Monthly Archive

Although it is now passed, for more than two months California State Senate Republicans blocked the passage of a new state budget, and not for the first time, either. California, like a few other states requires a 2/3rds vote to approve budgets. The supermajority requirement is similar to the supermajority approval requirements I have advocated before for government appointments. I want to give my assessment of why California has this perennial problem, and what it means for the plan I have advocated. Read the rest of this entry »

I’m not a huge fan of Ron Paul the legislator. Sure he favors smaller government, but he also opposes abortion rights, opposes immigration, opposes managed free-trade (which seems like the only way to advance free trade), and supports a return to the gold standard. If I could choose the next president though, I would choose Ron Paul in a heartbeat.

My support comes down to a few issues. Ron Paul is basically the only candidate I trust to protect federalism and civil liberties and not to further expand executive power. Ron Paul would have less say over the issues I disagree with him on as president than he does as a legislator. As a president, Ron Paul would have a lasting positive impact by nominating good judges and limiting the expansion of executive and federal power.

I just found out that Brian Tamanaha, the author of On the Rule of Law: History, Politics, Theory, blogs over at Balkinization. On the Rule of Law is a great introduction to the concept of the rule of law. The book is short (141 pages), but it does a great job explaining the different conceptions of the rule of law and how they developed. I recommend the book to anyone who anyone who is not quite clear on what the rule of law is or why people use it in different ways.

Here is Brian responding to the claim that the morality of atheists should be suspect.

In Democracies, good public policy is largely a public good which is indirectly provided (or not provided) by voters. Because it is a public good, voters do not have strong incentives to be informed or vote intelligently. Good public policy is underprovided because the electorate has biases and because without research and discussion, even great policies may at first appear bad, so it is difficult for many good policies to gain support.

In terms of human computing power, it is not really necessary to have large elections to elect good representatives and officials. A small, but well informed, fraction of the current electorate could conceivably elect good representatives and officials. The reason we do have large electorates is that a small electorate will not necessarily be representative. Having large electorates is a way to ensure that elected bodies represent the interests and perspectives of everyone in the country.

I want to propose a system of professional voting. The system would aim to ensure that voters are informed and thoughtful as well as aim to ensure that everyone’s interests are represented. Essentially, Professional Voting would pay a portion of the electorate to be informed, model what the results of the elections would be if the whole electorate was informed and voted and then use that result as the result of the election. Read the rest of this entry »

I’m going to write a series of posts briefly summarizing the ideas from my intermediate micro textbook, partly for my own benefit and partly to allow others to get a quick introduction to the subject. Read the rest of this entry »

I haven’t been posting all summer due to a heavy load of math classes, but that’s over with (whew!), so I’m back.

Jeff sends me yet another intriguing link. The developer of the computer game Eve Online is employing a phd economist in order to better understand the game’s virtual economy and anticipate the consequences of gameplay tweaks. One big advantage to a simulated economy is that complete information is available on every transaction that occurs. “We watch price bubbles happen in Eve.” Cool.

I have posted a few times on why pork exists, but it turns out my theory was wrong. I recently found this paper (link to non-gated), which shows empirically that politicians do not seek pork because pork directly gets votes. The paper supports the theory that politicians sponsor pork because it gets them financial support (presumably from pork recipients, such as contractors):

I found that money, not pork, is the main resource that sustains politicians’ efforts to maintain their personal-vote support base among voters. Deputies thus do not deliver pork because it provides a direct electoral payoff, they do so in order to gain the financial support of powerful economic interests. The money that comes from pork-barreling then helps them win votes.

Retrospectively, this theory is much more convincing than my theory. While it is difficult for voters to get information about pork spending, it is trivial for specific companies to know about pork directed at them. This theory is also more consistent with altruistic voters.

With this logic, Proportional Representation (PR) may not eliminate pork, as I suggested before, because politicians always have incentives to seek money to help their election. PR might still reduce pork spending for two reasons. First, as I have discussed before, money should have a smaller impact in PR electoral systems than winner-take-all systems. Second, in PR electoral systems, parties compete mostly with other incumbent parties, not outsiders, so the electoral advantage to individual incumbent parties should be a good deal smaller than in winner-take-all systems.

Hugo Chavez is asking for numerous constitutional changes to ”put an end to central bank autonomy, reduce the length of the standard working day, strengthen state expropriation powers and create new types of property managed by co-operatives.”

Whatever Venezuelans think of Hugo Chavez, they must recognize that he is asking for too much power. Someday, a president they don’t like will be elected, and that president will wield the same power that Chavez is now asking for. Surely it is not difficult to imagine a president that wields the power of expropriation or the power to print money indiscriminately for his own personal good, rather than for the good of the people. Venezuelans must place their trust in processes, and not in specific leaders.

