Category: Political Science
The public choice economics of spending cuts
This issue deserves more attention and I cover it in my latest NYT column:
Most relevant, perhaps, is Canada, which cut federal government spending by about 20 percent from 1992 to 1997. The Liberal Party, headed by Jean Chrétien as prime minister and Paul Martin as finance minister, led most of this shift. Prompted by the financial debacle in Mexico, Canadian leaders had the courage and the foresight to make those spending cuts before a fiscal crisis was upon them. In his book “In the Long Run We’re All Dead: The Canadian Turn to Fiscal Restraint,” Timothy Lewis describes Canada’s move from fiscal irresponsibility to a balanced budget – a history that helps explain why the country has managed the current global recession relatively well.
To be sure, the spending cuts meant fewer government services, most of all for health care, and big cuts in agricultural subsidies. But Canada remained a highly humane society, and American liberals continue to cite it as a beacon of progressive values.
Counterintuitively, the relatively strong Canadian trust in government may have paved the way for government spending cuts, a pattern that also appears in Scandinavia. Citizens were told by their government leadership that such cuts were necessary and, to some extent, they trusted the messenger.
It’s less obvious that the United States can head down the same path, partly because many Americans are so cynical about policy makers. In many ways, this cynicism may be justified, but it is not always helpful, as it lowers trust and impedes useful social bargains.
Forces like the Tea Party movement argue for fiscal conservatism, though it isn’t obvious that they are creating the conditions for success. Over the last year, we have been treated to the spectacle of conservatives defending Medicare against proposed cuts, in large part to curry favor with voters and mobilize sentiment against the Democratic health care plan.
The column also offers up some general reasons for considering spending cuts and not just tax increases. Maybe Arnold Kling won't like this column, but when I look around the globe for episodes of successful spending restraint I see Canada, Finland, Sweden, and now possibly (probably) Ireland, which is in the midst of fiscal restructuring. I see change coming from elites and I see relatively left-wing governments (Ireland, admittedly, is harder to classify) which are trusted by their citizens. The Greek government, in contrast, doesn't operate with the same level of social cohesion and thus it is likely to fail.
I believe the "social trust" scenario for spending cuts is overlooked because it raises the relative status of groups which people who favor spending cuts do not wish to raise.
I wouldn't want to force the view that the United States will or can follow the path of these other nations. But when there is no other evidence, look to the path of what has been shown to be possible. This is a neglected point in the debate on fiscal restructuring and it suggests we are not currently on a propitious path. Right now many fiscal conservatives are looking to voter outrage to drive change and I'm just not sure there is a "there there." Here's one good post on how much conservatives like government spending.
The Timothy Lewis book, by the way, deserves far more attention than it has received. Note that the earlier sections of the book are somewhat boring but it picks up in the later parts.
Addendum: Arnold Kling comments.
Nate Silver wins a lunch date with Vero de Rugy
As it turns out, when controlling for state capitals and a host of other potentially relevant variables, we find that the original findings still hold…Even after taking out the money spent through state capitals, the average Democratic district receives at least 30 percent more than the average Republican district.
That's from Vero, there is more here.
The culture that is Norway
Thousands of travellers are stranded throughout Europe as ash continues to rain down from an erupting volcano in Iceland this week. Among them is Norwegian Prime Minister Jens Stoltenberg, whose press secretary reports the official to be “running the Norwegian government from the United States via his new iPad.”
The story is here and for the link I thank vANNilla. Israel, however, has banned all imports of the iPad, for reasons I don't yet understand. They are even confiscating iPads from travelers.
Questions which are rarely asked
How did Afghanistan, which was overrun and ruled by a series of foreign dynasties for more than a thousand years, become renowned as the "graveyard for empires" in the nineteenth and twentieth centuries…?
…How did a ruling dynasty established in 1747 manage to hold power over such a fractious people until 1978, and why has the Afghan state since then experienced such difficulties in reestablishing a legitimate political order?
Both of those questions are from the new and excellent book Afghanistan: A Cultural and Political History, by Thomas Barfield. Most of all this is a conceptual treatment of the history of the country and its different regions. The book's home page is here.
How politically segregated are the networks of the internet?
