The Iraqi Elections: Proportional Representation

On the eve of Iraqi’s election on January 30, 2005, it would be useful to talk about their electoral process, described briefly in CNN’s overview of the event. The main goal of the elections is to choose a national assembly consisting of approximately 275 members. The assembly’s central purpose is to “debate and approve a new constitution” to overcome the oppression faced under the Saddam’s rule, and to move towards a democratic society. The voting system involves a “single, national ballot, without constituencies,” where voters are expected to vote for a party (and the party’s list of candidates) or a group of parties. The seats are distributed through list proportional representation, in which the amount of seats a party obtains is proportional to that party’s overall share of the national vote. So, in other words, the more a party garners votes, the more power and seats that party will attain in the national assembly. For example, if a party gets 40% of the national vote, then that party would get 40% of the seats in the assembly, or 110 of the possible 275 seats. The party would then assign the 110 seats to its top 110 candidates from its list (which is ordered). Proportional representation has its share of advantages and disadvantages. First, it would give smaller parties and independents a chance to take part in the construction of Iraq’s constitution, meaning that every group has a voice, which is what democracy is all about. Second, it uses ordering information when making a list of party candidates, even though the voter casts his ballot for a party, not a candidate. Third, voter turnout would be exceptionally high, since many voters may vote to get a certain candidate elected. Since there are thousands of candidates listed, there is a greater chance of one of them having some kind of connection with voters (i.e. they may be friends or have come from the same region). Fourth, because there are so many parties and so many candidates, it would be nearly impossible to acquire information on all of them, so rationally ignorant voting would occur. Fifth, strategic behavior would not be minimized. For example, a party could list a candidate that is very popular amongst Iraqis to acquire more votes, thus gaining more seats in the assembly. Sixth, the outcome is not Condorcet efficient, since no true winner is determined. Finally, there is a greater possibility for an extremist group to be voted into the assembly, which may disrupt national unity. http://www.cnn.com/2004/WORLD/meast/11/21/iraq.election.reut/index.html

Basics of Interest Group Influence/Behavior and van Winden's Conclusions

In class recently we talked discussed Becker’s piece Public Policies, Pressure Groups and Dead Weight Costs. This piece mainly discussed the political budget constraint (the interaction between taxes and subsidies), the relationship between size and effectiveness of pressure groups, deadweight costs of taxes, and incentives of interest groups (to try to bar entry from their subsidies as much as possible). In class we touched a little bit on the ways in which groups exert pressure but not much. This is the focus of the piece I read by Frans van Winden called Interest Group Behavior and Influence. I liked it because laid out plainly the ways in which interest groups may attempt to influence public policy. Van Winden broke influence down into two main categories. The first manner of influence he simply calls “influence functions” and they refer to the “direct” influencing of policy makers to affect policy. Van Winden describes this first interaction as an “all-pay” auction, where a policy maker lays out a set of possible policies and the interest groups represent the “demand” for the possible options. Van Winden makes the important note here that much literature concludes that “resources spent by these interest groups entail a pure social cost”, because “their activity has no productive aspect”. Van Winden also notes, as we have learned in class, that Becker said such inefficiencies are taken into account when making the decision (a more positive outlook). At this point Van Winden makes a very interesting point, first noting Becker’s conclusion that all interest groups and society would be better off with reduced expenditures on policy influence, and then posing the contradiction “since the influence of expenditures (pressure) is assumed but not explained, it is not clear why policymakers would behave this way”. So he is questioning the incentives behind “public” policymakers as to why they allow such activity. Maybe to explain this we have to take into account the policymaker’s utility function and assume that such a person would have a degree of “selfishness”. Maybe they do take it into account and allowing such competition nets the largest gains to society. I would be inclined to think a policymaker has selfish incentives in interest group competition and can justify the competition by saying it yields the best results for society (when in fact it may not). The second manner of influence he calls “vote functions” and this refers to the indirect affecting of policy by influencing the behavior of voters. He notes two types of models exchange models, in which a campaign contribution is designed to obtain a beneficial policy, and support models, in which the groups may associate contributions positively with electoral success. He notes some important conclusions here: 1) That groups will contribute to favored candidates only, 2) That the more beneficial the policy (to the group) the higher the contribution will be (this follows with marginal costs = marginal benefits), 3) no contributions will be made by a group if the candidates have identical platforms and 4) contributions will be higher the sooner the election. Here, van Winden got a little over my head but an important conclusion of his was that “existing models typically assume a level of rationality which seems unrealistic”. He also believes that “the impact of emotions and feelings” is neglected as well. He essentially states that people are more "myopic" and focused on the present than we assume and finally that the subject of emotions may explain quite simply that interest groups may rally around a policymaker or that policymakers may care about a certain group enough that he/or she does not need compensations to act.

Formation of the Iraqi Bureaucracy

I came across an article dealing with top-level Iraqi bureaucrats meeting with some of their U.S. counterparts. It is interesting to think about how the Iraqi institutions will develop if and when stability is reached in the conflicted nation. For so long, these men and women have had to deal with “changing whims of the ruler had the force of law.” Now they will have the chance to deal with freedom and open market conditions. One trade ministry head said it best—“For example, dealing in foreign currency: One day it's a crime where they cut your hand or your ear for it, and the next day it was perfectly legal.” Such dramatic change is an obstacle that will face the developing nation. We have been talking about the autonomy of the bureaucracy and the relationships between the voters-->regulators-->bureaucrats. Iraq is in the unique position to use its valuable resources of oil and labor to grow into a prosperous nation. The many factions within the Iraqi society and the influx of terrorist activity are the only things standing in the way of such prosperity. The voters will have some distrust in the government due to the polarizing religious views. The regulators will have the same problem. The bureaucrats, on the other hand, will be run relatively in the dark to the Iraqi public. The American public and politicians do not know much about the doings of our own bureaus, so how will a nation with few sources of information be able to know what their officials are doing? The hope is that the Iraqi bureaucrats realize the potential for Iraqi growth by not becoming corrupt and capitalizing on this opportunity of freedom. If this becomes a problem, the Iraqi government will need to implement the oversight committees and an incentive system that has made the U.S. system effective.

