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July 30, 2007

Baccaro and Rei on Institutions and Unemployment

Abstract: The view that unemployment is caused by labor market rigidities and should be addressed through systematic institutional deregulation has gained broad currency and has been embraced by national and international policymaking agencies alike. It is unclear, however, whether there really is robust empirical support for such conclusions. This article engages in an econometric analysis comparing several estimators and specifications. It does not find much robust evidence either of labor market institutions direct effects on unemployment rate, or of a more indirect impact through the magnitude of adverse shocks. At the same time, we find little support for the opposite, proregulatory position as well: the estimates show a robust positive relationship between union density and unemployment rates; also, there is no robust evidence that the within-country variation of bargaining coordination is associated with lower unemployment (as frequently argued), nor is it clear that bargaining coordination moderates the impact of other institutions. All in all, restrictive monetary policies enacted from an independent central bank and other determinants of real interest rates appear to play a more important role in explaining unemployment than institutional factors.

Lucio Baccaro and Diego Rei (2007), “Institutional Determinants of Unemployment in OECD Countries: Does the Deregulatory View Hold Water?” International Organization 61:527-569. Available here (sub required).

Hiscox and Lake on the Size of States

Abstract: We demonstrate that territorial size is intimately linked to the structure of political authority within states. We take an evolutionary approach, arguing that there are certain stable, long-term equilibrium combinations of size and political institutions. Building on a general theory of public goods provision and rent-seeking, we predict that, ceteris paribus, democracies will tend to be smaller than autocracies, since governments in the latter have greater incentives to expand the territory under their control in order to maximize rents; looked at from the other direction, small states are more likely to have democratic institutions than large states, since governments in the latter suffer greater losses in rents from expanding the size of the ruling coalition. Federalism offers an alternative type of equilibrium. We predict that democracies are more likely to adopt federal institutions than are autocracies, since governments in the latter are less inclined to relinquish authority to produce public goods (and hence the capacity to generate rents) to others. In addition, by allowing different public goods to be provided at more optimal scales, federalism increases incentives for democratic governments to expand the size of the state. Overall, we expect that unitary (i.e. non-federal) democracies will tend to be smaller than both autocracies and federal democracies. We find strong support for the hypotheses in a series of cross-sectional empirical investigations.. Theory and evidence indicate that democracy, federalism, and size are closely related to one another.

Michael Hiscox and David Lake (unpublished), “Democracy, Federalism, and the Size of States.” Available here. Via Lawrence Solum.

July 23, 2007

Lane Kenworthy on Jobs and Equality

This book does not speak to the question of inequality’s impact on economic growth. I assume that if countries with low inequality were (on average) able to grow just as rapidly as their high-inequality counterparts in the 1980s and 1990s, they may be able to do so over the next few decades as well. The question that motivates the book is: How can affluent countries maintain or move toward low inequality? .. Low income inequality is an increasingly difficult goal. Inequality in the market distribution of income - that is before taxes and government transfers are taken into account - has been rising during the past two decades in many of these countries. … One reason for this is that employment shifts from manufacturing to services, union fragmentation, decentralization of wage setting, globalization, technological change, and other developments have contributed to wage stagnation at the low end of teh distribution … Several other developments have reinforced and accentuated the impact of heightened earnings inequality … An increasingly common view, which I share, is that a key to limiting the growth of inequality in the face of these various pressures and constraints is to increase the employment rate.

Lane Kenworthy (2007), Jobs with Equality. Draft book manuscript. Available here.

Raz on Human Rights and Sovereignty

Following Rawls I will take human rights to be rights which set limits to the sovereignty of states, in that their actual or anticipated violation is a (defeasible) reason for taking action against the violator in the international arena. This is Rawls’s and my answer to the first of the two questions an account of human rights faces: while human rights are invoked in various contexts, and for a variety of purposes, the dominant trend in human rights practice is to take the fact that a right is a human right as a defeasibly sufficient ground for taking action against violators in the international arena, that is to take its violation as a reason for such action.

