Category: Political Science

The Washington Post has just finished a 27-part series on lobbying.  It’s an interesting series full of colorful characters and great anecdotes but very little on the root of the problem.  In the conclusion, I found just one sentence:

As the reach of the federal government extended into more corners of American life, opportunities for lobbyists proliferated.

In case you hadn’t noticed, the betting markets now favor former Senator and Hollywood star Fred Thompson over John McCain in the race for the GOP nomination.  Right now the difference is running about 21 to 18 percent, with Giuliani ahead of both.

A loyal MR reader tries to stop me from reaching #50:

Economic Development for the heterogeneous Latin America.  Or how the social, economic and cultural heterogeneity between and within Latin American countries affect their development prospects and/or strategies.  You have mentioned that a stronger (not bigger) state seems necessary; but does that mean different things for Bolivia, Guatemala, Ecuador and Peru, versus Colombia, El Salvador, Costa Rica, Paraguay and Argentina?

In response (non-response?) I’ll quote Jeff Sachs (this link is also an excellent piece on him):

I’m optimistic about Brazil.  And if you look at a map, being
optimistic about Brazil takes you a long way to being optimistic about
the whole of Latin America.  I don’t lose huge sleep over Latin America
– it’s at peace, it’s not riven by terrorism, it’s democratic and it
has made huge strides in human development.  What have been hugely
unequal and divided societies are becoming slowly more equal, and even
very deep ethnic and racial divisions are being ameliorated through
democratic politics.

I’ll add that Latin American states are usually a disaster when it comes to collecting taxes.  This might sound good from a libertarian point of view, but those governments instead resort to distortionary monopolies and corruption to raise revenue or capture political rents.  The solution is not higher taxes per se (governance improvements are also needed), but rather a series of sideways squiggles into the "greater accountability, more tax-based" modes of government.  That doesn’t come easy, and that is also why the usual recipe of privatization so frequently disappoints or backfires.  These territories have yet to build well-functioning nation-states.

Western-style neoclassical economics was designed for settings where national institutions are already in place.  In most of the world, they are not.  The question is not "market vs. government," but how to strengthen the norms and institutions that will build both markets and governments at the same time and in the right directions.  Along that dimension, Latin America is making real strides ahead, and that includes all of the countries listed in the initial query, with the possible exception of Bolivia.

#38 in a series of 50.

In Venice I read how the Japanese are concerned about the U.S.-South Korea free trade agreement, and might seek their own trade deal with the United States.  The Japanese are afraid of being "left out in the cold."  I’ve also read speculation that a South Korean trade agreement might make Congress look more favorably upon free trade agreements with Latin America.  So why might one free trade agreement lead to others?  I can think of a few hypotheses:

1. Free trade agreements lead to considerable amounts of trade diversion, not just more trade.  The "left out" countries fear that trade diversion and thus wish to cut their own bilateral deals.

2. Free trade agreements show that other governments have found a commitment to greater trade worthwhile.  This may signal that either that benefits of trade are especially high, or that anti-trade interest groups are especially weak.

3. There is a big copycat effect in politics and public opinion, as evidenced by the historical clustering of revolutions and reforms.

4. A bilateral free trade agreement means that the U.S. will regard South Korea as a closer political ally than before, and Japan (and others) wish to keep in step.  In particular Japan wishes to keep "first dibs" on U.S. military protection and be the "go-to" country in international fora and joint endeavors.

What have I left out?

Note that under #1, bilateral trade agreements might lead to inefficient trade diversion, but the resulting spread of trade agreements will reverse many of those costs.

Here is John Nye on the historical tendency of free trade agreements to prove contagious.  Here is Mark Thoma on trade diversion.

The bottom line: I haven’t read the details of the U.S.-South Korea agreement, but I suspect that in this setting even a highly imperfect trade agreement is a net plus.

In Italy, on my way back home, these are the papers one’s thoughts turn to:

In immature democracies, businessmen run for public office to gain direct control over policy; in mature democracies they typically rely on other means of influence.  We develop a simple model to show that businessmen run for office only when two conditions hold.  First, as in many immature democracies, institutions that make reneging on campaign promises costly must be poorly developed.  In such environments, office holders have monopoly power that can be used to extract rents, and businessmen run to capture those rents.  Second, the returns to businessmen from policy influence must not be too large, as otherwise high rents from holding office draw professional politicians into the race, crowding out businessmen candidates.  Analysis of data on Russian gubernatorial elections supports these predictions.  Businessman candidates are less likely 1) in regions with high media freedom and government transparency, institutions that raise the cost of reneging on campaign promises, and 2) in regions where returns to policy influence measured by regional resource abundance are large, but only where media are unfree and government nontransparent.

Here is the paper.  From the same seminar series, here is a Jim Fearon paper on how democracy minimizes the cost of rebellion.

Dictatorships are generally most brutal when the fear of being overthrown is strongest.  The most benevolent dictatorships, in relative terms, tend to have strong roots in the country’s social and economic power centers.  This would help explain, for instance, why the minority Sunni Saddam Hussein was so tyrannical against his potential opponents.  Without extreme oppression, he would have lost power and his life.

