Category: Political Science
Strengthening state capacity in low income countries requires raising tax revenue while maintaining political stability. The risk of inciting political unrest when attempting to increase taxes may trap governments in a low-tax equilibrium, but public goods provision may improve both tax compliance and political stability. To test these questions empirically, I partner with the national tax authority and a local mayor’s office in Haiti to cross-randomize both tax collection and public goods across one of the country’s largest cities. Effects are measured both via administrative data on tax revenue as well as through novel measures of political unrest. In the paper’s main result, I show that hand-delivering property tax invoices reduces individual tax compliance by 48%, and increases independently observed measures of localized political violence by 192%. In contrast, providing a valuable and visible public good (namely municipal garbage removal) increases tax compliance by 27%, and reduces localized political violence by 85%. Importantly, public goods provision significantly mitigates the adverse effects of tax collection in neighborhoods receiving both treatments. A cost accounting exercise suggests that providing the public good in this setting could pay for itself within the first year. These findings suggest that it may be possible to peacefully shift to a new equilibrium of higher tax compliance with a sufficient initial investment perhaps financed through foreign aid or other transfers.
I wouldn’t quite say I am for it, and I still wouldn’t myself have done it, but the decision is no longer looking like such a mistake. Since 2016, in matters of defense, Covid control, and migration, the EU has been anything but stellar. Here is the link to my Bloomberg column on this topic. Here is one excerpt:
Then there is the rise of illiberalism in Hungary, and to a lesser extent Poland, which is perhaps the EU’s biggest problem right now. The EU is seeking to withhold aid from those nations for weakening their independent judiciaries, and they are in turn threatening to veto the union’s $2.2 trillion budget and recovery package, which requires unanimous support. In response, the EU is considering approving that package outside its normal procedures.
More likely than not, a compromise will be found. But you have to wonder how long a well-functioning EU can tolerate a non-free nation such as Hungary. The EU certainly does not appear on the verge of kicking Hungary out (Germany, for one, would not welcome such a move, given its strong interests in Eastern Europe). But the challenges to the EU model presented by nations such as Hungary are much worse than they were in 2016, when the Brexit referendum was held.
Even if the EU succeeds in pushing Hungary around — and I hope it does — it is not necessarily a good outcome for the U.K. Such a policy would require weakening the EU’s unanimity requirements on many decisions, and that is something the U.K. should feel uncomfortable about. If Hungary can be pushed around, so can the U.K.
Finally, southeast England is emerging as a global technology center, especially in artificial intelligence and biomedical research. That’s great news for the U.K. But how does it square with the EU’s long-term pursuit of tougher regulations on tech companies, higher privacy standards for platforms and apps, and more stringent regulations on AI algorithms?
Will the U.K. find its interests represented by such a process? Will it be able to develop AI innovations and products without requiring prior permission from Brussels?
Of course we do still need to worry about Ireland, but perhaps this will end up being a nudge in the right direction…
Zach is author of the recent book The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes, which has been on many year-end “best of” lists. Here is the audio, transcript, and video. Here is part of the CWT summary:
Zach joined Tyler to discuss what Keynes got right — and wrong — about the Treaty of Versailles, how working in the India Office influenced his economic thinking, the seemingly strange paradox of his “liberal imperialism,” the elusive central message of The General Theory, the true extent of Keynes’ interest in eugenics, why he had a conservative streak, why Zach loves Samuel Delaney’s novel Nova, whether Bretton Woods was doomed to fail, the Enlightenment intuitions behind early defenses of the gold standard, what’s changed since Zach became a father, his next project, and more.
Here is one excerpt:
COWEN: [Keynes is] sympathetic to his own ideas and wants to promote them. But to me, there’s a discord. Milton Friedman spends, what, 45 minutes talking to Pinochet, has a very long record of insisting economic and political freedom come together — maybe even too simplistically — writes against the system of apartheid in South Africa and Rhodesia, calls for free markets there. And people give Friedman hell over that.
Keynes writes the preface for the Nazis and favors eugenics his whole life, and that’s hardly ever mentioned.
CARTER: I don’t know that the way that Keynes talks about eugenics is as salient as you suggest. The best article that I came across on Keynes and eugenics is by this guy — I think David Singerman. It’s in the Journal of British Studies. It’s a pretty in-depth look at the way Keynes came to eugenics and what he did and did not support. It’s very clear that Keynes didn’t support eugenics in the way that Americans sterilizing poor Black workers in the South were interested in eugenics.
Keynes was broadly interested in it from the perspective of birth control. This is a time when eugenics and genetics are not as clearly defined as they are today, so he’s thinking about heritability of eye colors — how he gets involved in this stuff. He never really supports anything other than birth control.