Gay Marriage Amendments and Voting Models

Throughout this fall’s election season, I’ve found the role of gay marriage in the election extremely interesting. On Election Day, 11 states, including key swing states like Ohio, Michigan, and Oregon, voted on state constitutional amendments to define marriage as a union between a man and a woman. All eleven amendments passed, most with fairly large margins. Most of the media attention to this issue has been devoted to how these ballot questions increased turnout of conservative voters and, as such, may have led to President Bush’s victory (http://www.foxnews.com/story/0,2933,137319,00.html, http://www.keepmedia.com/ShowItemDetails.do?ema_id=84095&item_id=640397&oliID=176), but what is also interesting for the purposes of public choice is why this particular issue is one that rallies so many voters and arguably greatly increases voter turnout.

While there has been some discussion about just how high voter turnout was, it is generally accepted by analysts and pundits that it was noticeably higher than most previous elections, which means that something about this year’s voting menu made people go out and vote. In a variety of polls, voters have stated that morality and values were major influences on their voting decisions this year, and some have even stated explicitly that they went to the polls to vote on the issue of gay marriage. In thinking about the decisions that these voters made, I found two topics from class discussion applicable and interesting to consider – cost-benefit analysis and minimax regret.

In terms of costs and benefits, it appears that more voters’ personal cost-benefit analyses than in previous years led them to the conclusion that the benefits of voting in this election outweighed the costs. It hasn’t really gotten easier to actually vote since the last election, so the change is most likely to have occurred on the benefit side of the analysis. Due to the admitted role that morals and opposition to gay marriage played in voters’ decisions to vote, it’s pretty easy to look at gay marriage amendments as a major influence on the benefit side of the analysis and therefore a motivator for voter turnout. Voters appear to value the perceived morality of government policies and losing this morality would be extremely detrimental to their utility. It seems that many voters consider gay marriage to undermine their moral positions, so preventing it from occurring would provide them with a tremendous benefit, a benefit that appears to have, for many, outweighed the costs of voting.

As far as minimax regret voting decisions, this issue may have been of such great importance to many voters, most likely because of its perceived moral implications, that they were determined to vote on the matter no matter what the likelihood that they would influence the outcome. In this model, being the one who didn’t vote and then seeing the measure fail would have caused these voters such great regret that they were motivated to vote. In most cases, this would seem like a slightly less reasonable assessment, but due to the importance of morals in this election, it seems more reasonable to apply minimax regret these voting decisions.

Finally, returning to the issue that has received so much media attention – is it problematic that political strategists seem to have added a new tactic to their campaigns and elections repertoire? In the past, the race to the middle and the median voter theory seem to have dominated the strategies of major candidates, but could this new use of provocative ballot questions move us toward a strategy of rigging ballot questions to attract extremists whose voter participation is motivated entirely by one issue?

Voter Preferences?

I read a recent article on cnn.com that talked about voter preferences for people at the polls this fall. The article can be found here, by clicking the link. The article talked about the fact that when faced with important issues in voting this year, voters were more likely to vote for their "moral values" if it was listed and more likely to vote for other issues if that topic was not listed. Depending on who came up with the ballots and format, voters were indirectly swayed to vote for specific issues based on its listing. "When "moral values" was included in poll questions, it was named more often than any other issue. But when voters were just asked to name the issue most important in their vote for president -- without being given a list of answers -- moral values trailed the war in Iraq and the economy, according to the Pew survey." In other words, when given a list for voters to view, most voted for "moral values" as a top priority rather than the other choices given. But when lists were not given and voters were just asked what their top priorities were, they stated other issues, such as the War on Terror and the economy. While the Bush campaign drove voter preferences by including moral values as one of its issues, it was not the campaign's main focal point. "Moral values was an element in the Bush formula, but probably not the driving one," said Lee Miringoff, president of the National Council of Public Polls." I found this article interesting and having to do with public choice because voter preferences were not necessarily reflected in the way people ranked their top priority issues in the polls. Rather, voters ranked their issues depending on the format of the statement: listing the issues or asking an open-ended question. This also could bring up the question of who came up with the format for the voters to answer these questions and which side of the fence were they on? Did they not give a list of choices knowing the voters would state the War and the economy as their top choice? Or, did they give a list knowing that moral values would be selected? These are just a few questions to consider. It becomes quite evident that voting format has a lot to do with the way people vote and are swayed to vote for specific issues. article address: http://www.cnn.com/2004/ALLPOLITICS/11/12/voters.moralvalues.ap/index.html