For all the complaints you hear, internet reading is much less segregated than the networks of our work, family, and friends (all given formal measurements in the paper). Jesse Shapiro and Matt Gentzkow report:
We use individual and aggregate data to ask how the Internet is changing the ideological segregation of the American electorate. Focusing on online news consumption, offline news consumption, and face-to-face social interactions, we define ideological segregation in each domain using standard indices from the literature on racial segregation. We find that ideological segregation of online news consumption is low in absolute terms, higher than the segregation of most offline news consumption, and significantly lower than the segregation of face-to-face interactions with neighbors, co-workers, or family members. We find no evidence that the Internet is becoming more segregated over time.
Here are some details:
The average Internet news consumer’s exposure to conservatives is 57 percent, slightly to the left of the US adult population. The average conservative’s exposure is 60.6 percent, similar to a person who gets all her news from usatoday.com. The average liberal’s exposure is 53.1 percent, similar to a person who gets all her news from cnn.com. The isolation index for the Internet is 7.5 percentage points, the difference between the average conservative’s exposure and the average liberal’s exposure.
News consumers with extremely high or low exposure are rare. A consumer who got news exclusively from nytimes.com would have a more liberal news diet than 95 percent of Internet news users, and a consumer who got news exclusively from foxnews.com would have a more conservative news diet than 99 percent of Internet news users.
…Visitors of extreme conservative sites such as rushlimbaugh.com and glennbeck.com are more likely than a typical online news reader to have visited nytimes.com.
This is one of the best papers on on-line media.
Is there a flypaper effect for public health-based foreign aid?
If you give people, or a government, money to do one thing, they might reallocate some of those funds to their preferred marginal expenditures. A recent study published in Lancet, co-authored by Christopher Murray and Chunling Lu, suggests this is what happens with many instances of foreign aid:
"For every $1 of DAH [development assistance for health] given to government, the ministry of finance reduces the amount of government expenditures allocated to the ministry of health and other government agencies that engage in health spending by about $0.43 to $1.14," they write. "From the global health community's perspective, this means that to increase government health spending by $1, global health funders need to provide at least $1.75 of DAH."
Furthermore debt relief does not increase domestic government health care spending but grants to NGOs, unlike direct foreign aid to governments, do increase such spending. A summary of the study is here. Here is an abstract and a gated link.
Is the conservative mind more closed?
Julian Sanchez writes:
I’ve written a bit lately about what I see as a systematic trend toward “epistemic closure” in the modern conservative movement. As commenters have been quick to point out, of course, groupthink and confirmation bias are cognitive failings that we’re all susceptible to as human beings, and scarcely the exclusive province of the right …Yet I can’t pretend that, on net, I really see an equivalence at present: As of 2010, the right really does seem to be substantially further down the rabbit hole.
Andrew Sullivan offers up some related links and commentary. I tend to agree with Sanchez and Sullivan, but I thought you all would be a good group to poll. Please offer up your opinion in the comments.
Do black mayors improve black employment outcomes?
My colleagues John Nye, Ilia Rainer, and Thomas Stratmann say maybe so:
To what extent do politicians reward voters who are members of their own ethnic or racial group? Using data from large cities in the United States, we study how black employment outcomes are affected by changes in the race of the cities’ mayors between 1971 and 2003. We find that black employment and labor force participation rise, and the black unemployment rate falls, during the tenure of black mayors both in absolute terms and relative to whites. Black employment gains in municipal government jobs are particular large, which suggests that our results capture the causal effects of black mayors. We also find that the effect of black mayors on black employment outcomes is stronger in cities that have a large black community. This suggests that electoral incentives may be an important determinant of racial favoritism. Finally, we also find that, corresponding to increases in employment, black income is higher after black mayors take office. Again, this effect is pronounced in cities with a large black population.
Politics isn’t about policy, installment #734
Matt Yglesias writes:
To borrow an idea from Robin Hanson, I think it’s useful to think about political conflict in terms of valorized figures. On the right, you see a lot of valorization of businessmen. On the left, you see a lot of valorization of pushy activists who want to do something businessmen don’t like. Formally, the right is committed to ideas about free markets and the left is committed to ideas about economic equality. But in practice, political conflict much more commonly breaks down around “some stuff some businessmen want to do” vs “some stuff businessmen hate” rather than anything about markets or property rights per se. Consequently, on the left people sometimes fall into the trap of being patsies for rent-seeking mom & pop operators when poor people would benefit more from competition from a corporate bohemoth.