Such measures set limits to state sovereignty for when states act within their sovereignty they can, even when acting wrongly, rebuff interference, invoking their sovereignty. Crudely speaking, they can say to outsiders: whether or not I (the state) am guilty of wrongful action is none of your business. Sovereignty does not justify state actions, but it protects states from external interference. Violation of human rights disables this response, which is available to states regarding other misdeeds.

Joseph Raz (2007), “Human Rights Without Foundations.” Unpublished Paper. Available here.

Snippet and link taken from Larry Solum’s Legal Theory Blog.

Cusack, Iversen and Soskice on How Economic Interests Shape the Origins of Electoral Systems


The standard explanation for the choice of electoral institutions, building on Rokkan’s seminal work, is that proportional representation (PR) was adopted by a divided right to defend its class interests against a rising left. But new evidence shows that PR strengthens the left and redistribution, and we argue the standard view is wrong historically, analytically and empirically. We offer a radically different explanation. Integrating two opposed interpretations of PR – minimum winning coalitions versus consensus – we propose that the right adopted PR when their support for consensual regulatory frameworks, especially of labor markets and skill formation where co-specific investments were important, outweighed their opposition to the redistributive consequences; this occurred in countries with previously densely organized local economies. In countries with adversarial industrial relations, and weak coordination of business and unions, keeping majoritarian institutions helped contain the left. This explains the close association between current varieties of capitalism and electoral institutions, and why they
persist over time.

Thomas Cusack,Torben Iversen and David Soskice (forthcoming), “Economic Interests and the Origins of Electoral Systems,” American Political Science Review. Available here.

Wibbels and Ahlquist on Social Security in the Developing World

Despite concerted attention to the causes and consequences of government investment in education, little research has sought to systematically explain the roots and developmental consequences of the single largest category of spending in the developing world: social security. This paper establishes a theoretical framework linking autarkic post-World War II economic strategies in the developing world to the emergence of insurance-based social regimes that emphasize spending on programs like social security. In doing so, the paper has three aims: First, to identify structural factors affecting the choice of internally oriented developmental strategies; second, to link key features of internally-oriented capitalism to the birth and development of social policy regimes; and third, to examine the developmental implications of insurance-based social spending regimes in an era of opening international markets.We argue that a government’s choice of development strategy is conditioned by the size of the domestic market, relative abundance of labor, and land inequality in the context of a closed international trading system. The development strategy in turn shapes the fiscal priority governments place on social insurance. We then claim that large investments in inequitable insurance programs left nations poorly prepared for the opening of international markets that began in the early 1980s. Preliminary empirical analysis finds
support for our argument. Overall, the results suggest that economic policies in the 1960s and 1970s had important implications for the emergence of social policy and that those early outlines are more important than “globalization” in shaping both contemporary social policy and economic outcomes.

Erik Wibbels and John Ahlquist (2007), “Development, Autarky, and Social Insurance,” unpublished paper. Available here.

July 16, 2007

Kenworthy, Barringer, Duerr and Schneider on the Democrats and Working Class Whites

Abstract: We explore defection of working-class whites from the Democratic party since the mid 1970s. Identification with the Democrats among this group fell by twenty percentage points in the late 1970s and the 1980s and has not changed since then. We consider the impact of compositional shifts and issues on this development and find that the latter played a far more important role. Working-class whites who turned away from the Democrats appear to have done so in part because their views shifted to the right on some issues, in part because they perceived the Democrats as shifting to their left on some issues, in part because some issues on which they were never aligned with the party’s positions increased in importance to them, and in part because they lost confidence in the Democrats’ ability to deliver on key issues. We conclude that material issues were a more important cause of the decline in Democratic identification than social/cultural ones. The lack of change in Democratic identification among working-class whites since the early 1990s appears to have been due to an increase in the importance of social/cultural issues and to a cohort effect.

Lane Kenworthy, Sondra Barringer, Daniel Duerr, and Garrett Andrew Schneider (2007). “The Democrats and Working-Class Whites.” Unpublished paper. Available here.