Toy Recalls and Public Choice

"Every industry or occupation that has enough political power to utilize the state will seek to control entry." -George j. Stigler, Theory of Regulation CNN.com recently reported that the Consumer Product Safety Commission has released its top ten toy recalls, coinciding with the annual holiday gift-buying spree. The list affects such toy giants as Hasbro (Nerf) and Mattel. Even Allen Iverson's toddler shoes produced by Reebok are being recalled for chocking hazards (ironically, Iverson is not the Answer for your infant's shoe needs). How would Stigler understand such bureaucratic action? At first glance, such safety regulation would seem incompatible with Stigler's analysis. After all, he writes, "Regulation is acquired by the industry and is designed and operated primarily for its benefit." Why would the toy industry want their toys recalled? How can we understand recalls through the public choice microscope? The answer lies in barrier entries and marketing. First, by creating such high standards for production, established toy producers raise the fixed costs of producing toys, therefore increasing the costs it takes to break into the toy market. Established firms already understand the correct ways to produce safe toys, having dealt with the regulations since they were first constructed. In this light, it is odd to see toy giant Mattel on the recall list, but let's remember that Mattel produces hundreds of toys a year; one recall has to be expected. Not all toy lines will meet standards, especially when a "rigid plastic" is considered unsafe. In summation, high safety standards deter potential toy producers, erecting an entry barrier. Secondly, high standards produce marketing ability. Those firms who are publicly recalled get bad press, which implicitly implies good press for those firms not recalled. Negative effects on a firm are not sought through regulation, but firms may seek regulation to produce negative effects on competitors or possible competitors. Another way to view this regulation is from the opposite side, not from the firm's lense but from the bureau's. By publicly announcing recalls, the Consumer Product Safety Commission proves to their funder (Congress) that they are producing their output (safety) and therefore deserve their budget. Somewhere, Weingast and Moran are smiling. -Brett Jerasa

Intelligence Overhaul

Recently, there have been a few articles concerning how GOP memebers of the house blocked a vote on the intelligence bill that detailed the recommendations from the 9/11 commission. Here is an article from CNN and one from the NY Times about the issue. The topic relates pretty closely to our discussions in class about whether agencies are autonomous or not. One noteworthy point was a quote from Speaker of the House, Dennis Hastert: "When it comes to a question of the safety of our troops, I don't think we should have any question at all. For our members to move a piece of legislation, they have to have confidence that we do no harm, that we actually make sure that our troops are safe." His statement was about how parts of the legislation were not defined well enough. The apparent desire to have an in-depth understanding of the workings of the bill seems to be one example that supports the Congressional Dominance approach. Although Congress does not seem to have an in-depth knowledge of the issues in general, when they are not pleased with the end results, they do get more involved to regulate agencies. Likewise, the possibility of creating a director to oversee all the intelligence agencies fits into a similar scheme, where Congress maintains the ability to control agencies, but only acts to enforce regulations when they need to. In this case, Hastert's opinion actually protected the status quo for the moment (i.e. not advocating additional regulations yet), however it is clear that overall there has been a shift towards more closely scrutinizing what the intelligence agencies have been doing.

Another interesting quote was from Thomas H. Kean, chairman of the 9/11 commission: "I think there's no question that there are people in the Pentagon who want the status quo, and they fought very hard with their allies in Congress for the status quo." In context, Pentagon officials were acting to protect their power and budget, which follows the model of agent's self-interest we've seen. However, in this case the officials were acting more like an interest group affecting policy decisions instead of agents trying to maximize their budget. Assuming Kean is right about Pentagon employees working to enact a decision, it presents a means for agencies to have a degree of autonomy not really explored in the models. An action like this would be somewhat similar to an entry barrier (at least on the senior bureaucrat level, as a director to oversee all the intelligence agencies has been proposed). Assuming the agencies are actually inefficient, such a behavior is like the rent-seeking activities we have studied.

Overall, the topic is pretty interesting, as it is a current example of agency regulation, with interesting variations from the models we've been studying.

