Category: Political Science

Will China capture the main benefits from Belt and Road?

Maybe not, that is the topic of my latest Bloomberg column.  Here is one excerpt:

I was struck by a recent deal between China and Montenegro that gave China the right to access land in Montenegro as collateral, in case Montenegro does not repay certain loans. This has upset people in Montenegro, and it makes China seem like an imperialist country with territorial designs. But there’s also a more benign interpretation: China is demanding land as collateral because it knows Montenegro is not creditworthy. The loan sent Montenegro’s ratio of debt to gross domestic product to almost 80 percent, from 63 percent in 2012.

To put that in context, let’s say you heard of a loan shark who threatened to break the fingers of borrowers who did not repay. You would sooner infer that was a risky, so-so investment rather than a sure winner.

In essence, China is playing the role of loan shark, and that is not obviously the way to get ahead in today’s world. If China did claim some land in Montenegro as recompense for a bad loan, it might find holding the asset to be more trouble than it’s worth, much as Amazon decided to depart from a deal with New York because of hostility in parts of the city and state governments. If China tried to sell the land, a potential new buyer could never be sure of having enforceable title to the property.

Another problem with Belt and Road, at least from a Chinese point of view, is that China is dealing with many countries that are much smaller in terms of their GDP. There’s a tendency for small countries to renege on deals in hopes that big creditors won’t bother to make an example of them. You might think that smaller countries are easier for China to push around, and there is some truth to that. At the same time, both China and the small countries know that the small countries are not entirely masters of their fates, and so punishment strategies can be counterproductive or occasion more resentment than it is worth. Has the U.S. found it so easy to induce Honduras and Guatemala to stem the flow of migrants toward the border?

And this:

China has proven remarkably poor at supplementing Belt and Road with soft power persuasive techniques using diplomatic and cultural influence. This is no accident, nor does it reflect some kind of stubborn unwillingness of the Chinese to learn to wield soft power tools. Rather, the problem is structural. Since the Chinese government does not derive legitimacy through normal democratic channels, much of its diplomacy and foreign policy have to be channeled to please domestic audiences, whether the citizens or coalitions within the Communist Party. The necessary internal presentation shapes incentives for Chinese foreign policy, and that in turn alienate the other countries China is dealing with.

There is much more at the link.

The new who gives a damn politics

It’s also worth noting that talk is going around DC that the US and China may keep the original $50B in tariffs, but that the Trump Administration has asked the Chinese to move theirs away from targeting the GOP base to less politically sensitive sectors, even proposing alternative industries to the Chinese side.

That is from Bill Bishop, who edits the email newsletter Sinocism, which I find essential and pay real money to read.  Here is additional Bloomberg coverage.

UK fact of the day

Unless Labour and the Conservatives can cobble together a Brexit deal that is supported by parliament, then Britain’s election-weary voters will have their fifth nationwide election in only six years.

That is from Matthew Goodwin in The Times, there is also Matthew’s book National Populism: The Revolt Against Liberal Democracy.  Remember how we used to praise parliamentary systems for their decisiveness?

Solve for the equilibrium

This one concerns China:

A person familiar with the negotiations said Myanmar’s government reached out to the U.S. to request help reviewing the contract [with China] to ensure it didn’t include any hidden traps. This person said other Western countries, including the U.K. and Australia, provided similar assistance.

The negotiations “were very much Burmese-led but armed with the advice of the Americans and others as well. We were able to go to the Chinese [and say], ‘This part is OK, this part is problematic in terms of debt,’” the person said, referring to the country by its previous name.

The Myanmar port deal is part of an economic and diplomatic influence campaign known as the Belt and Road Initiative, a signature effort by Chinese President Xi Jinping to dot the globe with Chinese-funded infrastructure projects.

Here is the full WSJ story by Ben Kesling and Jon Emont.

The evolution of political views

This paper examines the effect of party affiliation on an individual’s political views. To do this, we exploit the party realignment that occurred in the U.S. due to abortion becoming a more prominent and highly partisan issue over time. We show that abortion was not a highly partisan issue in 1982, but a person’s abortion views in 1982 led many to switch parties over time as the two main parties diverged in their stances on this issue. We find that voting for a given political party in 1996, due to the individual’s initial views on abortion in 1982, has a substantial effect on a person’s political, social, and economic attitudes in 1997. These findings are stronger for highly partisan political issues, and are robust to controlling for a host of personal views and characteristics in 1982 and 1997. As individuals realigned their party affiliation in accordance with their initial abortion views, their other political views followed suit.

That is a new paper by Eric D. Gould, and Estaban F. Klor, via the excellent Kevin Lewis.

p.s. don’t call it “tribalism,” that is something else.

When are national apologies a good idea?

That is the topic of my latest Bloomberg column, noting that lately Mexico has been demanding an apology from Spain for colonialism.  Here is one bit:

Some features of good apologies are sincerity, overall compatibility with what the apologizer now stands for in other contexts, and a broad social willingness to accept that something indeed has been settled for the better.