When he actually has power as a policymaker, he just doesn’t do any of this stuff. He is working on the Beveridge plan. He is working on financial stuff that is much more egalitarian than what we think of him when we think about eugenics.
COWEN: But he is chair of the British Eugenics Society for eight years late in his career.
CARTER: He doesn’t do much there. There are big debates that are happening within that society, and he’s mostly sitting them out. Singerman goes into this in much more detail. It’s been a while since I read the article, but Singerman seems to think that this is a useful way of understanding Keynes’s worldview, but not that Keynes is some guy who’s going around wanting to sterilize people and do the things that we think of with the eugenics movement in the United States.
COWEN: I don’t think he wants to sterilize people, but he has those essays on population, which are not put into the collected works. They’re not mentioned by Roy Harrod. He is greatly worried that the people from some countries — I think including India — will outbreed the people from Britain, and this will wreak havoc on prices and wages, and it’s a big crisis. He even says, “We need to worry not only about the quantity of people, but the quality of people in the world.”
A very good episode, definitely recommended. And here is Zach on Twitter.
Here is a new paper from Gavin Wright:
The Voting Rights Act of 1965 revolutionized politics in the American South. These changes also had economic consequences, generating gains for white as well as Black southerners. Contrary to the widespread belief that the region turned Republican in direct response to the Civil Rights Revolution, expanded voting rights led to twenty-five years of competitive two-party politics, featuring strong biracial coalitions in the Democratic Party. These coalitions remained competitive in most states until the Republican Revolution of the 1990s. This abrupt rightward shift had many causes, but critical for southern voters were the trade liberalization measures of 1994, specifically NAFTA and the phase-out of the Multi-Fiber Arrangement which had protected the textiles and apparel industries for decades. The consequences of Republican state regimes have been severe, including intensified racial polarization, loss of support for public schools and higher education, and harsh policies toward low-income populations.
The last sentence strikes me as misleading and inappropriate (in multiple ways), but still the research is of very real interest. Via the excellent Kevin Lewis.
The incarceration rate has increased substantially in the United States between the 1980s and the 2000s. In this paper, I explore an institutional explanation for this growth: the fact that costs of incarceration are not fully internalized. Typically, prison is paid for at the state level, but county employees (such as judges, prosecutors or probation officers) determine time spent in custody. I exploit a natural experiment that shifted the cost burden of juvenile incarceration from state to counties, keeping overall costs and responsibilities unchanged. This resulted in a stark drop in incarceration, and no increase in arrests, suggesting an over-use of prison when costs are not internalized. The large magnitude of the change suggests that misaligned incentives in criminal justice may be a significant contributor to the current levels of incarceration in the United States.
Although the 1960s race riots have gone down in history as America’s most violent and destructive ethnic civil disturbances, a single common factor able to explain their insurgence is yet to be found. Using a novel data set on the universe of radio stations airing black-appeal programming, the effect of media on riots is found to be sizable and statistically significant. A marginal increase in the signal reception from these stations is estimated to lead to a 7% and 15% rise in the mean levels of the likelihood and intensity of riots, respectively. Several mechanisms behind this result are considered, with the quantity, quality, and the length of exposure to radio programming all being decisive factors.
Previous research has isolated the effect of “congressional dominance” in explaining bureaucracy-related outcomes. This analysis extends the concept of congressional dominance to the allocation of H1N1, or swine flu, vaccine doses. States with Democratic United States Representatives on the relevant House oversight committee received roughly 60,000 additional doses per legislator during the initial allocation period, though this political advantage dissipated after the first 3 weeks of vaccine distribution. As a result political factors played a role in determining vaccine allocation only when the vaccine was in particularly short supply. At-risk groups identified by the Centers for Disease Control (CDC), such as younger age groups and first responders, do not receive more vaccine doses, and in fact receive slightly fewer units of vaccine.
That is from an Economic Inquiry paper by Matt E. Ryan. Via Henry Thompson.
There are certain ideas that are highly seductive, so much so that even “WEIRDOS” occasionally dabble in conspiracy theories. So why weren’t conspiracy theories a bigger part of life in the late 20th century? I believe this is because the media was almost completely controlled by WEIRD people. The news desks at ABC/NBC/CBS stuck to the mainstream version of events, unless they had clear evidence that the official were lying (say after the Ellsberg Papers came out.) So there was no major institution to form and disseminate conspiracy theories. These theories did exist back then, but never gained enough traction to have a big impact on society.
The internet changed everything. More specifically, it democratized information sharing all over the world. There are no more “gatekeepers”. Because less that 10% of the world’s population is truly WEIRD, the internet has made conspiracy theories the dominant epistemic style of the 21st century. Just as the 21st century will be a low interest rate/high asset price century (as I predicted years ago), it will also be a century of widespread conspiracy theories. I doubt whether I’ll live along enough to see another president who is generally accepted as legitimate.