A Caltech grad student has created a service that cross references Wikipedia edits with whois information to reveal the owners of the domains where edits came from (article link).

I foresee this becoming directly integrated into Wikipedia. I also think it might become like an alarm; for example, when someone from a McDonald’s owned domain edits a page related to McDonald’s the edit might be flagged for review.

I expect this service to reduce the amount of self-serving editing that goes on. This service will make it more costly to modify pages to your self interest, because 1) self interested edits done from obvious domains will immediately stand out, and o they will probably be undone, and 2) getting caught may generate bad publicity. Cost increase should decrease the number of self-interested edits, and therefore reduce some of Wikipedia’s biases and increase Wikipedia’s trustworthiness. 

A little while ago, I discussed my views on the causes of pork (patronage) spending. Essentially, my view is that patronage spending exists because it provides an electoral advantage to incumbents by creating entry costs for electoral challengers. At the end of my post, I mentioned that I thought that proportionally representative electoral systems (such as Direct Representation) greatly curb patronage spending, but that I wasn’t sure why I thought that. I now have a better idea about why I think that:

Proportionally representative electoral systems curb patronage spending because patronage does not provide an electoral advantage to incumbents in such electoral systems.

First, in proportional representation, representatives always face competition both from other incumbent representatives who appeal to similar but different voter groups as well as from new entrants, because low vote thresholds mean the entry costs to new representatives are low. The absence of rules discouraging patronage spending does not insulate incumbents from either of these sources of competition because the competitors are not at a disadvantage in providing pork, so there are no incentives to oppose such rules, and strong incentives to adopt popular positions, such as advocating rules discouraging patronage spending, remain.

Second, representatives usually draw votes from geographically diffuse constituencies. This has two effects. First, this makes patronage spending relatively inefficient as a way to get votes because the benefits from pork spent in a particular geographic area will go partly to the supporters of the patronage legislation sponsor and partly to the supporters of other representatives. Second, because multiple parties may represent people in the same geographic area, voters have difficulty knowing who is responsible for pork in their area.

I have been looking for empirical evidence for or against this theory. So far, I have found only this paper that makes some similar theoretical arguments and provides a little empirical support.

Norms of behavior reflect valuations that individuals place on actions or strategies in and of themselves, not as they are connected to immediate consequences

From Elinor Ostrom’s Governing the Commons: The Evolution of Institutions for Collective Action. I chose the book from Amazon largely at random because it sounded interesting, but it apparently it is somewhat famous.

Google News gets the small pictures it uses next to story items from different sources than the linked article, so it’s no surprise that the story and picture are sometimes only distantly related, but this is ridiculous:

 This is an e-mail I sent to co-blogger cdfox, who is interested in the book A Farewell to Alms:

Knowledge Problem has a post on it. The book certainly seems to be attracting a lot of attention.

Without having read the book, I have to wonder: if “the cultural values consistent with growth and dynamic capitalism are genetically transmitted”, then doesn’t that imply that the main obstacle to 3rd world development is genetic? Isn’t that at odds with the fact that some 3rd world countries are developing very quickly and that some are not? It seems unlikely that the Chinese population or the Indian population has recently undergone widspread radical genetic changes. I have a large stack of books I need to read, but it looks like I will have to add this one to the pile.

John

P.S. do all my correspondences now read like blog posts?

Like last year, there may not be enough labor to pick all the fruit American farms grow, and the culprit is pretty clear:

From California to Texas to Michigan to New York, farmers blame the tight labor on tougher U.S. immigration measures that have blocked much of the seasonal surge of workers who come north for the harvests.

It’s probably going to get worse, too:

The rules — following failed congressional attempts at immigration reform — call for fines of $10,000 against employers if they keep workers who are using bogus Social Security numbers. Employers have criticized the change, saying they will have more trouble getting and keeping much needed help.

Isn’t it unethical for the U.S. to deny foreign workers the ability to work here, when they benefit so much and American workers lose so little?

The Washington Post has an interesting article on the changing composition of the 4th Circuit Court, which fits in well with the argument I made yesterday that appointments should require a super-majority Senate vote. The article implicitly notes that judges are observed to have strong “liberal” or “conservative” biases which correlate strongly with the ideology of the president who appointed them and that those biases have significant impacts on the precedent setting rulings they make. The 4th Circuit Court in particular, which was conservative but is now even split, has played an important role in the legalities involved in the administration’s “war on terror.” The article points out:

the court has played a key role in terrorism cases since the Sept. 11, 2001, attacks.

[...]

a three-judge panel supported Bush’s detention of “enemy combatant” Yaser Esam Hamdi, a U.S. citizen captured with Taliban soldiers in Afghanistan who, at that point, had not seen a lawyer

The article also shows that I am not the only one who thinks centrist appointments are possible:

Liberal groups said Bush can still shape the 4th Circuit, and they called on him to nominate consensus candidates likely to win Senate approval. 

