Archive for the 'Development' Category


Mark Kleiman on Mexico’s drug violence

Mark Kleiman has an interesting idea on how to fight Mexico’s drug violence.  It’s short enough to quote in full:

Drug-related violence has claimed 35,000 Mexican lives since 2006, and the level of bloodshed is still rising. With legalization not in the cards and an all-out crackdown unlikely to succeed, good options seem to be scarce.

Here’s a candidate, based on a strategy of dynamic concentration:

Mexico should, after a public and transparent process, designate one of its dealing  organizations as the most violent of the group, and Mexican and U.S. enforcement efforts should focus on destroying that organization. Once that group has been dismantled – not hard, in a competitive market – the process should be run again, with all the remaining organizations  told that finishing first in the violence race will lead to destruction. If it worked, this process would force a “race to the bottom” in violence; in effect, each organization’s drug-dealing revenues would be held hostage to its self-restraint when it comes to gunfire.

This is parallel to David Kennedy’s “pulling levers” strategy to deal with gang violence.

Would it work?  Hard to guess. But it might.  That’s more than you can say for any of the other proposals currently on the table.

It’s a nice idea, but it would probably suffer somewhat in the politics.  If, in order to ensure the downfall of the most violent gang, the government needs to divert resources from fighting other gangs, it may look to some as though they were going easy on crime in one area in order to fight it properly in another.  It could also be tainted with a brush of tacitly legalising the trade for all non-violent traffickers.  Still … cool idea.


Ayn Rand, small government and the charitable sector

The Economist’s blog, Democracy in America, has a post from a few days ago — “Tax Day”, for Americans, is the 15th of April — looking at Ayn Rand’s rather odd view of government.  Ms. Rand, apparently, did not oppose the existence of a (limited) government spending public money, but did oppose the raising of that money through coercive taxation.

Here’s the almost-anonymous W.W., writing at The Economist:

This left her in the odd and almost certainly untenable position of advocating a minimal state financed voluntarily. In her essay “Government Financing in a Free Society“, Rand wrote:

“In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary. Since the proper services of a government—the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.”

This is faintly ridiculous. From one side, the libertarian anarchist will agree that people are willing to pay for these services, but that a government monopoly in their provision will lead only to inefficiency and abuse. From the other side, the liberal statist will defend the government provision of the public goods Rand mentions, but will quite rightly argue that Rand seems not to grasp perhaps the main reason government coercion is needed, especially if one believes, as Rand does, that individuals ought to act in their rational self-interest.

The idea of private goods vs. public goods, I think, is something that Rand would have recognised, if not in the formally defined sense we use today, but I do not think that Rand really knew much about externalities and the ability of carefully-targeted government taxation to improve the allocative efficiency of otherwise free markets.  I think it’s fair to say that she would probably have outright denied the possibility of anything like multiple equilibria and the subsequent possibility of poverty traps.  Furthermore, while she clearly knew about and despised free riders (the moochers  in “Atlas Shrugged“), the idea of their being a problem in her view of voluntarily-financed government apparently never occurred to her.

However, this does give me an excuse to plump for two small ideas of mine:

First, I consider the charitable (i.e. not-for-profit) sector as falling under the same umbrella as the government when I consider how the economy of a country is conceptually divided.  In their expenditure of money, they are essentially the same:  the provision of “public good” services to the country at large, typically under a rubric of helping the most disadvantaged people in society.  It is largely only in they way they raise revenue that they differ.  Rand would simply have preferred that a (far, far) greater fraction of public services be provided through charities.  I suspect, to a fair degree, that the Big Society [official site] push by the Tories in the UK is about a shift in this direction and that, as a corollary, that Mr. Cameron would agree with my characterisation.

Philanthropy UK gives the following figures for the size of the charitable sectors in the UK, USA, Germany and The Netherlands in 2006:

Country Giving (£bn) GDP (£bn) Giving/GDP
UK 14.9 1230 1.1%
USA 145.0 6500 2.2%
Germany 11.3 1533 0.7%
The Netherlands 2.9 340 0.9%

Source: CAF Charity Trends, Giving USA, Then & Spengler (2005 data), Geven in Nederland (2005 data)

Combining this with the total tax revenue as a share of GDP for that same year (2006), we get:

Country Tax Revenue/GDP Giving/GDP Total/GDP
UK 36.5% 1.1% 37.6%
USA 29.9% 2.2% 31.1%
Germany 35.4% 0.7% 36.1%
The Netherlands 39.4% 0.9% 40.3%

Source: OECD for the tax data, Philanthropy UK for the giving data

Which achieves nothing other than to go some small way towards showing that there’s not quite as much variation in “public” spending across countries as we might think.  I’d be interested to see a breakdown of what services are offered by charities across countries (and what share of expenditure they represent).

Second, I occasionally toy with the idea of people being able to allocate some (not all!) of their tax to specific government spending areas.  Think of it being an optional extra page of questions on your tax return.  Sure, money being the fungible thing that it is, the government would be able to shift the remaining funds around and keep spending in the proportions that they wanted to, but it would introduce a great deal more democratic transparency into the process.  I wonder what Ms. Rand (or other modern day libertarians) would make of the idea …

Anyway … let me finish by quoting Will Wilkinson again, in his quoting of Lincoln:

As Abraham Lincoln said so well,

“The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves—in their separate, and individual capacities.”

Citizens reasonably resent a government that milks them to feed programmes that fail Lincoln’s test. The inevitable problem in a democracy is that we disagree about which programmes those are. Some economists are fond of saying that “economics is not a morality play”, but like it or not, our attitudes toward taxation are inevitably laden with moral assumptions. It doesn’t help to ignore or casually dismiss them. It seems to me the quality and utility of our public discourse might improve were we to do a better job of making these assumptions explicit.

