Category: Political Science

My Conversation with Alain Bertaud

Excellent throughout, Alain put on an amazing performance for the live audience at the top floor of the Observatory at the old World Trade Center site.  Here is the audio and transcript, most of all we talked about cities.  Here is one excerpt:

COWEN: Will America create any new cities in the next century? Or are we just done?

BERTAUD: Cities need a good location. This is a debate I had with Paul Romer when he was interested in charter cities. He had decided that he could create 50 charter cities around the world. And my reaction — maybe I’m wrong — but my reaction is that there are not 50 very good locations for cities around the world. There are not many left. Maybe with Belt and Road, maybe the opening of Central Asia. Maybe the opening of the ocean route on the northern, following the pole, will create the potential for new cities.

But cities like Singapore, Malacca, Mumbai are there for a good reason. And I don’t think there’s that many very good locations.

COWEN: Or Greenland, right?

[laughter]

BERTAUD: Yes. Yes, yes.

COWEN: What is your favorite movie about a city? You mentioned a work of fiction. Movie — I’ll nominate Escape from New York.

[laughter]

BERTAUD: Casablanca.

Here is more:

COWEN: Your own background, coming from Marseille rather than from Paris —

BERTAUD: I would not brag about it normally.

[laughter]

COWEN: But no, maybe you should brag about it. How has that changed how you understand cities?

BERTAUD: I’m very tolerant of messy cities.

COWEN: Messy cities.

BERTAUD: Yes.

COWEN: Why might that be, coming from Marseille?

BERTAUD: When we were schoolchildren in Marseille, we were used to a city which has a . . . There’s only one big avenue. The rest are streets which were created locally. You know, the vernacular architecture.

In our geography book, we had this map of Manhattan. Our first reaction was, the people in Manhattan must have a hard time finding their way because all the streets are exactly the same.

[laughter]

BERTAUD: In Marseille we oriented ourselves by the angle that a street made with another. Some were very narrow, some very, very wide. One not so wide. But some were curved, some were . . . And that’s the way we oriented ourselves. We thought Manhattan must be a terrible place. We must be lost all the time.

Finally:

COWEN: And what’s your best Le Corbusier story?

BERTAUD: I met Le Corbusier at a conference in Paris twice. Two conferences. At the time, he was at the top of his fame, and he started the conference by saying, “People ask me all the time, what do you think? How do you feel being the most well-known architect in the world?” He was not a very modest man.

[laughter]

BERTAUD: And he said, “You know what it feels? It feels that my ass has been kicked all my life.” That’s the way he started this. He was a very bitter man in spite of his success, and I think that his bitterness is shown in his planning and some of his architecture.

COWEN: Port-au-Prince, Haiti — overrated or underrated?

Strongly recommended, and note that Bertaud is eighty years old and just coming off a major course of chemotherapy, a remarkable performance.

Again, I am very happy to recommend Alain’s superb book Order Without Design: How Markets Shape Cities.

Premature Imitation and India’s Flailing State

Walking around one of the tonier districts of Mumbai I came across a sign, “Avoid Using Plastic Carry Bags.” The sign would not have been out of place in Portland or Berkeley but less than a block away cows and people were sleeping on the street. The incongruity motivated my new paper, Premature Imitation and India’s Flailing State (with Shruti Rajagopalan). We argue that one reason that India passes laws which are incongruous with its state of development is that Indian elites often take their cues about what is normal, good and desirable from Western elites. There’s nothing wrong with imitation, of course. We hope that good policies will be imitated but imitation in India is often premature. Premature because India does not have the state capacity to enforce the edicts of a developed country.

India has essentially all the inspections, regulations, and laws a developed country such as the United States has, but at approximately $235 of federal spending per capita the Indian government simply cannot accomplish all the tasks it has assumed. Consider: U.S. federal government spending per capita was five times higher in 1902 than Indian federal government spending per capita in 2006 (Andrews, Pritchett, and Woolcock 2017, 58). Yet the Indian government circa 2006 was attempting to do much more than the U.S. government did in 1902.