The optimistic scenario for Iraq was (way back when) that a Shiite autocracy, with broad-based public support, would be considerably less brutal.  Once in power, the ruling clique would find it much easier to stay in power without extreme brutality.  At least that is how the theory went.

In this view, the critical U.S. mistake was not disbanding the (largely Sunni) army, which was in any case inconsistent with the best available power structure.  The critical mistake was creating a government that had no real unity and no real chance of having power on the ground.

The pessimistic scenario is that there are no broad-based constituencies left, or perhaps there never were any in the first place.  Under the former case American policy has been far more harmful, in net terms, than under the latter case.  It is possible that our handling of the transition disbanded whatever broad-based groups were in place to eventually rule.  Or perhaps Saddam had already destroyed them.

Partition has a certain logic in this model.  But there is no one to effectively oversee the process of division and allocation, either for the population or the oil.  I would expect a good million or half million lives to be lost from the resulting slaughter and the forced migrations of population.

To repeat, I am not claiming this model is true.  But if it is false, it is worth thinking about what further assumptions should be added or which current assumptions should be dropped.

Addendum: Modeling the current Iraq is difficult for a few reasons.  It is rare for an occupying power to set up a democracy, so historical data are scarce.  In any case this is not the world of MacArthur and postwar Japan.  Nor is it the democracy of Anthony Downs or Arendt Lijphart.  For many unusual governmental forms, I start with the implicit models of Gordon Tullock’s Autocracy and the problems of stability and cycling autocratic coalitions.  But Iraq seems too far from stability for cycling to be the major problem.  The instability seems radically overdetermined, and that makes comparative statics difficult.

The closest parallel I can think of is Yugoslavia in the early 1990s, when relative stability gave way to bloodshed.  Fear encouraged a mental overinvestment in strategies of ethnic solidarity and many groups started launching pre-emptive attacks, leading to widening circles of violence and then greater fear.

There are many smart writers on Iraq, with varying degrees of knowledge and information.  I wish more of them would seek to provide a simple model of what is going on.

If you do leave comments, please focus on public choice issues rather than attacking or defending the war itself.

Find it here, the conclusion is that Hispanics are following traditional immigration patterns and do not represent an outlier, as suggested by Samuel Huntington.

That is why in France, candidates not only kiss babies, they kiss cows.

That is by Stephen Clarke, in the New York Times Op-Ed page.

Not very.

#32 in a series of 50.

With Anastasia Uglova of Cato, talking about the intellectual crisis in libertarianism.  If you have trouble at that link (the page should look almost blank, just click on the play button), go through this page, or the archives.

Bravo.  Excerpt:

Oddly enough, promoting liberty may in some cases require libertarians to work at state-building, or at least state-reforming.

Addendum: Virginia offers further comments, including a correct psychoanalysis of me.

…I hate candidate blogging, but here is my neck on the line.  Obama faces too high a chance of self-destruction through scandal, meltdowns, and lack of testing at the national level.  Hillary has too many people who won’t change their mind about her, is too unpopular with suburban Cincinnati housewives, and looks shrill and ugly on TV.  Americans are tired of family dynasties in the White House.  Edwards has the best chance of any Democrat but won’t get the nomination.  Democrats do well when voters’ main concern is the economy, not foreign policy; that won’t be the case.  No matter how badly Iraq goes it helps the Republicans, who benefit from an emphasis on foreign policy, an area where Democrats are never trusted.  It is the Democrats who will tear themselves apart over Iraq, not the Republicans.  The evangelicals hate a Mormon candidate more than an immoral candidate; the latter allows them to stay unified.  McCain looks too old these days, and he peaked too early, so I’ll predict Giuliani as our next President.  Speeding up the primaries will make it harder for the Christian Right to sabotage him.  Rudy has many political negatives, including his name, his home state, and his flamboyant personal history, but all will be neutralized when his opponent is Hillary Clinton.

Don’t expect to hear about this topic again.

Tyrone, like many other people, enjoys reading Instapundit.  Today he sent me the following by IM, or was it Google Talk?:

Global warming is easy to stop.  Is a carbon tax costly?  No way.  Didn’t we already agree that stopping global warming is wealth-maximizing for the world as a whole?  Then we just have to work out the right set of transfers.  As a first-order oversimplification, global warming benefits North Dakota but harms Bangladesh by a greater amount.  North Dakota cuts a deal with Bangladesh.  The two state Senators will support a carbon tax in return for FREE CALL CENTRES FOR FIFTY YEARS.  Or whatever is needed.  After all, a bargain is there.  We might even use the UN, or a revamped Kyoto agreement, to support and organize the deal.

You can see this agreement is self-enforcing, right?  If payment is not made, we can always take the carbon tax away.  Or do something even nastier with those silos up there in the Peace Garden State.  Obviously America could turn a profit on this whole carbon tax deal.  This might sound unfair, but surely it is less unfair than ignoring the problem altogether…

Sadly, Tyrone is still waiting for a response from Tyler.  Tyler thinks Tyrone is a nasty, nasty man, who has grasped only the worst of Edgeworth and understood none of the best…