Hyde on why political leaders invite election monitors and cheat in front of them

Until 1962, there were no recorded cases of international election observation in sovereign states. Today, it is rare for a developing country to have a legitimate election without the presence of international observers. Upwards of 80 percent of elections held in nonconsolidated democracies are now monitored, and many leaders orchestrate obvious electoral fraud in the presence of international observers who condemn them. Alberto Fujimori of Peru,
Robert Mugabe of Zimbabwe, Ferdinand Marcos of the Philippines, Manuel Noriega of Panama, and Eduard Shevardnadze of the Republic of Georgia, among others, invited large delegations of international observers to judge their elections and were subsequently condemned internationally for widespread manipulation of the electoral process. Inspired by this empirical puzzle, this article addresses the following two-part question: First, why did the practice spread so widely when it is potentially costly for leaders to invite international observers to judge their elections? Second, why do so many leaders bother to invite observers when they know they are going to cheat?

Susan Hyde (2007), “Catch Me if You Can: Why Leaders Invite International Election Monitors and Cheat in Front of Them.” Unpublished paper. Available here.

Romer and Romer on the contractionary effects of taxes

Abstract: This paper investigates the impact of changes in the level of taxation on economic activity. We use the narrative record — presidential speeches, executive-branch documents, and Congressional reports — to identify the size, timing, and principal motivation for all major postwar tax policy actions. This narrative analysis allows us to separate revenue changes resulting from legislation from changes occurring for other reasons. It also allows us to further separate legislated changes into those taken for reasons related to prospective economic conditions, such as countercyclical actions and tax changes tied to changes in government spending, and those taken for more exogenous reasons, such as to reduce an inherited budget deficit or to promote long-run growth. We then examine the behavior of output following these more exogenous legislated changes. The resulting estimates indicate that tax increases are highly contractionary. The effects are strongly significant, highly robust, and much larger than those obtained using broader measures of tax changes. The large effect stems in considerable part from a powerful negative effect of tax increases on investment. We also find that legislated tax increases designed to reduce a persistent budget deficit appear to have much smaller output costs than other tax increases.

Christina D. Romer, and David H. Romer (2007), “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” NBER Working Paper No. 13264. Available here (via Marginal Revolution).

Birney, Shapiro and Graetz on Taxes and the Manipulation of Public Opinion

We examine the recent battle for federal estate tax repeal in order better to understand the role of public opinion in enacting legislation, particularly regarding low salience issues. In Part I, our analyses of the polling data show how the contours of public opinion were strategically interpreted in the policy debate. When the issue was framed as a matter of fairness, misperceptions of selfinterest and principled beliefs about fairness combined to yield apparently overwhelming support for repeal. However, when it was instead framed as a matter of priority, majorities supported estate tax reform options over repeal. In Part II, we examine how interest groups leveraged their findings about public opinion into messaging, coalition-building, and organized campaigns that dramatically changed the public image of repeal from extreme to mainstream, and moved it off the economic policy ideological spectrum. By selectively revealing, and threatening to influence, latent public opinion, interest groups could help clear and sow apparent minefields of public opinion. In relating our analyses to the literature, we show that the estate tax repeal cannot be explained by common political science theories, such as thermostatic, power elite, or latitudinal models of public opinion. We propose an alternative “running room” model, in which policy outcomes depend on howpoliticians’ perceptions about a potential public opinion backlash are manipulated—even when public opinion itself does not change.

Mayling Birney, Ian Shapiro and Michael J. Graetz (2007), “The Political Uses of Public Opinion. Lessons from the Estate Tax Repeal. Unpublished paper. Available here.