NYC Olympic Bid: Market Inefficiencies and Governmental Action

With the approval of the building of a new stadium in the West Side of Manhattan, to the designing of an Olympic village, to the recent release of the formal 2012 Olympic Bid, its been tough to not see any coverage of the NYC Olympic bid if you ever travel to any sports related website, from espn.com to CPSsportsline.com to cnnsi.com there have been sporadic article involving one issue or another since July. A New York Times article discussing some of it can be seen here: http://www.westsidestadium.com/content/newsarchives/nyt111804.htm . What is interesting about this, is that the government of NYC is deeply involved in it, and looking at the issues gives a good understanding of two of the market inefficiencies under-provision of public goods and positive externalities, we discussed in class, and the possible appropriateness of government or collective action in such cases. Firstly we can look at the idea of the Olympics as a whole as a public good. As a whole it is non-rivalrous. The more people involved in the Olympic experience, it doesn’t mean there is less enjoyment. As far as exclusion, you can easily exclude individual events, but the Olympics as a whole aren’t really exclusionary. Especially in a place like New York. The whole city becomes part of the experience and its not all that feasible to exclude. Thus there is reason that Bloomberg might force collective action by paying for the Olympics with tax everyone’s tax dollars. If, however, you buy into the theory of clubs and the lighthouse idea, and presume that you could sufficiently exclude the Olympics, and suppose someone had enough capital to privately fund the Olympics. Why then, might the government take action, as it is doing, to try to attract the Olympics? There are a number of externalities involved with the Olympics. It attracts huge tourism, now and after the Olympics, there are many jobs involved with it, it allows for new buildings to be made, new construction, it gives a good image for the city, and many intangibles. Presuming it outweighs the negative externalities (traffic, businesses shut down, etc.) the Olympics might be underprovided. We can’t rely on the Coase theorem to solve this problem, with the huge amount of varied people in NYC, so the government steps in, to ensure the optimal amount of Olympics are provided, that’s why they spend the tax payers money to get it. Now, we can look at some of the specific parts of the Olympic bid to see the market inefficiencies, and the reason for governmental collective action. The first can be seen in the first article here: http://www.velonews.com/news/fea/7185.0.html . The City is spending 21 million dollars to turn an old landfill into a park w/over 50 miles of biking and running trails and over 2000 acres of park. Why? Well, Buchanan and Coase would say unnecessarily, since exclusion would be easy. But it is definitely, to a large degree, a public good. It benefits the whole city, yet a free rider problem (and the fact that it would be there for more than a million residents, certainly would cause problems as well) lead the city to feel it must force collective action. On top of this, it would be the mountain bike and equestrian venues for the Olympics, which we’ve already discussed as a possible public good. So the city uses this reasoning to take action. An even larger expenditure by the city, involves the partial funding of a Stadium, seen here: http://sports.yahoo.com/nfl/news?slug=citadel-2_314839_65&prov=citadel&type=story . The city would contribute some 300 million to the building of a Stadium, in Manhattan, that would be used by the Jets and the Olympics if they got it. When including the necessary building of a subway as well as some related office buildings, the city would be paying more than 1 billion dollars in the whole project. Clearly, as seen by the number of privately funded stadiums, this isn’t an issue of Public Goods. Why then, is the government getting involved. There are major externalities and the size of the city make the Coase theorem obsolete. Because it would easier for a private person to make the stadium in Queens (thus under-producing in Manhattan w/0). Because of the jobs, the new construction, the tourism attracted by the stadium’s events, and mainly the use of it to attract the Olympics, there are many benefits that all external to the people producing and consuming the stadium. Thus, whether its right or not, Mayor Bloomberg feels he must use tax payer money to make sure the market is efficiently allocated. I’m dragging on here, so I’ll wrap it up. I guess my point is that public choice is applicable to everything around us. Not just things seen on the Wall Street Journal or CNN but the sports pages, or anything else (like “Public Enemies” that he mentioned in class today).

Environmental Regulations

I chose this article because it touched on a couple of the topics that we have already discussed. http://www.cato.org/pubs/regulation/reg19n4b.html. This article, by Jonathan H. Adler, focuses on the role of environmental policies on economic actions. "One should not be surprised that economic interests lobby, litigate, and make alliances with "public interest" organizations to ensure favorable treatment for their own interests and to utilize environmental regulations to transfer wealth." - Firms use the enviroment as their transfer of wealth in order to "rent seek". However, the returns that the enviromental firms are looking for, is in the form of regulation. The article goes on to talk about how, all though regulations for the environment often seem to be in the publics interest, there are often times different motivations behind these regulations. The article explains that both the legislature and the bureaucrats are implimenting regulations that will help the public but on a side note benefit issues that are most important to them (there are plenty of specific examples in the article). "For years many academics have suggested that regulatory policies are more the result of interest-group manipulation than dispassionate consideration of the public interest. " - This articles also clearly explains the need for rents seeking and justifies it as the "only legal way to predation" and that in the envirnmental industry it is the only way to recieve the regulations that they are looking for. Adler claims that since regulations are here to stay, why shouldn't environmental firms rent seek, because often times these regulations benefit the larger plants, so the smaller ones need to find a way to keep from getting weeded out. However, when the rent seeking involves the environment, the result is different than in most cases. No matter who is doing the rent seeking, public interest or regulated firms, everyone benefits from less pollution and a regulated industry. "In fact, by their very nature, environmental regulations are conducive to rent seeking, for in the environmental context, both regulated firms and "public interest" representatives stand to gain from reductions in output and the creation of barriers to entry." So whether or not the regulation is in the interest of the public, it benefits the plant/firm regarless. The article goes on to apply the argument of using environmental policies for private interest in a number of past examples, such as the Clean Air Act of 1977 and Bush's term. Adler claims that these underlying incentives makes envirnmental politics "as polluted as the rest." This artcle touches on both Stigler and Peltzman topics. Although legislature may claim that the regulations are in the publics best interest, in environment issues, firms go looking for regulation, they want entry barriers to be created. If a coal factor offers to lower admissions in return for a form of regulation that will benefit the coal industry, then the legislature truly will never object because both the reduction in admissions and the entry barrier are going to benefit everyone. Usually there are external cost or one group gets all the benefits while everyone else reeps the costs, however when there are regulations put into place for the envirnment, the benefits are not limited to a single firm. Peltzman said that we only get regulation where we want it, and the environment is definately an area where we want regulation. However, i am not really sure who holds the power in this instence because large firms offer "transfers" that a legilature won't want to turn down in return for a regulation that is only going to give them more power. The legislature won't turn them down because we assume they are vote maximizers and since the envornment effects everyone, the 2 groups (benefit & taxed) are blurred and the legislature is paid in votes by both groups. The regulation, though not initially in the publics best interest, will benefit the public as well. However,in the situation of the environment, the rentseeking can go either way, the firms want regulations from the government and the government is willing to compromise in return for something else. Although the environment is clearly a public good, the government definately needs to step in an regulate as the envirnment has become a tool being used to impliment private interest issues. Except if the government can also benefit from some of these individual incentives, then it isn't completely regulated to fit the publics interest. As we have been talking about the principal-agent issues, it makes me wonder which part of the actual funds that have gone towards cleaning the envirnment was truly for the publics interest. The article stated that 2% of the GDP goes towads the environment, however it is difficult to determain exactly the effect of funding to the envirnment. Enjoy the aricle!!