That is from Scott Sumner, there is more at the link.
I don’t think so, as I argue in my latest Bloomberg column, here is one bit:
If you are wondering whether China or the U.S. with its allies is more likely to make a big breakthrough, in, say, quantum computing, ask yourself a simple question: Which network will better attract talented immigrants? The more that talent and innovation are found around the world, the more that helps the U.S.
Perhaps most important, the European Union has evolved from seeing China primarily as a customer to seeing China primarily as a rival. Even Germany, a longstanding advocate for closer ties with China, has become more skeptical. Furthermore, most European nations have ended up agreeing with the U.S. that Chinese telecom giant Huawei be kept out of the critical parts of their communications infrastructure.
It is also worth noting that GPT-3 came out of the Anglosphere, not China, even though we have been hearing for years that China may be ahead in AI.
What is the current take on foreign interference in the 2020 presidential election? I hardly hear anyone mentioning this. Was there much? And if not, why not? Our sagest minds were warning of this for years, and I heard several nat sec experts warn me of this but a few weeks ago. There have been hundreds of media articles about the topic. So what is up? I see a few options:
1. There was lots of foreign interference (again), but things turned out OK so it is not a major issue. “Never mind.”
2. President Donald Trump ensured election integrity through vigilance, good policy, and cooperation with Vladimir Putin.
3. Local election authorities were alert this time around, and they choked off each and every instance of foreign election interference.
4. The major tech companies were alert this time around, and they choked off each and every instance of foreign election interference. They didn’t even let the Russkies spend 60k on Facebook ads. Those are such great companies.
5. Foreign election interference was never much of a significant issue to begin with. “Never mind.”
6. Foreign powers are now all, in each and every country, committed to free and fair American elections, and they acted accordingly.
To be clear, I am not asking which is true. I am asking which one I am supposed to believe.
That is the topic of my latest Bloomberg column, here is the closing bit:
What kind of bargain is it for the country for the U.S. election to be the object of such global interest? We Americans may be flattered by the attention, but it is not clear that it is such a good thing. For one thing, it gives foreigners a greater incentive to try to manipulate U.S. elections.
Another possible problem is that political coalitions will, over time, be defined globally rather than nationally and locally. Is your presidential candidate attracting support from the wrong factions in France, Germany or South Sudan? On one hand that could be useful information, but it could also prove misleading. Foreigners support U.S. presidential candidates for their own reasons, and it could be distorting to have so many outside parties involved. That’s what happened in the Brexit debates, in which a pro-Brexit position was (and remains) all too quickly identified with populism, anti-globalization and support for Trump. The Brexit debate might have been more sane if it had been more local.
What if, come the next U.S. presidential election, most of the social media debate is among non-Americans? What if much of the world ends up with a common, one-dimensional political spectrum, rather than each country having its own (mostly) independent politics? We may be about to find out.
I’ll say it again: American soft power is rising, not falling.
That is the topic of my latest Bloomberg column, and no I do not mean the politicians. Here is one excerpt:
…the political-science hypothesis of “retrospective voting” took a whacking. Retrospective voting suggests that the electorate evaluates incumbents by recent economic performance and votes accordingly, regardless of whether the incumbents are actually at fault. Yet Trump presided over about 320,000 excess deaths related to Covid-19, as well as huge contractions in GDP and employment. Even if he loses, as now seems likely, those failures didn’t knock him out of the race. A lot of his supporters still seem to have felt he would cope better with matters moving forward.
And to close:
American democracy: Maybe this one is premature, but so far the U.S. has held a closely contested election under pandemic conditions. Turnout was much higher than usual, and so far there hasn’t been much election-related violence. Could it be that the system really works?
And when will the “money in politics” people admit they were wrong?
Here is the audio, video, and transcript. Here is the CWT summary:
She joined Tyler to discuss the reasons Haitian identity and culture will likely persist in America, the vibrant Haitian art scenes, why Haiti has the best food in the Caribbean, how radio is remaining central to Haitian politics, why teaching in Creole would improve Haitian schools, what’s special about the painted tap-taps, how tourism influenced Haitian art, working with Jonathan Demme, how the CDC destroyed the Haitian tourism industry, her perspective on the Black Lives Matter movement, why she writes better at night, the hard lessons of Haiti’s political history, and more.
Here is one excerpt:
COWEN: Now, in all of these conversations, there’s a segment where I present to the guest my favorite Haitian proverbs, and he or she reacts. Are you ready for a few?
DANTICAT: All right. You’ve been sharing Haitian proverbs with your guests?