July 13, 2007

Morgan and Prasad on the origins of French and US tax systems

ABSTRACT: We explain why the U.S. has a more progressive tax system than France by exploring the origins of the French and American tax systems in the early 20th century. Our account centers on the sequence of industrialization and state development in each country: the arrival of industrial capitalism in the nineteenth century preceded the formation of state capacity at the national level in the U.S., while a well-developed national state preceded industrial capitalism in France. In the U.S., the absence of a strong state and concomitant abuses by big business led to an intense public interest in disciplining capital, which underpinned a political movement for progressive income taxation. In France, by contrast, a strong state with a well-developed fiscal apparatus was perceived as extremely intrusive, whereas industrial capitalism was less developed than in the US. Instead of rallying the lower and middle classes around a fight against monopoly capitalism and inequality, French income tax advocates instead had to assuage fears of “fiscal inquisition” by the state. When the First World War dramatically increased American and French revenue needs, those needs were met through income taxation in the US, and sales taxation in France, solidifying divergent approaches towards taxation that would endure throughout the 20th century.

Kimberly Morgan and Monica Prasad (2007), “The Origins of Tax Systems: A French-American Comparison.” Unpublished paper. Available here.

Hopkins and King on extracting meaning from text (with application to blogs)

Abstract: We develop two methods of automated content analysis that give approximately unbiased estimates of quantities of theoretical interest to social scientists. With a small sample of documents hand coded into investigator-chosen categories, our methods can give accurate estimates of the proportion of text documents in each category in a larger population. Existing methods successful at maximizing the percent of documents correctly classified allow for the possibility of substantial estimation bias in the category proportions of interest. Our first approach corrects this bias for any existing classifier, with no additional assumptions. Our second method estimates the proportions without the intermediate step of individual document classification, and thereby greatly reduces the required assumptions. For both methods, we also correct statistically, apparently for the first time, for the far less-than-perfect levels of inter-coder reliability that typically characterize human attempts to classify documents, an approach that will normally outperform even population hand coding when that is feasible. We illustrate these methods by tracking the daily opinions of millions of people about candidates for the 2008 presidential nominations in online blogs, data we introduce and make available with this article, and through evaluations in available corpora from other areas, including movie reviews, university web sites, and Enron emails. We also offer easy-to-use software that implements all methods described.

Daniel Hopkins and Gary King (2007), “Extracting Systematic Social Science Meaning from Text.” Unpublished paper (July 2007 version). Available here.

July 12, 2007

Berger on whether globalization may come to a crashing halt

In August 1914 the first great wave of globalization crashed to an abrupt and totally unexpected end, as the outbreak of war suspended trading in all major markets. … The general lesson of this tragedy is one that shakes credence in any kind of irreversibility of globalization or triumph of interests over politics. But within the confines of the globalization story as it played out before the war, there are lessons to be gained from observing the processes of economic and political strain and adjustment. A return to the earlier period suggests, too, that there are lessons to be learned from the debates of economists and from considering whether, at the end of the day, their analyses and quarrels turned out to have identified the most important dangers to the openness and stability of the international economy or not. Today’s debates over the international flows of capital, goods, and services center around the puzzle of privilege—the possibility for some countries to enjoy “an excess return on assets relative to liabilities allowing them to sustain larger trade deficits in equilibrium”—- as Christopher Meissner and Alan Taylor define it in their contribution to this conference (p.5). Why do foreigners, at apparently such low rates of return, continue to invest so heavily in the United States? Why do American investments abroad apparently earn higher returns
than others derive operating in the same countries? How sustainable is a state of affairs in which the US current account deficit is about 7 percent of GDP with a resulting debt that over time will place a large share of the country’s capital stock in foreign hands? Absent any agreement on the basic mechanisms and relationships underlying this situation, and even any agreement on the existence or not of a serious problem for public policy, scenarios of readjustment diverge widely.

Suzanne Berger, “Historic Imbalances and Great Debates: Do the Economists See It Coming?,” MIT Working Paper. Available here.

Brenner on the Travails of IR Theory

Abstract: Whereas the end of the Cold War sparked debates within and among paradigms in the field, the response to September 11 has been comparatively muted. Some observers have questioned the significance of September 11, while others have cast doubt on the ability of realism to account for an outcome that falls outside of its emphasis on great-power conflict. Realism must not only address outside critics but also overcome internal resistance in the face of these changes. This resistance entails reluctance by theorists to address a novel phenomenon, as well as axiomatic impediments that lie in the hard core of the realist research program. The mechanism of “monster-adjustment,” discussed by Imre Lakatos, is offered as a way in which realism can extend its scope beyond centralized territorial states. This process subjects the underspecified assumption of the necessity of unit isomorphism in international systems to increased scrutiny, offering a way to extend the explanatory capacity of realist frameworks. With realism released from these constraints, opportunities for productive engagements with other paradigms may be realized.