Premature imitation doesn’t simply mean that proportionately less is done it results in tensions that lead to corruption and a flailing state, a state that cannot implement its own rules because it is undercut by the incentives of its own agents. Premature imitation amplifies a development trap.

What then is to be done? We argue that the ideal policy regime for a government with limited state capacity is presumptive laissez-faire.

The Indian state does not have enough capacity to implement all the rules and regulations that elites, trying to imitate the policies of developed economies, desire. The result is premature load bearing and a further breakdown in state capacity….At the broadest level, this suggests that states with limited capacity should rely more on markets even when markets are imperfect—presumptive laissez-faire. The market test isn’t perfect, but it is a test. Markets are the most salient alternative to state action, so when the cost of state action increases, markets should be used more often.Imagine, for example, that U.S. government spending had to be cut by a factor of ten.Would it make sense to cut all programs by 90 percent? Unlikely. Some programs and policies are of great value, but others should be undertaken only when state capacity and GDP per capita are higher. As Edward Glaeser quips,“A country that cannot provide clean water for its citizens should not be in the business of regulating film dialogue.” A U.S. government funded at one-tenth the current level would optimally do many fewer things. So why doesn’t the Indian government do many fewer things?

Presumptive laissez-faire is not an argument that laissez-faire is optimal but an argument that state capacity is a limited resource that must be allocated wisely. The idea runs against the “folk wisdom” of development economics. The folk wisdom says that developing countries today can leap over the laissez-faire period  that most developed countries went through and instead move directly to the middle way.

In the alternative view put forward here, relative laissez-faire is a step to development, perhaps even a necessary step, even if the ultimate desired end point of development is a regulated, mixed economy. Presumptive laissez-faire is the optimal form of government for states with limited capacity and also the optimal learning environment for states to grow capacity. Under laissez-faire, wealth, education, trade, and trust can grow, which in turn will allow for greater regulation.

Read the whole thing.

What should I ask Henry Farrell?

I will be doing a Conversation with him, no associated public event.  As you read blogs, you might know Henry’s longstanding work over at CrookedTimber, and also his role in Monkey Cage.  Henry is also professor of political science at George Washington University, has with Abraham L. Newman recently published a path-breaking book on the increasingly important concept of weaponized interdependence, is an expert on comparative labor relations, and is an all-around polymath, including on fiction, science fiction, and the politics of Ireland, his home country.  Here is his home page.

So what should I ask Henry?

We had Nash and Schelling — who did the Soviets have?

The bi-polar confrontation between the Soviet Union and the USA involved many leading game theorists from both sides of the Iron Curtain: Oskar Morgenstern, John von Neumann, Michael Intriligator, John Nash, Thomas Schelling and Steven Brams from the United States and Nikolay Vorob’ev, Leon A. Petrosyan, Elena B. Yanovskaya and Olga N. Bondareva from the Soviet Union. The formalization of game theory (GT) took place prior to the Cold War but the geopolitical confrontation hastened and shaped its evolution. In our article we outline four similarities and differences between Western GT and Soviet GT: 1) the Iron Curtain resulted in a lagged evolution of GT in the Soviet Union; 2) Soviet GT focused more on operations research and issues of centralized planning; 3) the contemporary Western view on Soviet GT was biased and Soviet contributions, including works on dynamic stability, non-emptiness of the core and many refinements, suggest that Soviet GT was able to catch up to the Western level relatively fast; 4) international conferences, including Vilnius, 1971, fostered interaction between Soviet game theorists and their Western colleagues. In general, we consider the Cold War to be a positive environment for GT in the West and in the Soviet Union.

That is from a new paper by Harald Hagemann, Vadim Kufenko, and Danila Raskov, via Ilya Novak and Beatrice Cherrier.  And via Kevin Vallier, here is a new paper on how Schelling’s game-theoretic notion of stability may have come from his very early work on macroeconomics.

