the United States, but it’s not dying because people are shooting the children of farmers, or abusing them, or denying them food or loans or anything–in fact, we massively subsidize them. It’s just that people don’t want to be farmers. Do I think that it would be a great tragedy if the form of life of a Midwestern farmer disappeared? Well, I don’t want to sound un-American, but no, I don’t.

And the guy isn’t even an economist.

The culture of spending

The political scientist James Payne argued that there is a culture of spending in Congress.  Even people elected on a platform of cutting government become enured to higher spending as week after week they hear witnesses saying how much more money is needed and how many more problems could be solved if only you, the great Congressperson, would use your power to spend.

    Here is a great illustrative graphic (click to expand) from The New York Times.  It shows proposed spending in 1995-96 and 2004-05 from the 30 of the 75 freshmen Republicans elected to the House in the Gingrich revolution of 1994 who remain in the house.  Almost all proposed big spending cuts in 1995 but today only 1 (Sue Myrick of NC) continues to propose big cuts.  (Yeah Sue!).  Almost all of the rest are now big spenders.

    It’s somewhat unclear whether Payne’s hypothesis of a culture of spending explains the pattern.  It could be that more senior members spend more and thus as the freshmen gain power they increase their spending (thus term limits, for example, would not solve this problem).  It could also be a selection effect, perhaps only those who become big spenders are reelected.  I tend to favor the latter explanation.  We get the government we deserve, unfortunately.