William J. Brenner (2006),” In Search of Monsters: Realism and Progress in International Relations Theory after September 11,” Security Studies 15:496 - 528. Available here (sub required). Also available here.

July 09, 2007

Levy and Temin on Institutions and Inequality in America

Abstract: We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage – all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story.

Frank Levy and Peter Temin (2007), “Inequality and Institutions in 20th Century America,” MIT Industrial Performance Center Working Paper. Available here.

July 07, 2007

Heaney and Rojas on Partisanship and the Anti-War Movement

Abstract: American social movements are often bitterly divided about whether their objectives are achieved better by working with one of the major political parties or by operating independently. These divisions are consequential for how social movements and political parties respond to one another. First, differing partisan attitudes shape the structure of activist networks, leading activists to join organizations with others who share their party loyalties or disloyalties. Second, partisan attitudes affect how activists participate in the movement, with strong partisans more likely to embrace institutional tactics, such as lobbying. Third, partisanship affects activists’ access to the institutions of government, such as Congress. Relying on surveys of antiwar activists attending large-scale public demonstrations in 2004 and 2005 and a Capitol Hill Lobby Day in September 2005, the authors argue that some activists integrate into
major party networks through the “party in the street,” an arena of significant party-movement interaction.

Michael T. Heaney and Fabio Rojas (2007), “Partisans, Nonpartisans, and the Antiwar Movement in the United States,” American Politics Research 35:431-464. Available here.

Via orgtheory.net.

Engel on the politics of attacking lawcourts

Abstract: How can we account for variation in politicians’ attacks on the courts? Why do more recent manifestations never seem to rise above rhetoric whereas nineteenth-century instances are characterized by measures taken to structurally weaken the federal judiciary? By investigating cases where anti-court actions are taken, i.e., jurisdiction stripping, court-stacking, judicial impeachment, etc., as well as cases where anti-court rhetoric is prevalent yet no disciplinary action follows, I develop a theory explaining this pattern. Rather than rely on norms of judicial supremacy as much of the current literature does, I suggest that rhetorical attack without follow-through is a rational strategy contingent on changes, over time, to extra-constitutional institutions, such as parties, that influence how constitutional institutions, such as the judiciary, are viewed by elected officials. While it is in the short-term electoral interest of members of Congress and the president to attack the undemocratic potential of the federal judiciary, exploiting the specter of a “countermajoritarian difficulty”, it is also in their long-term strategic interest to maintain judicial integrity and power as a potentially useful weapon with which to implement policy and ideological aims. Initial evidence is gathered from anti-Court rhetoric in the national party
platforms and special attention is paid to case selection and theory testing in the context of small-N research.

Stephen M. Engel, “Attacking the Court: A Theory of Political Contingency and Initial Findings Drawn from National Party Platforms,” unpublished paper. Available here.

July 06, 2007

Drezner on Public Opinion and Realism

Abstract: For more than half a century, realist scholars of international relations have maintained that their worldview is inimical to the American public. For a variety of reasons - inchoate attitudes, national history, American exceptionalism - realists assert that the U.S. government pursues realist policies in spite and not because of public opinion. This paper takes a closer look at the anti-realist assumption by examining survey data and the empirical literature on the mass public’s attitudes towards foreign policy priorities and worldviews, the use of force, and foreign economic policy over the past three decades. The results suggest that far from disliking realism, Americans are at least as comfortable with the logic of realpolitik as they are with liberal internationalism. The persistence of the anti-realist assumption might be due to an ironic fact. American elites are more predisposed towards liberal internationalism than the rest of the American public.

Daniel W. Drezner (forthcoming), “The Realist Tradition in American Public Opinion,” Perspectives on Politics. Available here.