Why do rates of entrepreneurship vary?

Why do societies vary in their rates of entrepreneurship and organizational founding? Drawing on the largest available longitudinal sample comprising 192 countries over 2001-2018, I examine the evidence in relation to several explanations, including variation in the density of established organizations, national investment in research and development (R&D), technology transfer to new companies, the quality of science, technology, engineering and math (STEM) education, venture capital (VC) availability, and governmental support and policies for entrepreneurship. Contrary to prevailing theories, there is limited empirical support for these explanations. Rather, the evidence shows that the strongest predictors of cross-national variation in entrepreneurial activity were normative, with social norms being the most strongly associated with entrepreneurialism and rates of organizational founding. This study further examines the relationship between norms and societal culture and finds that more gender-egalitarian societies and societies that value and reward performance and endorse status privileges had on average higher rates of organizational founding, net of differences in national income and economic growth. The paper discusses the implications of these findings in relation to research on the social determinants of entrepreneurship and organizational founding.

That is from a new paper by Valentina Assenova.  Let me just repeat one sentence in there, as it is one of the most important sentences in all of economics:

Rather, the evidence shows that the strongest predictors of cross-national variation in entrepreneurial activity were normative, with social norms being the most strongly associated with entrepreneurialism and rates of organizational founding.

Recommended.  Here is Assenova’s other new paper, showing entrepreneurship is correlated with higher innovation.

Via the excellent Kevin Lewis.

The ho-hum of environmental politics

For better or worse, it is not the source of so much political romance or glamour:

The public influences government policy primarily through elections. Elections affect policy largely by determining which party controls the government. We show that a majority of the public supports policies to protect the environment. But the environment is rarely the most important issue for voters, and thus the environment usually does not have a large impact in elections. Moreover, there are increasingly large divisions between Democrats and Republicans, which incentivizes politicians from both parties to embrace extreme positions. Democratic and Republican elected officials are increasingly polarized on environmental issues, with Democrats staking out much more liberal positions than Republicans in Congress. At the state level, Democratic control of legislatures and governorships leads to more stringent environmental policies. Democratic control of state government seems to have smaller effects, however, on environmental outcomes, such as air pollution emissions.

That is the abstract of a new working paper by Parrish Bergquist and Christopher Warshaw.

Frequency of conflict initiation worldwide

That is from the new and interesting Only the Dead: The Persistence of War in the Modern Age, by Bear F. Braumoeller, which is largely a critique of Pinker on trends toward peacefulness (Pinker gives only the more optimistic data on Europe).  And from the text:

…there is variation in the rate of conflict and war initiation over time, and it’s pretty substantial.  Leaving aside the two jumps during the World Wars, the median rate of conflict initiation quadruples in the period between 1815 and the end of the Cold War, after which it abruptly drops by more than half.

The “falling rate of conflict” is thus not entirely reassuring.

How about the deadliness of occurring conflicts?:

Analyzing the two most commonly used measures of the deadliness of war, I find no significant change in war’s lethality.  If anything, the data indicate a very modest increase in lethality, but that increase could very easily be due to chance…Worse still, the data are consistent with a process by which only random chance prevents small wars from escalating into very, very big ones.

Overall, the arguments in this book are strong, and the discussion of data issues is subtle throughout.  You can buy the book here, its arguments seem fundamentally correct to me.

Lebanese/Gaza marriage markets in everything

Political parties sponsor weddings for young members to reinforce their loyalty, and gratitude. Religious and ethnic minorities — which means everyone in splintered Lebanon — consider marriage and procreation essential to their long-term survival. And armed groups encourage their fighters to marry so that their children can become the fighters of the future.

A few weeks before the Maronite nuptials, Hezbollah, the Shiite militant group and political party, oversaw a similar enormous wedding for 31 couples. That was tiny compared with a mass wedding in Lebanon earlier this year that brought together 196 couples and was sponsored by the Palestinian Authority president, Mahmoud Abbas.