And:

OK, so how about Spain and Mexico? I am skeptical of this proposed apology, partly because it seems like a political maneuver by President Andrés Manuel López Obrador to garner political support and distract from his likely failure to successfully reform Mexico’s economy. The current Spanish government also is not a close descendant of the conquistadors, as it is a full-blown democracy and the conquest was almost 500 years ago. One can acknowledge the massive injustices of the history without thinking that current Spanish citizens necessarily should feel so guilty. And (until recently) Spain-Mexico relations have not been problematic, so it is not clear exactly what problem this apology is supposed to solve.

The current demand for an apology is a distraction from the enduring injustice of Mexico’s segregation. If Spaniards found their own reasons for wishing to apologize, that would be a good result. But on this demand, they are correct to give it a pass.

I also consider the United States, Australia, New Zealand, and Rwanda.

Immigration Status, Immigrant Family Ties, and Support for the Democratic Party

That is a newly published piece by George Hawley, Social Science Quarterly, not yet available on-line as far as I can find:

I test the hypothesis that immigration status itself is a predictor of Democratic Party affiliation and vote choice, even controlling for other attributes. I further test whether having immigrant parents and grandparents has a similar effect. Method.To examine these questions, I created single- and multilevel models of party affiliation and vote choice using the 2016 Cooperative Congressional Election Study. Results. Even after controlling for a myriad of individual and contextual attributes, immigration status was a statistically significant and substantively important predictor of Democratic affiliation. This was also true of the children and grandchildren of immigrants, but this effect weakened over multiple generations. Conclusion. Immigration status itself appears to be an important determinant of voting patterns, which is highly consequential, given the large and growing foreign-born population in the United States.

Perhaps this explains some small part of American politics in recent times.

For the pointer I thank D.

Perceptions of crony capitalism

This paper discusses a national survey of business leaders that sought to deter-mine how government favoritism toward particular firms correlates with attitudes about government, the market, and selectively favorable economic policy. Findings indicate that those individuals who believe they work for favored firms are more likely to approve of free markets in the abstract but also more likely to say the US market is currently too free. These individuals are more skeptical of competition and more inclined to approve of government intervention in markets. They also are more likely to approve of government favoritism and to believe that favoritism is compatible with a free market. Those who have direct experience with economic favoritism or are more attuned to such favoritism are more likely to have distorted perceptions of free- market capitalism and are more comfortable with further favoritism.

That is the abstract of a new Mercatus working paper, by Matthew D. Mitchell, with Scott Eastman and Tamara Winter.

My Conversation with Emily Wilson

She is a classics scholar and the translator of my favorite edition of Homer’s Odyssey, here is the audio and transcript.  Here is part of the CWT summary:

She and Tyler discuss these [translation] questions and more, including why Silicon Valley loves Stoicism, whether Plato made Socrates sound smarter than he was, the future of classics education, the effect of AI on translation, how to make academia more friendly to women, whether she’d choose to ‘overlive’, and the importance of having a big Ikea desk and a huge orange cat.

Here is one excerpt:

COWEN: Let’s jump right in on the Odyssey. I want you to explain the whole book to me, but let’s start small. Does Odysseus even want to return home?

WILSON: [laughs] He does as the poem starts. As the poem starts, he spent the last seven years on the island of a goddess called Calypso, originally, the poem implies, quite willingly. So, it seems as if he’s changed his mind about whether or not he wants to go home. But as the poem begins, he does want to get back home to Ithaca, to his wife, Penelope, and his son, Telemachus.

COWEN: Do you think he means it? Or is he just self-deceiving? Because he takes the detour into the underworld. He hangs around with Circe for many years. There’s a contrast with Menelaus, who acts as if he actually does want to get home. Who’s lying to whom in this story?

WILSON: Odysseus, of course, is lying all the time, so it’s very hard for the reader to get a firm grasp on what are his motives. Also, when he tells Calypso that he desperately wants to get back home, it’s very striking to me that he doesn’t give his motives. He says to Calypso, “You’re much more beautiful than my wife is, and you’ve promised to make me immortal. It’s a great offer, but I want to go home.” He doesn’t explain what is it that drives that desire to go home.

And you’re quite right: he makes many detours. He spends another year, quite willingly, with Circe, another goddess. So it seems as if he’s easily distractible from the quest, for sure.

And:

COWEN: Should we consider electing politicians by lot today? Is it such a crazy idea?

WILSON: I think it’s a great idea.

COWEN: Great idea?

WILSON: Yes, yeah.

And:

COWEN: Now, you have another well-known book. It’s called Seneca: A Life. On reading it, this is my reaction: why are the Stoics so hypocritical? Seneca spends his life sucking up to power. He’s very well off, extremely political, and possibly involved in murder plots, right?

WILSON: [laughs] Yes, that’s right. Yes.

COWEN: What is there about Stoicism? Marcus Aurelius is somewhat bloodthirsty, it seems. So, are the Stoics all just hypocrites, and they wrote this to cover over their wrongdoings? Or how should we think about the actual history of Stoicism?