*Europe, Europe: Forays into a Continent*
I very much enjoyed reading this now-dated (1989) but still insightful volume of country-specific essays by Hans Magnus Enzensberger, one of Germany's leading public intellectuals. The chapter on Sweden was my favorite. Here is one good bit:
The "motley feudal ties" to which Marx alludes in the Communist Manifesto were torn asunder here earlier than anywhere else, to be replaced by a strictly organized centralized state. Oxenstierna, an administrative genius, invented the prefectorial system two hundred years before Napoleon. He sent governors armed with executive powers into all the regions of the kingdom. They even had military means at their disposal to enforce the king's policies against the interests of the provinces. He created the first national atlas and the first central bank in the world. And so on. Does all this have no implications for the present condition of the country and for the problems of its institutions?
Enzensberger also refers to Sweden as a country which has liquidated its own history in a bout of extreme forgetfulness. I also liked this bit on Italy:
The great strength of this system is that it works not only from the top down but also from the bottom up — because even the poor, the "underprivileged," have their privileges, their consolations, and prerogatives. The concierge apportions his favors and his punishments as he pleases, and the doorkeeper enjoys a mysterious power, of which his boss, the minister, is quite ignorant.
You can buy the book here.
Colombia (China) estimate of the day
"It costs me as much to ship goods from China to Colombia's main Pacific port, as it does from the Pacific coast up to Bogotá," says one businessman.
The article is interesting throughout, for instance:
Until five years ago, only 15 per cent of Colombia's roads were paved, most of them single lane. In a country where some 70 per cent of cargo is hauled by truck, that made high transport costs a regular burden.
Do daughters make you more conservative?
Dalton Conley and Emily Rauscher report:
Washington (2008) finds that, controlling for total number of children, each additional daughter makes a member of Congress more likely to vote liberally and attributes this finding to socialization. However, daughters’ influence could manifest differently for elite politicians and the general citizenry, thanks to the selection gradient particular to the political process. This study asks whether the proportion of female biological offspring affects political party identification. Using nationally-representative data from the General Social Survey, we find that female offspring induce more conservative political identification. We hypothesize that this results from the change in reproductive fitness strategy that daughters may evince.
I don't yet see an ungated copy, do you? By the way, I applaud the authors for their "stones" in writing the last paragraph of the paper, such as:
The conservative emphasis on family, traditional values and gender roles, and prolife anti-abortion sentiments all stress investment in children – for both men and women. Conservative policies mirror the genetic interests of women, writ large. They attempt to promote paternal investment in offspring. Further, they stress investment in conceived offspring – “a bird in the hand is worth two in the bush.” In short, Conservative policies support the genetic fitness of women by capitalizing on each pregnancy, reducing male promiscuity, and increasing paternal investment in children. Such policies may impinge on the freedom of parents’ immediate offspring, but they increase the expected number of grandchildren via daughters.
I'm not sure that's true as stated, but it does deserve further debate.
“Alternatively, thoughts on Margaret Atwood or Arundhati Roy.”
That was a reader request. My thoughts are simple:
I am a fan of Atwood's Cat's Eye and The Handmaid's Tale, both of which are well constructed and compelling on virtually every page. Many of her other books seem meritorious to me (The Blind Assassin, Robber's Bride), but I don't enjoy finishing them and my attention ends up wandering. The failing may be mine. I don't think I would find her non-fiction book on debt very interesting but I haven't tried it.
Roy's The God of Small Things impressed me as I was reading it, but since then it has vanished from my mind. Her musings on economics, or for that matter politics, are under-informed to say the least. I view her as a "one hit wonder" and I am not even sure the one hit stands up. I admire Atwood's humanity and universality and scope of vision, even when I think her work is failing to connect; I don't have a similar response to Roy.
Plain speaking
The oddest thing about the health care debate, at least in my view, is that Republicans basically did not engage on the actual substance of the bill. Lots of stuff about death panels, and lots of stuff about procedure, lots of stuff about backroom deals (most of which will be gone after reconciliation) but shockingly little about the individual mandate — or, as Tim Noah points out, about the actual taxes that really are being raised for this. The only real substantive complaint they highlighted was Medicare, where they argued against their own position.
That's from Jonathan Bernstein. David Frum is also right on the mark.
Mistakes in Grenada
After Hurricane Ivan, the government of the People's Republic of China (PRC) paid for the new $40 million national stadium, and provided the aid of over 300 labourers to build and repair it. During the opening ceremony, the anthem of the Republic of China (ROC, Taiwan) was accidentally played instead of the PRC's anthem, leading to the firing of top officials.
That's from Wikipedia.