But the nearby Gaza Strip — where an Egyptian-Israeli blockade keeps people poor and locked in — beats them all, often because of competition between foreign sponsors eager to win friends by expediting marriages.

In 2015, the United Arab Emirates sponsored a mass wedding there for 200 couples. Two months later, Turkey seriously upped the ante, bankrolling a ceremony for 2,000 couples that was attended by officials from Hamas, the militant group that rules the territory…

Fadi Gerges, an official with the league, said it was natural for minorities to encourage their youths to procreate in a country where demographics affect power.

Here is the rest of the Ben Hubbard NYT story, via the excellent Kevin Lewis.

Brexit update (POTMR)

Boris Johnson is planning to force a new Brexit deal through parliament in just 10 days — including holding late-night and weekend sittings — in a further sign of Downing Street’s determination to negotiate an orderly exit from the EU. According to Number 10 officials, Mr Johnson’s team has drawn up detailed plans under which the prime minister would secure a deal with the EU at a Brussels summit on October 17-18, before pushing the new withdrawal deal through parliament at breakneck speed.

The pound rose 1.1 per cent against the US dollar to $1.247 on Friday amid growing optimism that Mr Johnson has now decisively shifted away from the prospect of a no-deal exit and is focused on a compromise largely based on Theresa May’s withdrawal agreement.

That is new from the FT, here is part of my Brexit post from August 29:

I would sooner think that Boris Johnson wishes to see through a relabeled version of the Teresa May deal, perhaps with an extra concession from the EU tacked on.  His dramatic precommitment raises the costs to the Tories of not supporting such a deal, and it also may induce slight additional EU concessions.  The narrower time window forces the recalcitrants who would not sign the May deal to get their act together and fall into line, more or less now.

Uncertainty is high, but the smart money says the Parliamentary suspension is more of a stage play, and a move toward an actual deal, than a leap to authoritarian government.

This remains very much an open question, but if you “solve for the equilibrium,” that is indeed what you get.

My Conversation with Samantha Power

Samantha Power has a new and excellent book out, The Education of an Idealist: A Memoir, which I very much enjoyed.  And so a Conversation with Tyler was in order, here is the audio and transcript, here is one bit:

COWEN: For a final closing segment, I just have some super simple questions about foreign policy again. Over the course of the last summer, Iran apparently seized two British tankers. There’ve been other incidents in the Strait of Hormuz in some way connected with Iran. From a game-theoretic point of view, why would they do this? Why does this make sense?

POWER: Well, the one thing that they would know that would give them some point of leverage is the extreme war fatigue within the United States, and really within the Western world. So, by upping the stakes, arguably — I mean, who knows why the hell they’re doing what they’re doing?

But by upping the stakes, they arguably could be sending a signal like, “You want to get in this game? It’s not as if we’re an island and you can just break the deal, penalize us gratuitously, penalize the people who are still trying to maintain the terms of the deal, and that there won’t be collateral consequences outside the nuclear space.”

Because the nuclear consequences, as they begin to enrich and violate the terms of the deal — having legitimately argued that we had violated the terms of the deal — the effects of those are not day-to-day effects in the news world. It’s a bit abstract for the public and even for policymakers. It’s an incremental abrogation.

But acts like this show that they have leverage, that they are active militarily in parts of the world where we have a vested interest in maintaining freedom of navigation. So I think they’re showing that they can hit in domains outside the nuclear domain. I think that is probably what they’re doing.

Here is another segment:

COWEN: In which ways do you feel your thought is in some manner still Irish in orientation in a way that would distinguish you from, say, American-born individuals?

POWER: It’s hard to know because I can’t run the counterfactual, so I don’t know what’s just because my mother is a physician and very empathetic toward her patients, and do I learn from that? Or am I moved by having come from a small country, at that time a poor country, that was sending —

COWEN: With a history of oppression, right?