THE CENTER FLEXES ITS MUSCLES

I had last month’s Wired laying around so I thought id pick it up and see if there was anything blog-worthy. I found THIS ARTICLE on Gov. Arnold Schwarzenegger (smirk, even laugh if you want to) particularly interesting when I began thinking about what the Governator has done in California and how it relates to the median voter theorem. The author, Jill Stewart, calls the action hero “The New American Idol,” and sees Arnold as the future of American politics, calling him “. . . socially liberal and economically conservative . . .a political hybrid who can't easily be labeled, categorized, or dismissed as a conventional hack. . . acts in ways that most politicians, beholden to moneyed interests, can only dream of . . ..” The fact that he is an outsider without any significant party affiliation is a testament to his legitimacy as a sincere individual who will pursue the interests of the people before himself. It seems as if his lack of a vested interest in the office makes him a more ideal politician, willing to listen to and respect all the people he represents. Most political analysts, democrat and republican, agree with Stewart that “. . .a funny thing happened on the way to California once again being the butt of late-night TV jokes: Schwarzenegger has turned out to be a surprisingly effective governor.” Eradicating gerrymandering, balancing the budget, letting the courts and people decide gay-marriage, stem-cell research, and a wide range of other issues for themselves, and being pro-environment, pro-choice, and laissez-fair with business are all positions that resonate well with many Americans, placing Schwarzenegger in a very comfortable and influential position. Arnold believes, and I agree, that bipartisanism proves to be more effective when someone has to represent millions of people with widely varying views and beliefs. As Farah pointed out in her blog, the concept of a party moving towards the center in order to capture the median voter should be carefully examined before it is carried out because of a resulting intersection of positions leading to voter indifference, alienation, and abstention. Politicians play a dangerous, some would say dishonest, game when they try to appeal to as much of the center as possible while retaining their extreme left or right core constituents (not to mention funders). Supposedly the candidate who captures the median voter is the victor, and one of the main concerns of a party moving towards the center is loosing those far-left or far-right votes that would cancel out those gained by the move. Now a candidate like Schwarzenegger, whose stance on a range of issues seems to place him smack in middle with a reach extending close to the centers of the left and right, appears to me to be unstoppable (insert your favorite terminator/action star joke here). Although a run at the White House isn’t in the cards unless the constitution is amended, the implications his success and support have on a national level are considerable. Will “the Schwarzenegger model” become the rubric of success for financially viable, loosely tied, political outsiders with genuine intentions, moderate views, and a desire for a seat at the table? If so, can these candidates manage to alienate the far-left and right, capture the median voter, and bring along enough moderates from both parties to get elected? Following that logic a little further, this would then mean it is possible that the left and right extremes would no longer be necessary to appeal to in an election, as their voting would be largely unpredictable and inconsequential. On the other hand, if two center-based candidates were vying for office, it would seem that whoever could capture the far-left or right vote would win. What does this mean for the no longer coveted median voter and the median voter theorem itself? There could be a tremendous impact on the balance of power as well as foreign and domestic policies. If the steam of this less corporately funded, socially liberal, fiscally conservative movement picks up, is there also the potential for a move toward a three party system composed of center-based (libertarians??), far-left-based, and far-right-based parties? This would change the way the US Government operates. The re-election of George W. Bush left a sour taste in the mouths of roughly fifty-three million people; perhaps the country is in for an identity check that will unite the center at the expense of the extremes. What do you think?

French President Accuses British PM of Violating Assumptions of Public Choice

Well… not quite, but according to this BBC report from yesterday, just before the war in Iraq, French President Jacques Chirac told British Prime Minister Tony Blair that he did not think that Blair and the U.K. had seen their support for U.S. policies and actions in the Middle East returned in-kind. Specifically, Mr. Chirac noted, "'Your position [on Middle East policy] should at least have some use,” and, “You absolutely have to obtain something in exchange for your support.” The British premier doesn’t seem to see things quite the same way: “Tony Blair's spokesman said the remarks were unsurprising but the prime minister did not see relations with the US in terms of ‘pay back’.” I think this brings some interesting challenges and questions to our assumption that politicians are rationally self-interested, with a large part of their utility found in keeping their job. That is, vote-maximizing. One position could be that Tony Blair believes that his policies will prove worthy and eventually garner the greatest number of votes. However, I think it is at least worth considering that politicians derive some form of utility from creating and enacting policies that work (in their eyes, at least). I would venture to guess that in reality this situation features a bit of both. Blair believes this supporting U.S. action is in the best interests of Britain (it’s the right thing to do – period), and also believes that he can get away with it politically, despite the strong anti-war sentiment in Britain (it’s the right thing to do – politically). I suppose it gets a bit more complicated because of the control Mr. Blair and his party have over elections in the British parliamentary system, but I’ll leave it to the Comparative Politics majors to duke it out over that one. Considering a relaxation or restatement of the assumption of vote-maximization is especially important when looking at officials who have already been elected. After all, if we keep the assumption taut, what can Public Choice models tell us about officials who no longer face elections themselves? Lame duck presidents come to mind. The point is this: Must we completely rule out altruistic or moralistic motives in government? While such subjective traits are difficult to evaluate in a formal or mathematical sense under utility optimization, it does not mean such motives do not exist.