Middleton and Green on whether MoveOn influences turnout

Abstract: One of the hallmarks of the 2004 presidential election was the unusual emphasis on face-to-face voter mobilization, particularly face-to-face mobilization conducted within neighborhoods or social networks. Unlike previous studies of face-to-face voter mobilization, which have focused largely on nonpartisan campaigns conducted during midterm or local elections, this study assesses the effects of a multi-state campaign organized by MoveOn.org, an organization that allied itself with the Democratic Party in 2004 to aid presidential candidate John Kerry. A regression discontinuity analysis of 41,654 voters in nine swing states demonstrates that neighbor-to-neighbor mobilization substantially increased turnout during the 2004 presidential election. Contact with MoveOn volunteers increased turnout by approximately seven percentage-points. This finding corroborates experimental findings showing the effectiveness of door-to-door canvassing but contradicts results suggesting that such mobilization is ineffective in the context of high-salience elections.

Joel A. Middleton and Donald P. Green, “Do Community-Based Voter Mobilization Campaigns Work Even in Battleground States? Evaluating the Effectiveness of MoveOn’s 2004 Outreach Campaign,” unpublished paper. Available here.

Gelman, Shor, Bafumi and Park on income and voting

Abstract:We find that income matters more in “red America” than in “blue America.” In poor states, rich people are much more likely than poor people to vote for the Republican presidential candidate, but in rich states (such as Connecticut), income has a very low correlation with vote preference. In addition to finding this pattern and studying its changes over time, we use the concepts of typicality and availability from cognitive psychology to explain how these patterns can be commonly misunderstood. Our results can be viewed either as a debunking of the journalistic image of rich “latte” Democrats and poor “Nascar” Republicans, or as support for the journalistic images of political and cultural differences between red and blue states— differences which are not explained by differences in individuals’ incomes. For decades, the Democrats have been viewed as the party of the poor, with the Republicans representing the rich. Recent presidential elections, however, have shown a reverse pattern, with Democrats performing well in the richer “blue” states in the northeast and west coast, and Republicans dominating in the “red” states in the middle of the country. Through multilevel modeling of individual-level survey data and county- and state-level demographic and electoral data, we reconcile these patterns. Key methods used in this research are: (1) plots of repeated cross-sectional analyses, (2) varying-intercept, varying-slope multilevelmodels, and (3) a graph that simultaneously shows within-group and between-group patterns in a multilevel model. These statistical tools help us understand patterns of variation within and between states in a way thatwould not be possible from classical regressions or by looking at tables of coefficient estimates.

Andrew Gelman. Boris Shor, Joseph Bafumi, and David Park, “Rich state, poor state, red state, blue state: What’s the matter with Connecticut?,” unpublished paper. Available here.

July 05, 2007

Nexon and Wright on the Politics of Empire

Abstract: Scholars of world politics enjoy well-developed theories of the consequences of unipolarity or hegemony, but have little to say about what happens when a state’s foreign relations take on imperial properties. Empires, we argue, are characterized by rule through intermediaries and the existence of distinctive contractual relations between cores and their peripheries. These features endow them with a distinctive network-structure from those associated with unipolar and hegemonic orders. The existence of imperial relations alters the dynamics of international politics: processes of divide and rule supplant the balance-of-power mechanism; the major axis of relations shift from interstate to those among imperial authorities, local intermediaries, and other peripheral actors; and preeminent powers face special problems of legitimating their bargains across heterogeneous audiences. We conclude with some observations about the American empire debate, including that the United States is, overall, less of an imperial power than it was during the Cold War.

Daniel Nexon and Thomas Wright (2007), “What’s at Stake in the American Empire Debate,” American Political Science Review 101:253-271. Available here. Further discussion by Ron Cooley at 3 Quarks Daily and in the comments section of this post at Crooked Timber.