COWEN: Here’s one. “After the dance, the drum is heavy.”
DANTICAT: Oh my god.
COWEN: What does that mean to you?
DANTICAT: Aprè dans, tanbou lou. I actually have a book called After the Dance. It’s on Carnival. Yes, for me, it means that there are consequences to everything, even the most joyful thing. You have to be prepared for the consequences of things that you’ve done.
It’s something that my mom used to say quite a bit, too. If you have just had a really big celebration, or if you waited too late to do your homework because you’re having a good time watching a program you like, she was like, “Aprè dans, tanbou lou.” After the dance, the drum is heavy. It’s like the morning-after, hangover situation and the most joyful outcome, but really, that there are consequences to everything.
COWEN: Here’s another one. “It is the owner of the body who looks out for the body.”
DANTICAT: Oh, this one. You will not believe how much we hear that these days. Se mèt kò ki veye kò. It’s something that we say a lot now in the coronavirus era. You hear it on the radio. You hear people say it when they talk to their neighbors. Se mèt kò ki veye kò. That means that, really, you are the best person to take care of yourself.
If you’re saying, “Wear your mask when you go out during the coronavirus era.” “Wash your hands.” It’s like the best, the most qualified person to take care of you is you. It’s not the doctor. It’s not your loved one. Se mèt kò ki veye kò. It’s the owner of the body who takes care of the body. It’s like, “Watch out for yourself.” It’s very good advice these days.
COWEN: “When they want to kill a dog, they say it’s crazy.”
DANTICAT: Yes, that’s the dehumanization. I guess that’s fake news. [laughs] It’s connected to the fake news. If you want to diminish or slight someone, you call them names. So that’s also a timely one, I think.
COWEN: How about this one? “The constitution is paper; the bayonet is steel.”
DANTICAT: Yes. Again, back to our conversation about dictatorship, in a way. I believe that one was often cited by one of the generals, actually, during the ’90s, during the coup d’état, or it might have been even before. I think it speaks to the fragility of documents like the constitution. Yesterday was Constitution Day in the US, so that might also apply here.
It’s that whole thing with freedom. Freedom is something that we have to always keep watching out it doesn’t slip away because, sometimes, we think these documents or these rules are set in stone. I think this general who kept saying this was saying, “Well, I have the weapons.” It’s kind of paper, rock scissors. Which is stronger?
COWEN: “When the mapou tree dies, goats would eat its leaves.”
DANTICAT: Yes. This one, I think, is about humility because we have this expression that we say when someone has died who has contributed a great deal to our culture: we say that a mapou has fallen. A mapou is a soft cotton tree, it’s a kind of sacred tree, and it’s also a big tree that lasts forever. It’s a regal institution, a mapou.
What this one is saying, actually, the goat is a meager creature compared to a mapou, and there’s no way a goat would actually be able to access the leaves of a mapou, but when it dies, it falls. I’ve always heard that proverb as a way of encouraging humility, that all our leaves are vulnerable to the goat, if you will. [laughs]
COWEN: One more proverb, “Beyond the mountain is another mountain.”
DANTICAT: Yes. Dèyè mòn gen mòn.
COWEN: That’s a very famous one.
DANTICAT: Yes. I actually use that a lot myself. One of my neighbors just passed away, and she used to use that proverb a lot. I think it means that no matter what, we can see there is more. I think it’s about there’s more to everything than what we see.
It also speaks to the physical layout of Haiti because it’s a very mountainous place. Ayiti. The Arawak called it Ayiti. It actually means land of the mountains, and it’s physically true. If you’re traveling across Haiti, literally, there’s always a mountain physically behind a mountain, but in a spiritual sense, it also means that there’s always more.
Recommended. And I thank Carl-Henri Prophète for assistance with the transcription.
That is the title and theme of my latest Bloomberg column, here is one excerpt:
And who should get the vaccine first? The elderly are more vulnerable, but the young are more likely to spread Covid-19. Some recent results suggest it would be better to vaccinate the young first, but that is less politically likely. Again, it is easy to see potential conflicts over this question, cutting across traditional party lines.
An even more complex problem would arise if one good vaccine is available but other, possibly better, vaccines are imminent. Does everyone get the “good enough” vaccine, disrupting the ability to conduct clinical trials to see if the other vaccines are better? How much patience do Americans have, really?
Americans would probably resent having to wait. But if they end up choosing a lesser quality vaccine, over the long run they might be unhappier yet. It is not clear the U.S. public health bureaucracy is up to the task of approving one vaccine and restructuring the other trials (possibly by paying participants more to stay in, or by shifting to other countries for data) so they can continue.
Be prepared for a mess, with almost everybody unhappy.