I also call on the president to nominate consensus candidates. In general, however, if appointments are consistently partisan (which they are) we should focus on changing the rules for appointments instead of focusing on convincing individual appointers. As I argued yesterday, changing the required Senate approval for appointments from a simple majority to a large super-majority would go a long way towards encouraging centrist appointments.

In recent Washington Post opinion piece, Robert Dallek suggested that the U.S. adopt a constitutional amendment providing for a mechanism to recall the president (link). As much as I would like to see President Bush out of the White House, adding a mechanism for removing the president from office is not a good solution to the problem of electing bad presidents in the first place, and would invite further politicization of the executive branch (though I have a hard time imagining exactly how it could get more politicized) by making it difficult for presidents to make unpopular decisions when they are really warrented.

The presidency should not be a political office. The executive’s job is to enforce the laws, not to push for policy. When the judicial branch is perceived to be pushing for policy, it is rightly criticized. People should have the same attitude towards the executive branch. Supreme Court Chief Justice John Roberts recently said, “I’m not there to make judgments based on my personal policy positions.” Executives should hold the same ideal.

Changing the attitude of the executive branch will require some institutional change. I see the political character of the executive branch as a consequence of the winner takes all electoral system. The winner take all system seems necessary for presidential elections, but elections are not the only way to select government officials.

Like the judicial branch, the executive branch could be filled by appointments. Instead of electing a president, the people could elect a Federal Selector, who handles the appointments that the president now handles and appoints the executive. In order to ensure broad approval, the Senate would have to approve appointments to the judicial and executive branches by a super-majority, perhaps as high as 75% in secret ballot vote (to reduce vote trading).

Differing interest groups would recognize that compromise on appointments would be necessary because the super-majority requirement makes getting a truly favorable appointment impossible. Groups which attempted to hold out for appointment candidates who favor their interests would suffer politically and achieve nothing. Interest groups will cease to see appointments as a way to advance policy goals. This mechanism would result in appointees that are uncontroversial (at the time of their appointment), and unlikely to pursue policy changes.

Sen. Arlen Specter has some sensible things to say about immigration. His argument in a nutshell: since an automatic path to citizenship was sticking point of the recent immigration debate, let’s compromise and give current illegal aliens green cards without an automatic path to citizenship. This seems like a very reasonable compromise. He also advises that the point system should wait till another day.

The Washington Post reports that congress has passed the warrentless wiretapping expansion the executive branch had requested:

The bill would give the National Security Agency the right to collect such communications in the future without a warrant. But it goes further than that: It also would allow the interception and recording of electronic communications involving, at least in part, people “reasonably believed to be outside the United States” without a court’s order or oversight.

[...]

Under the administration’s version of the bill, the director of national intelligence and the attorney general can authorize the surveillance of all communications involving foreign targets. Oversight by the Foreign Intelligence Surveillance Court, composed of federal judges whose deliberations are secret, would be limited to examining whether the government’s guidelines for targeting overseas suspects are appropriate. The court would not authorize the surveillance.

I have never understood the conflation of judicial oversight with executive weakness. The ACLU has condemned the Senate for passing the bill.

I have been thinking about the cause of pork spending (patronage). Patronage is fairly widely regarded as bad for the economy, so why does it persist?

The classic explanation is that patronage gives large benefits to a small population, but spreads costs over a wide population; this would make patronage a classic externality. Every citizen has an incentive to vote for a representative who promises pork projects, even though they realize that they are bad for the country as a whole. This has theory two big problems. First, people mostly vote altruistically. Second, this theory predicts that only the majority party should get patronage spending, the minority party should get essentially nothing and should always vote against patronage (a la Buchanan and Tullock). This is clearly not the way patronage works. Read the rest of this entry »

A little while ago, I asked why private property rights have to be publicly provided. The question centers around what type of good private property rights are. I think I have an answer now.

If we consider a person looking to establish property rights, one way to go about it is to promise to respect the property rights of any one who respects that person’s property rights where the two property rights are defined by a formal process (i.e. a voluntary government). In this context, property rights have two important features. First, there are large transaction costs to establishing property rights due to communication costs between people and organization costs. Establishing property rights this way requires that a new participant let other people already in the agreement know that he is part of the agreement. Second, this market has very large network externalities. An agreement between two people to respect each others property rights is near worthless if there are a hundred other people. As more and more people join, the value of the agreement increases. This agreement also requires strong enforcement because there are strong incentives for covert defection (theft).

I think the reason that only a government can provide property rights is that ‘definer of property rights’ is almost the definition of government, but these two aspects of property rights are responsible for many of the general features of governments.

I am sure this question has been answered before, possibly by Institutional Economics, but I could not find an answer on the web, and I would like to formulate my own answer before I go off looking more in-depth.