POWER: With a history of oppression, with a history of the dignity of its people being trampled. Is that why I care so much about individual dignity? Again, I can’t run the history a different way.

And finally:

COWEN: Very simple — are baseball games too long? Why not make it 7 innings?

POWER: Why not make it 12?

COWEN: It’s boring, right?

POWER: For you and, as it turns out, for others.

COWEN: For me. So many games are over 3 hours. Shouldn’t the game be 2 hours, 17 minutes?

We also cover her first impressions of America, being a wartime correspondent, China and Iraq, Star Wars vs. Star Trek, van Morrison vs. Bob Dylan, robot empires vs. robot umpires, her favorite novel, how personal one should get in a memoir and why, and German defense spending, among other topics.

Definitely recommended.

Special Emergent Ventures tranche to study the nature and causes of progress

I am pleased to announce the initiation of a new, special tranche of the Emergent Ventures fund, namely to study the nature and causes of progress, economic and scientific progress yes but more broadly too, including social and cultural factors.  This has been labeled at times “Progress Studies.

Simply apply at the normal Emergent Ventures site and follow the super-simple instructions.  Feel free to mention the concept of progress if appropriate to your idea and proposal.  Here is the underlying philosophy of Emergent Ventures.

And I am pleased to announce that an initial award from this tranche has been made to the excellent Pseudoerasmus, for blog writing on historical economic development and also for high-quality Twitter engagement and for general scholarly virtue and commitment to ideas.

Pseudoerasmus has decided to donate this award to the UK Economic History Society.  Hail Pseudoerasmus!

*Jewish Emancipation: A History Across Five Centuries*

That is the new and excellent book out by David Sorkin.  I feel I have read many good books on Jewish history, and I don’t always see the marginal value of adding to that pile, but this one really delivered.  Plenty more detail without losing any conceptual overview.  Ever wonder what exactly happened to Jewish emancipation, and why, as the Napoleonic conquest of Europe was reversed?  This is the place to go.  By the way, in the middle of the eighteenth century there were more Jews in Curacao, Suriname and Jamaica than in all of the North American colonies combined.

You can order it here, worthy of my year-end “best non-fiction of the year” list.

Rebuilding the British right?

For most of the postwar era, the Conservative Party prided itself on its ability to tell an economic story. Tories traditionally explained their right to govern in terms of an overarching economic vision for the country, a vision which was instantiated in policy and which often set the political agenda.

From Macmillan to Thatcher to Cameron, they presented themselves as the party of national prosperity, and of hard-nosed economic realities, and many people voted for them on this basis. But this no longer seems to be the case.

The last few years have witnessed what elsewhere we called the Strange Death of Tory Economic Thinking. In the years following the EU Referendum, Conservatives in Britain largely dropped the economy from the heart of their political story. This is not just a criticism of Mayism, with its Home Office view of the world; many who professed to be market liberals seemed to do so performatively, without serious consideration of what they wanted to deregulate or how.

The recent change of Prime Minister provides an opportunity to put this right. We hope that the new government will turn away from the trajectory of the last three years, and start taking economics seriously again. If it chooses not to, we would urge others on the centre-right to take up the challenge.

This paper is an attempt to sketch out some principles for a centre-right economic outlook, and some specific policies to focus on.

We begin by presenting a few important stylised facts about the contemporary British economy that should frame an economic narrative; we then set out some political principles for how to turn these into economic policy.

Based on these, we set out a set of policies in four areas where we think progress can be made: tax, housing, infrastructure and devolution, and innovation and technology.

Finally, we conclude with some long-term actions that need to be taken to begin rebuilding an economic narrative for the Right.

This website was written by Sam Bowman and Stian Westlake. If you would like to discuss it, they can be contacted via Twitter (@s8mb and @stianwestlake respectively). If you would like a PDF of the whole website, you can find one here.

Here is the link.