To vote or not to vote, or to be forced to vote

Although democratic voting exists in most countries, few have made it a legal citizen duty. According to Wolfgang Hirczy de Mino, author of the article “Compulsory Voting”, “it is an option available to new democracies and worth contemplating as a means to assure high levels of voting, which is likely to enhance the legitimacy of representative institutions and of the political system generally.” Compulsory voting has been adopted by long-standing stable democracies such as Australia, Belgium and the Netherlands; it was also adopted by not so stable democracies in Latin America (Argentina, Brazil, Costa Rica and Ecuador). Mino argues that although high levels of turnout can be found under voluntary voting, compulsory voting definitely guarantees a higher rate of participation from the electorate. The highest gains from establishing mandatory voting would be in countries where voter participation is low. In addition, the law requiring voting would have to be enforced and respected by citizens in order to achieve a higher voter turnout. Lastly, Mino makes a very valuable point on how compulsory voting makes campaigning more efficient for candidates: “When the state assumes responsibility for citizens turning up at the polling stations, parties and candidate can focus on promoting their programs and on swaying voters, rather than dissipating their energies on getting the voters to come.” The argument standing against compulsory vote is more of ideological content. “The most common objection on normative grounds is that citizens ought to have the right NOT to vote as much as the right to vote. Some citizens boycott the election on principle arguing that compulsory voting impinges upon this basic freedom, while many people's failure to vote is borne out of apathy” stated Mino. “The 'right to abstain' is often asserted in the United States, and explicable with reference to its individualistic and rights-focused political culture, but the argument is aired elsewhere as well.” Furthermore, compulsory voting requires a heavy bureaucracy and administrative costs – voter information must be recorded, fines and punishments are issued to those non-voters. I don’t think being forced to vote is truly a democratic act. It actually seems silly to me being forced to go vote on certain occasions if I have no candidate I wish to vote for (the option “no candidate” is on the ballot). I also don’t see how mandatory voting would reflect the interest of the majority. A lot of completely uninformed and uninterested people in countries like Brazil or Ecuador vote every election without knowing much about their candidate. At least the voter in countries where voting is voluntary has some kind of interest or knowledge on the candidate he or she is voting for. I do agree that society would benefit from a larger and stable electorate. Spending a lot of resources on getting people to vote and not enough on the candidate’s political platform seems inefficient. Less resources are necessary when the population has already been mobilized to vote; yet, because there is a very large and fixed amount of people voting, resources get plundered anyways. Ultimately, not only I see voting as a right, but also, I believe that coercion does not necessarily bring the best interests of the majority. http://www.aceproject.org/main/english/es/esc07a.htm by: Carla Larangeira

Stigler's Theory of Regulation

Russell Roberts posted a nice blog yesterday on the licensing of taxis in Montgomery County, MD. Old gus enjoyed it very much, and I recommend that you read the entire post. Anyway, while old Gus was reading the beginning of the post, the obvious question that I kept asking myself was: "what would Stigler say?" Well, by the end of the post, Roberts reveals the answer to the question. It turns out that there is already a virtual monopolist provider of taxi service in Montgomery County (Barwood Inc.). In addition, the Washington Post article that Roberts cites reveals the following about this monopoly firm, and its relationship to Douglas Duncan, the County Executive: The company is owned by Lee Barnes, a Duncan campaign contributor and a member of the county board that regulates the industry. He holds -- directly or through affiliates -- 434 of the 580 taxi licenses in Montgomery. So here is some rent-seeking and rent-protection in action! One other thing about this fellow Russell Roberts. He is the author of the very fine romance novel entitled The Invisible Heart. A very entertaining read for all econ students. OldGus enjoyed it, even though the central character is an economist, not old prospector!

Bureaucratic Discretion or Congressional Control?

This week in class, we'll be talking about bureau behavior. A key component in the developement of a theory of bureacracy is a hypothesis regarding the independence of agencies. This blog post from my friend Alex at Marginal Revolution discusses one such agency: the Securities and Exchange Commission (SEC), and its relationship to the U.S. Senate. Please read this short post (and hyperlinks). This is a good example of something we will cover this week in class.

The Importance of Blogs

On CNN.com this morning, I found an article related to exactly what we've been asked to do for our 5% TBA - create blogs. I found that this form of publication (that I had never heard of until last week) is actually an issue of controversy and increasing popularity. In the article entitled How do bloggers impact political news? the primary concern is that readers may be influenced by blogging practices. The reason this article was in the news is because Ana Marie Cox of Wonkette! and other writers posted exit polls throughout Election Day, and this is “a practice frowned upon in the mainstream media because the data could sway the outcome.” However, as Cox states, the impact is only as strong as the readers' beliefs, and it should not be a big issue.

The advantages of blogs are discussed in this article: (1) they make it more difficult for the larger news organizations to “sit on a story,” (2) they provide stories for further exposure on these mainstream news organizations, (3) they expose flaws in news reports and thus promote their corrections. However, along with the advantages of blogs come the disadvantages. Because blogs are written by individuals like us, the credibility is not established like that of CNN or other popular news publications. At the end of the article, a University of Florida journalism professor expresses her concern that the ethics of professional journalism are at stake; she is afraid bloggers will not check the truth of their information.

Although it is considered a disadvantage in this article, I believe that blogs are actually a new source of credible information. The new bloggers who want their name out there will work hard to submit information and back it up with facts. As we all have probably noticed in these last few months, mainstream news organizations are not completely credible (Dan Rather and CBS News), and they are all certainly biased in reporting political news (the position of the camera in pictures of debates, etc.). With the addition of blogs, people will be able to read different takes on the same story and be able to form their own opinions. Therefore, I do not believe that the journalism professor has any reason to be concerned. Americans who want more insight into news and politics are smart enough to sift through the bad journalists, and therefore, those bloggers will disappear.