Paxton on the Politics of The West Wing

How does The West Wing explain the motivations and rewards of its characters? What motivation animates and drives them to spend years of their lives in pursuit of so much uncertainty – policy battles they may or may not win; daily distractions from the core of their agenda; unexpected threats to the health, safety, and well-being of the nation and it citizens; or even the unrelenting boredom and slowness of creating public policy and pursuing politics in the American governmental system? Against our most base expectation for the conduct of politics, “pursuit of power” does not provide The West Wing’s answer to the above questions. For the characters on The West Wing, power’s rewards rarely enter into the calculus of their service, and the pursuit of such for its own sake brings about discouragement or rebuke. Instead, The West Wing answers that duty motivates and rewards the people in the universe of The West Wing. The program proffers a running discussion of the concept of duty as played out in the American political ideology and the contemporary political arena. Indeed, duty’s obligations and objects provide the leitmotif of the series, binding its episodes together into a more coherent whole.

Nathan Paxton (2005), “Virtue From Vice: Duty, Power, and The West Wing,” in Deceptive Words: The Poetics and Politics of Aaron Sorkin (ed. Thomas Fahey). Jefferson, North Carolina: McFarland Press. Available here. Nate blogs at Nate Knows Nada.

July 03, 2007

Horowitz, Simpson and Stam on the politics of wartime casualties

The current long-term deployment of American troops has led many to reconsider the capabilities of an all-volunteer force as well as democratic states’ ability to sustain high levels of military casualties over long time-periods. These debates are not new: military leaders and statesmen have long debated the relative merits of professional versus conscript armies. Academics and policy makers have long been concerned about the erosion of democratic resolve during wartime. We attempt to arbiter these debates by coupling a theory of property takings and domestic institutions with battlefield casualty data drawn from the population of interstate wars over the last 200 years. We find conscription, like other non-market based property takings, to be a wasteful means of mobilizing military manpower. Volunteer armies suffer far fewer casualties than their conscripted counterparts. We also find that this effect compounds when it interacts with regime type. Volunteer democratic armies suffer especially few casualties. And while liberal democratic states typically do not use their conscripts as cannon fodder throwing men against fire in desperate efforts to win, we also find that democratic societies are willing to bear the costs of large scale commitments to maintaining state sovereignty and survival when targeted by authoritarian states, at times even in the face of certain defeat. These findings bring strong statistical evidence to bear on the debates surrounding regime type, military manpower, and state resolve.

Michael Horowitz, Erin Simpson and Allen Stam, “Domestic Institutions and Wartime Casualties,” unpublished paper. Available here.

July 02, 2007

Acemoglu, Bautista, Querubin and Robinson on Political and Economic Inequality and Growth

Abstract: Is inequality harmful for economic growth? Is the underdevelopment of Latin America related to its unequal distribution of wealth? A recently emerging consensus claims not only that economic inequality has detrimental effects on economic growth in general, but also that differences in economic inequality across the American continent during the 19th century are responsible for the radically different economic performances of the north and south of the continent. In this paper we investigate this hypothesis using unique 19th century micro data on land ownership and political office holding in the state of Cundinamarca, Colombia. Our results shed considerable doubt on this consensus. Even though Cundinamarca is indeed more unequal than the Northern United States at the time, within Cundinamarca municipalities that were more unequal in the 19th century (as measured by the land gini) are more developed today. Instead, we argue that political rather than economic inequality might be more important in understanding long-run development paths and document that municipalities with greater political inequality, as measured by political concentration, are less developed today. We also show that during this critical period the politically powerful were able to amass greater wealth, which is consistent with one of the channels through which political inequality might affect economic allocations. Overall our findings shed doubt on the conventional wisdom and suggest that research on long-run comparative development should investigate the implications of political inequality as well as those of economic inequality.

Discussion [Crossposted at Crooked Timber]

Tyler Cowen points to a very interesting new paper by Daron Acemoglu and his colleagues (PDF - it was here this morning, but this link isn’t working for me any more; see here for a slightly earlier version) on the relationship between political and economic inequality. Tyler’s gloss is that this provides general insights into the “meme” of whether economic inequality is bad for growth, and concludes that “at least from that data set, the real problem seems to be rent-seeking behavior through the political process.” Thus, unless I misunderstand him (which is possible; he may just be blogging in shorthand), he is saying that this paper provides significant evidence suggesting that economic inequality isn’t the cause of slower economic growth; instead, political inequality and rent-seeking are at fault.