WILSON: I see Seneca and Marcus Aurelius as very, very different characters. Marcus Aurelius was militaristic, bloodthirsty, and an expander of the Roman Empire. He was happy to slaughter many barbarians. He was fairly consistent about thinking that was a good idea, and also fairly consistent in associating his dream of culture and military imperialism with Stoic models of virtue.

Whereas Seneca was very much constantly unable to fully act out the ideals that he had. One of the reasons he’s so interesting as a writer is that he’s so precise in articulating what it means to have a very, very clear vision of the good life and to be completely unable to follow through on living the good life.

COWEN: But why would you accumulate so much wealth if you’re a true Stoic?

You can buy Emily’s translation of Homer here, and she is now working on doing The Iliad as well.

Why do states privatize their prisons?

Why Do States Privatize their Prisons? The Unintended Consequences of Inmate Litigation.” (Job market paper).
The United States has witnessed privatization of a variety of government functions over the last three decades. Media and politicians often attribute the decision to privatize to ideological commitments to small government and fiscal pressure. These claims are particularly notable in the context of prison privatization, where states and the federal government have employed private companies to operate and manage private correctional facilities. I argue state prison privatization is not a function of simple ideological or economic considerations. Rather, prison privatization has been a (potentially unintended) consequence of the administrative and legal costs associated with litigation brought by prisoners. I assemble an original database of prison privatization in the US and demonstrate that the privatization of prisons is best predicted by the legal pressure on state corrections systems, rather than the ideological orientation of a state government. PDF of most recent version here, comments welcome.​ Appendix here.

Do Private Prison Companies Suffer When Inmates Win Lawsuits? The central claim of my dissertation argues it is the advent of inmates’ rights and rising prisoner litigation that contributed to the rise of prison privatization in the state. A separate dissertation chapter considers this relationship from the viewpoint of the business: is it the case that the economic future of the company is vulnerable to the announcement of successful court orders? I use event study methodology and find I find that on aggregate, investors are not particularly concerned with these judicial decrees. Rather, investors respond to the lawsuits in those states that are the most consequential for private prison firms’ business. This chapter fleshes out the behavior of private prison companies and provides further empirical evidence for the central claim of the dissertation, that private prison firms are indeed vulnerable to the announcement of court orders.

Those are new papers by Anna Gunderson, Ph.D candidate in political science from Emory, starting at Louisiana State, and I note she just won the Elinor and Vincent Ostrom award from the Public Choice Society.  Here is her home page.

Ross Douthat on some reasons for the electoral college

Is there a case for a system that sometimes produces undemocratic outcomes? I think so, on two grounds. First, it creates incentives for political parties and candidates to seek supermajorities rather than just playing for 50.1 percent, because the latter play is a losing one more often than in a popular-vote presidential system.

Second, it creates incentives for political parties to try to break regional blocs controlled by the opposition, rather than just maximizing turnout in their own areas, because you win the presidency consistently only as a party of multiple regions and you can crack a rival party’s narrow majority by flipping a few states.

According to this — admittedly contrarian — theory, the fact that the Electoral College produces chaotic or undemocratic outcomes in moments of ideological or regional polarization is actually a helpful thing, insofar as it drives politicians and political hacks (by nature not the most creative types) to think bigger than regional blocs and 51 percent majorities.

That is from the NYT, he also considers some arguments against.

Sentences to ponder

Oregon lawmakers are considering raising their annual pay by nearly $20,000, a move the sponsors say will attract more diverse candidates to the statehouse.

“We’re a diverse state, we need a diverse legislature,” Senate Majority Leader Ginny Burdick, one of the legislators leading the effort, told Oregon Public Broadcasting. “Because of the low pay, we are automatically screening out people who really should be represented here.”

That may sound cynical, but in fact the case for doing this is not crazy, and in general the U.S. underpays many (not all!) of its public sector employees:

The move comes only a few weeks after a 28 percent legislative pay raise went into effect. Lawmakers were not behind that raise, and the increase was tied to collective bargaining agreements that affected nearly 40,000 state employees.

Legislators now make $31,200, plus an extra $149 a day when the Legislature is in session.

Here is the full story, with further detail of interest, and for the pointer I thank Mark West.

*The People Next Door*

The author is T.C.A. Raghavan and the subtitle is The Curious History of India’s Relations with Pakistan.  Here is one excerpt:

The massive rigging of the March 1977 election led to a Bhutto majority the size of which stunned even his supporters and, by some accounts, even embarrassed him.  He and his party had been expected to win but the near-total decimation of the opposition made the election results lose credibility.  “Why did you do this to me?” he is widely believed to have rhetorically asked a group of senior civil servants as the results came in.  In any event, the loss of popularity and personal legitimacy was swift.

This book is must reading for these days, and it will be making my 2019 “best of the year” list.  Order from abroad here, or in the U.S. it comes out in July.