If you want to see some blogs from the election, click here: http://www.cnn.com/2004/ALLPOLITICS/blog/11/02/election.blog/

Double-Simultaneous Vote

While doing research for a comparative politics class, ive become aware of a somewhat unique system of voting with different institutions and voting rules than we went over in class (lies somewhat outside simple majority/plurality/maj+runoff/alternative vote/single transferable vote borda count). Throughout much of its history Uruguay used a system known by ley de lemas. This was a system of double or multiple simultaneous votes (doble voto simultaneo). A person would choose a lema (a party) and a sub lema (essentially a faction of the party) or in some instances specific interest groups w/in the sub lemas. A person would vote for their sub lema of choice which would have a representative for office, lets say president. The votes for each sub lemas would be tabulated up for the party, and the party with most votes won, then they would look at which sub-lema got the most votes within the party to see who is the president. Essentially it is a primary and an election at once. (At times, there would be a list of representatives for parliment as well...that are included in the same way, making it a triple-simultaneous vote). This sounds somewhat confusing, and there is a somewhat simplified explanation here: http://www.country-studies.com/uruguay/the-electoral-process.html . In 1996 this system was drastically reformed. There is a complex and long list of political reasons; there was a significant shift away from a 2 party system, it encouraged factionalism, they were making changes to prevent the democratic collapse in the 80s, and many others that you can read about in depth here: http://www.diba.es/icps/working_papers/docs/WP_I_191.pdf But perhaps we can just analyze it using some of the ideas for class. If it shows major problems here, we can see the ECON333 reasons it needed to be reformed. Ordering Information? not really...you only cast a vote for your sub lema (a bit of ordering, for the other candidates in your lemas of your lema are helped by your vote and sort of ranked over the other lemas) Condorsat Efficiency? Definitely not. say there are 2 lemas (1,2) , and 2 sub lemas per party(1a 1b, 2a, 2b). If lema 1 has 51 percent of the vote, and 1a has 51 percent of the lemas votes. so candidate 1a gets president. Its possible in a pairwise election he might lose to all other candidates. its concievable that 1a could lose to 1b (if those that voted for 2 prefer 1b), 2a (if 2b and 1b prefer 2a), 2b (if those who voted for 1b and 2a prefered them over 1a). Minimized incentive for strategic behavior? well this isnt quite as bleak. It encourages people to vote for the person closest to them, even if they would have a small chance in a simple majority/2 party/pair-wise election. At least if their candidate cant win votes will go to their lema of choice. And anyone has a chance to win, since all you need to worry about is winning your lema, and others can worry about your lema winning. This voting system means the external costs might be considerably higher than normal. It is quite possible that tehre will be fewer middle of the road candidates selected in the long run, so althoguh decision making costs might be reduced (primary, and election in 1), external will go through the roof w/it being possible that only a small portion of the electorate actually voted for the candidates sub-lema. I apoligize if some of this is confusing, it took me a little while and a couple of readings to fully understand their electoral system.

US Limits Chinese Imports

As I was browsing the internet for an article that fit in with the curriculum of our public choice class, I stumbled across an interesting article from the Washington Post called "US Limits Chinese Sock Imports"http://www.washingtonpost.com/wp-dyn/articles/A55580-2004Oct22.html. As we have learned in class, trade restrictions can be important for the economy. Yes, they can be damaging to the domestic economy, but they can create rent (monopoly profit) for the domestic producers, which is considered beneficial. But, have you ever wondered what would happen if these quotas were lifted. According to this article, if it wasn't for the Bush administration, who extended the quota restrictions for Chinese sock imports, the US economy might have felt the impact sooner rather than later. These quotas were set to be lifted January 1st, thus allowing apparel companies to freely import from anyone around the world, enabling China to take over because of their low costs and high efficiency. This would actually cause the US textile makers to suffer more losses and continue to drive many of them out of the market, which isn't good for the domestic economy. According to James Jochum, assistant secretary of commerce for import administration , Chinese imports have "had a significant impact on the US industry", which has helped to drive about one-quarter of all US sock manufacturers out of the business and reduced the market share of the domestic industry from 83 percent in 2001 to 68 percent last year. Also, Jochum said that capping sock imports would be good because they have caused "both disruption and a threat to disruption" in the US market. Hoping the sock import quotas weren't lifted, but extended, the US textile makers asked Washington to take action and extend the quotas, allowing US textile and apparel makers to stay afloat in a demanding industry. The administration looked at the issue and concluded that these quotas do in fact need to be extended, thus reducing the amount of Chinese sock imports, with hopes of helping the US economy. Not only does this decision affect the sock market, it has the potential to affect other imported products from China. Now, everyone is just waiting on the administration's decision. I find the administration's decision to be justified. By extending the quotas, I think the US economy will improve. I know that it will not fully correct the problem of importing cheaper products from foreign manufacturers, causing US textile makers to lose their jobs, but it is a step in the right direction for potentially getting more jobs for the people of the United States because when people demand less from foreign producers, their Price will increase, causing a greater quantity to be demanded domestically. Hopefully, this will allow more domestic firms to re-open and keep a close eye on the ones that have lower costs and higher efficiency.