This, however, isn’t how I read the paper. Acemoglu and his colleagues seem to me to be quite careful not to extrapolate broad conclusions about the general relationship between inequality and economic growth from their findings (they do believe that there are some important implications for the development literature, but that’s not quite the same thing). Instead, what they argue is that under conditions of weak institutionalization, some degree of economic inequality may be a good thing. Roughly speaking, their causal argument is that under these conditions powerful land-owners may serve as a counterweight to politicians who have access to the powers of a repressive state, preventing the latter from grabbing as much property to themselves as they would be able to otherwise. When economic inequality is lower, power is diffused among many actors, who can’t organize against the state as successfully because of collective action problems (here they borrow from Robert Bates’ research on Kenya).

This is a very interesting, and potentially very important result for the study of development, if it’s borne out elsewhere. However, its implications for the general meme that Tyler is talking about seems to be more limited. It’s likely to tell us interesting things about what is happening in countries where there is a more or less naked power struggle going on between different interests to define property rights etc. However, on the authors’ own interpretation, its relevance to countries where these struggles are more sublimated is at best uncertain. Acemoglu and his co-authors specifically distinguish their findings from previous work on the nineteenth century US South, where there is evidence of a strong link between economic inequality and growth. They suggest that the key difference between the two cases is their respective levels of political development (institutions in the South did place some constraints on what politicians could do that weren’t present in Columbia, thus vitiating the need for a countervailing force against the state).

In contrast, the relationship between inequality and economic outcomes appears to be different in strongly institutionalized environments such as the United States. Here, political institutions place certain constrains on politicians so that having an independent landed elite is not necessary as a check against politicians and does not necessarily create a tendency for better outcomes. Rather, and possibly consistent with the US evidence, in such environments greater inequality may have negative economic or political consequences (for example, in the extreme via “political capture,” capture,” as in Acemoglu and Robinson, 2006b, or Acemoglu, Ticchi and Vindigni, 2006) [quote from earlier draft - will update tomorrow if nec.]

Thus, the paper is really an argument about what we are likely to find in countries with more-or-less openly predatory states, not about economic inequality’s more general effects for growth. Regardless, this is an interesting and potentially very important paper that’s well worth reading.

Daron Acemoglu, María Angélica Bautista, Pablo Querubín, James A. Robinson, “Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia.” Unpublished paper. Available here.

Kazee on Walmart Welfare

One of the most notable changes in contemporary American social policy has been the shift in emphasis from the traditional welfare population to low-income workers and their families. I call this new network of antipoverty policies “Wal-Mart Welfare” for its implications for workers and their employers. What, then, explains variation in the level of support work support at the state level, and do employers play a role in these policy choices? This paper focuses on three policies that make up a state’s overall level of work support yet differ in significant ways: Medicaid, state earned income tax credits, and state minimum wages. In this preliminary analysis, I find that the politics of work support follow a predictable logic but that this not as simple as it first appears. Half of the states follow consistent patterns of high or low work support, while the other half offer limited support through an often unpredictable mix of policies. Regression analysis reveals that overall levels of work support are shaped largely by wealth and partisanship, though when the three policies are disaggregated, income is the only factor that consistently influences work support of all types. If employers play any role at all, it seems to be negative, which reflects divisions within the business community that are notoriously difficult to overcome. When isolated, the low-wage firms that are most likely to benefit from work support policies do not seem to be influencing policy choices. This suggests that historical, institutional, and ideological forces overwhelm the ability of low-wage firms to support government programs (at least on a large scale) even when they are in their material interest, and that policymakers don’t yet believe low-wage employers will mobilize in support of antipoverty programs in the future.

Nicole Kazee, “Wal-Mart Welfare?:State Antipoverty Policy and Low-Income Workers,” unpublished paper. Available here.