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.


Racial Differences in Police Use of Force

Interesting paper by Roland G.Fryer, Jr.

This paper explores racial differences in police use of force. On non-lethal uses of force, blacks and Hispanics are more than fifty percent more likely to experience some form of force in interactions with police. Adding controls that account for important context and civilian behavior reduces, but cannot fully explain, these disparities. On the most extreme use of force – officer-involved shootings – we find no racial differences in either the raw data or when contextual factors are taken into account. We argue that the patterns in the data are consistent with a model in which police officers are utility maximizers, a fraction of which have a preference for discrimination, who incur relatively high expected costs of officer-involved shootings.


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.

President Sarkozy on competition

France’s new president, Nicolas Sarkozy, recently persuaded his fellow European leaders to drop the principle of “free and undistorted competition” from Article 3 of the old constitutional treaty. He asked, “Competition as an ideology, as a dogma: what has it done for Europe?”

He is right. Apart from making the Europeans prosperous, keeping prices low, businesses honest, encouraging innovation, and sweeping away incompetence, what has competition ever done for Europe?

Environment and economy in China

From Washington Monthly,

Like other cities in China, Beijing has a daily weather report and a daily pollution report. On the increasingly crowded freeways, drivers can see only so far ahead; each car leaves a wake in the smog. The dank air creeps inside buildings, into cars, into hotel rooms, leaving you nowhere to escape the distinct smell and the feeling of a weight always on your chest. The sun looks like a flashlight wrapped in cotton gauze, and the sky remains beige no matter the time of day. Most days, the city has no discernible skyline. Most nights, no moonlight or starlight pierces the darkness.

To understand why Chinese officials are genuinely concerned about the country’s growing environmental problems, you must first remember that they live here.

That is obviously true, and it is one good reason why we can be hopeful about China’s future efforts to curb pollution.

Another article in Business Week, entitled Broken China, is skeptical about the sustainability of the Chinese economic boom.

Huge underground lake found

The BBC reports that a huge underground lake has been found in Sudan’s Darfur region, which scientists believe “could help end the conflict in the arid region”.

Presumably it is non-renewable fossil water, like the Nubian Sandstone Aquifer System.

Why this should help bring about peace, rather that provide another example of the natural resource curse, it not clear.

There is not much water in Dafur. The is no oil in Somalia. If the Chinese state oil company, CNOOC, succeeds in finding oil in Somalia, will that bring about peace in Somalia?

What happens to any system depends not only on the inputs to the system, but also on the state of the system. Just adding an input, be it water or oil, is no guarantee that peace will be the result. The scientists quoted by BBC seem to have an overly simplistic model in mind.