Farah's Post

This is actually a comment on Farah's post, but old Gus just can't figure out how to put hyperlinks into comments... Anyway, Old Gus was struck by the odd idea that Hillary Clinton would be a move toward the median voter. Can this be?? Is Mrs. Socialized Medicine reeeelly more conservative than John Kerry? Well, Old Gus hasn't had a chance to keep up with Hillary's roll call votes in the Senate (with all my prospecting). So I had to do a little research. There are several groups that track roll call votes of legislators and then tally them for a liberal-conservative ranking. Two of the most prominent are the Americans for Democratic Action (ADA), and the American Conservative Union (ACU). The ADA website is too grumpy for old Gus, so I looked up the ACU ratings for Hillary and John Kerry for the four years that Hillary has been in the Senate. These ratings go from zero to 100, with 100 being the most conservative. So, if Hillary is a move to the center, as is claimed in The Economist article, her ACU ratings would be higher than John Kerry's. Here are the ratings... Year Kerry Clinton 2003 13 10 2002 20 10 2001 4 12 2000 12 0 Lifetime 5 11 Well, crawdads and crayfish! Old Gus is onto something! If Hillary is a move toward moderation, her roll call votes over the past 4 years do not bear that out! On the other hand, perhaps Kerry has been moving himself over the past few years, in anticipation of his run for the Whitehouse (his lifetime rating is only 5). Anyway, Old Gus really liked your post, Farrah. I am just not sure that Hillary is a true move toward the median voter. If the Democrats really want to move over and try to pick up a few red states, they ought to nominate someone like Joe Lieberman.

Another approach to informative campaigning

Candidates stand to benefit from engaging in informative campaigning when doing so entices more voter support than it loses. The traditional approach is for the candidate to inform voters of his or her position in the issue space. In this way, all voters whose ideal point is closest to that candidate will vote for him or her as opposed to a more distant candidate. But what about ignorant voters? To clarify, not voters ignorant of the candidate’s position, but of their own position. Surely not every voter has settled into a comfortable position of the left-right political continuum. What if, instead of informing a voter of the candidate's position, the candidate informed the voter of the voter's position? If the two positions were to just happen to align, what an epiphanic moment that would be for the voter; not only would they have found their niche on the political spectrum, but also their candidate for the next election. Perhaps this is one of the motivations behind The World's Smallest Political Quiz (WSPQ), published by the Advocates for Self-Government. The Advocates, a “non-profit, non-partisan libertarian educational organization,” claim that while only 2% of the voting population identifies itself as libertarian, a full 16% is libertarian. The Advocates place much of the blame for this disparity on the following, widely used “left-right” political spectrum paradigm <------- left ------- center -------- right --------> They claim that: "...This model is misleading and fatally flawed. It doesn't have a place for many millions of people who don't fit neatly into some variant of liberal or conservative. "(excerpt from section 2) "... Libertarians are probably the largest group that the "left-right" line excludes. A more accurate political map shows that many people now labeled "liberal" or "conservative" are actually more libertarian than anything else -- but they don't know it, because the rigid and artificial division of American politics into "left-right" doesn't allow for that. Libertarians thus have a big stake in seeing a more accurate map accepted. "(excerpt from section 5)

For this cause, David Nolan created what is now referred to the as the Nolan Chart. The chart is a mapping of the political spectrum that separates out personal and economic issues. It is a basis for the WSPQ that the Advocates advocate (*groan*). As written above, the Advocates claim that the distribution of potential voters over Nolan’s chart is more favorably skewed toward libertarian views. If it is true that there are many “undiscovered” libertarians out there, voter-side informative campaigning may be a productive way for libertarian candidates to attract voters. But hey, if your quiz results don’t sway you, don’t give up on the libertarian viewpoint just yet. If not for the quiz, do it for your economic heroes, James Buchanan and Milton Friedman.

Democrats on the Move

I read an interesting article in the Economist entitled “The Great Democratic Crack Up” http://www.economist.com/world/na/displayStory.cfm?story_id=3353402 which discussed Hillary Clinton as being the most likely democratic candidate for the 2008 election because of her orientation towards the center. The article argues that Senator Kerry’s loss should be a wake up call for Democrats who need to stop moving towards the left and start moving towards the center. This will help in appealing to the more conservative constituency in Middle America who voted for the Republican party without fail this election. Hillary Clinton is considered to be a good candidate because “she has moved to the centre since becoming senator of New York: she has been careful to support the Iraq war and has found herself a seat on the Senate Armed Services Committee.” Hillary still appeals however to the left because of “her record (particularly on health care reform) and her sex (remember that the majority of voters in the Democratic primaries are women).” She is however more oriented towards the center than Senator Kerry was for example. The writer is entertaining the notion that Hillary’s move toward the center may be what the Democratic party needs to capture the median voter and to win the election for the Democrats in 2008. “Moving the party farther to the left is unlikely to do the job. Democrats need to learn how to relate to a culturally conservative country.” It is now evident that Senator Kerry was not very successful in achieving this goal. This is an interesting idea but after grappling with it for a while I had a few concerns. Let’s say that the Democrats do adopt a new strategy in the upcoming election and we see a huge push towards the center by the left in order to capture the median voter. Given the assumptions of the Median Voter Thereom particularly the condition of spatial mobility, it is likely that the right will push right back and also attempt to take over the median voter. At this point both parties will be moving more towards the center and there may be less of a distinction between both parties and their platforms. This may lead to voters abstaining from voting all together because of their indifference among both candidates resulting from their similar platforms. As both parties move toward the center to capture the median voter there will be a convergence of their political stances which may lead to either abstention or a less rational and more random choice made by voters. This idea of moving towards the center should be thought out carefully by Democrats so that they do not lose the median voter all together because of indifference and alienation. There will be those in the Democratic party that feel alienated and may feel that their party has compromised many of the liberal ideas that they cherish in order to move towards the center. These considerations should be made before the Democratic party implements a strategy for the 2008 election. http://www.economist.com/world/na/displayStory.cfm?story_id=3353402