The Curley Effect: The Economics of Shaping the Electorate

James Michael Curley, a four-time mayor of Boston, used wasteful redistribution to his poor Irish constituents and incendiary rhetoric to encourage richer citizens to emigrate from Boston, thereby shaping the electorate in his favor. As a consequence, Boston stagnated, but Curley kept winning elections. We present a model of using redistributive politics to shape the electorate, and show that this model yields a number of predictions opposite from the more standard frameworks of political competition, yet consistent with empirical evidence.

A nice paper (pdf) by Edward Glaeser and Andrei Shleifer.



Dani Rodrik, It’s a war of ideas, not of interests

Another perceptive blog post by Dani Rodrik.

The progressives’ preference for specific policies is rooted in the view that voters’ “interests” – as they derive from their occupation, income, race, or gender – are fairly fixed. So policies are winners as long as they appeal to those “interests.”

But there is a complementary perspective in politics that says political competition is as much about shaping those interests. The politics of ideas is about activating identities that may otherwise remain silent, altering perceptions about how the world works, and enlarging the space of what is politically feasible.

Progressives need to shape the narrative that structures voters’ interests. They need to be able to appeal to identities beyond race and gender – occupation, social class, income status, and patriotism. They need to convince the electorate that it is their interests they have at heart – not those of bankers or of large corporations.  They need to forge a story line that will shape a package of policy proposals into a politically appealing whole.

Progressives need not give up on the white, male working class. But they need to understand that politics is as much about redefining perceptions of interests as it is about responding to those interests.

Read the whole post.


Best deal for a Master’s degree in Economics?

This has got to be one of the best deals around. I got this mail from the highly ranked Toulouse School of Economics,

Tuition fees for [the English language] Master’s degree amount around 300 Euros for one academic year. Social security (compulsory health insurance) for students amounts 200 Euros per academic year. For living expenses in Toulouse, you should count at least 500 Euros per month (survival) and more probably 700 to 800 Euros all included.

Best regards
Aude Schloesing

Toulouse School of Economics
Université Toulouse 1
Manufacture des Tabacs
31042 Toulouse Cedex (France)
tel: + 33 (0)5 61 12 87 65
fax: + 33 (0)5 61 12 86 37

Prices, prices, prices

From BBC’s website,

The focus on reducing carbon emissions has blinded us to the real problem – unsustainable lifestyles, says Eamon O’Hara.[…]

We urgently need to think about the more fundamental concept of sustainability and how our lifestyles are threatening not only the environment, but developing countries and global peace and stability[…].

How many people are tired and weary of modern living? The endless cycle of earning and consumption can be exhausting and does not necessarily bring happiness and fulfillment. Can we do things differently, and better?

I don’t think an appeal to our better selves to change our lifestyles is going to work. And I certainly don’t want the government to tell me in detail what I can or can’t do.

What we need to do is to get the prices right. The enormous environmental problems in China and India show what happens if you don’t get prices for water, power, and pollution right. This is not at all simple and easy to do; rich OECD countries are also struggling to get to grips with it. But it is absolutely fundamental.

Carbon offsets and waste, fraud, and corruption

On Maverecon, Willem Buiter writes a sensible post, Carbon Offsets: Open House for Waste, Fraud and Corruption,

Offsets, the creation of credits that can be added to the (national, regional or global) CO2E [carbon dioxide equivalent greenhouse gas emissions] quota under cap and trade schemes, require not only the (difficult) verification of how much CO2E is actually emitted in the real world, but also the impossible verification of how much CO2E would have been emitted in some counterfactual alternative universe. The quantity of offset credits earned by some activity is the net quantity of CO2E that has been saved as a result of this activity.

Just stating it makes one shout out: impossible! Fraud! Bribery! Corruption! Wasteful diversion of resources into pointless attempts at verification! And indeed this is what is happening before our eyes. Enterprises get paid for not cutting down trees and for installing filters and scrubbers they would have installed in any case. The new Verification of the Carbon Counterfactual industry is growing in leaps and bounds. The amounts of money involved are vast and the opportunities for graft, bribery and corruption limitless. The offset proposal has birthed a monster.

Who came up with this demented offset concept? It’s an attempt to placate the developing world for not having enough CO2E emitting activities historically to benefit from a significant free initial allocation of credits in proportion to a country’s historical track record of CO2E emissions[…]

– but read the post.