That last point — of making the moral assumptions of fiscal proposals explicit — would be great, but it is probably (and sadly) a pipe dream.


Working hours in the OECD

Via Economix, here’s an OECD study of working hours by citizens of it’s member countries.  Here’s the relevant graph:

Much of it is as you’d expect from cultural stereotypes — Western Europe working the least, Japan and Mexico working the most — but I was a little surprised that Australia isn’t above average.  What’s striking — to me, at least — is that hours worked per day doesn’t seem to be a particularly good predictor of income per capita.  In fact, it’s interesting enough that I pulled the GDP per capita data from the OECD to do up a scatter plot:

There’s not much of a relationship at all (R-squared of 0.1) and to the extent that there is one, it’s negative — working more per day is associated with a lower income per capita.  Without Mexico (on the bottom-right), the R-squared drops to 0.04.

Time spent working per day doesn’t correlate significantly with growth rates in (real) GDP per capita, either (I’ve plotted it for 2006 to capture the state of the world before the financial crisis):

At least here the relationship, if you want to pretend there is one, is positive.


In today’s episode of Politically Dicey But Important Topics Of Research …

The newspaper article summarising the research: http://www.guardian.co.uk/science/2010/jun/30/disease-rife-countries-low-iqs

People who live in countries where disease is rife may have lower IQs because they have to divert energy away from brain development to fight infections, scientists in the US claim.

The controversial idea might help explain why national IQ scores differ around the world, and are lower in some warmer countries where debilitating parasites such as malaria are widespread, they say.

Researchers behind the theory claim the impact of disease on IQ scores has been under-appreciated, and believe it ranks alongside education and wealth as a major factor that influences cognitive ability.

[…]

The actual research article: http://rspb.royalsocietypublishing.org/content/early/2010/06/29/rspb.2010.0973.full?sid=f65fe5b5-b8d4-4e62-82ee-60c7bd44e3d3

Abstract

In this study, we hypothesize that the worldwide distribution of cognitive ability is determined in part by variation in the intensity of infectious diseases. From an energetics standpoint, a developing human will have difficulty building a brain and fighting off infectious diseases at the same time, as both are very metabolically costly tasks. Using three measures of average national intelligence quotient (IQ), we found that the zero-order correlation between average IQ and parasite stress ranges from r = ?0.76 to r = ?0.82 (p < 0.0001). These correlations are robust worldwide, as well as within five of six world regions. Infectious disease remains the most powerful predictor of average national IQ when temperature, distance from Africa, gross domestic product per capita and several measures of education are controlled for. These findings suggest that the Flynn effect may be caused in part by the decrease in the intensity of infectious diseases as nations develop.

For reference, the Flynn effect:  http://en.wikipedia.org/wiki/Flynn_effect

The Flynn effect describes an increase in the average intelligence quotient (IQ) test scores over generations (IQ gains over time). Similar improvements have been reported for other cognitions such as semantic and episodic memory.[1]  The effect has been observed in most parts of the world at different rates.

The Flynn effect is named for James R. Flynn, who did much to document it and promote awareness of its implications. The term itself was coined by the authors of The Bell Curve.[2]

The effect’s increase has been continuous and approximately linear from the earliest years of testing to the present. There are numerous explanations to the Flynn effect and also some criticism. There is currently a discussion if the Flynn effect has ended in some developed nations since the mid 1990s.


Thinking about Human Rights (and UNICEF)

Before I begin:  UNICEF has a campaign in the UK at the moment to raise awareness of children being denied their rights around the world.  You can see the homepage for the campaign here.  You can donate here.

Here are some things to keep in mind when thinking about human rights:

  • A right is a particular form of liberty.  It is the freedom to do something.
  • An obligation or mandate is the opposite of a right.  A right involves a conscious choice; thus the phrase “to exercise one’s right.”  If there is no choice available, there is no right.
  • One person having a right often implies denying another right from a second person.  Suppose that you work for me.  If I have the right to fire you, you cannot have the right to a guaranteed job with me.  If you have the right to go on strike, I cannot have the right to fire you for going on strike.
  • Sometimes having a right does not impede the rights of others.  A right to make use of a non-rival good is the classic example.
  • Exercising a right is not necessarily in a person’s best interest.  I have the right to gamble all of my money at a casino, but it probably wouldn’t be wise to do so.
  • Every decision of consequence for everybody, everywhere, is subject to a constraint of some kind.  There are only 24 hours in a day, the resources at your disposal are finite and, eventually, you will die.
  • If a person, operating under a constraint, chooses to not do something, it does not imply that their right has been denied to them.

These last two points, while logical, create problems for many advocacy groups.  Consider the woman who, subject to constraints in her finances and the wages on offer for various jobs she can perform, chooses to become a prostitute.  Consider the subsistence-farming family that, subject to constraints in it’s finances and the wages on offer for alternative work, chooses to keep it’s children away from school and working on the farm.

It is largely for this reason that many people advocate what they call “economic rights”.  Although there are various versions of this (e.g. minimum wages, the welfare state, etc.), you can think of them as a government, on behalf of the entire population, instituting a guaranteed minimum income.

Now, while there are strong moral arguments for such a guarantee (which I fully support and agree with), this is not a right.  This is a mandated transfer of income from high-income citizens to low-income citizens.  For the rich, it is an obligation (the opposite of a right) and for the poor, it does not directly increase the range of choices available to them.  Instead, it indirectly increases that range by relaxing one of their constraints.

I say again:  I fully support providing a minimum income to all people by means of a welfare state; nobody should live in poverty.  But this is not a right.  It is a moral duty.  Calling this an “economic right” is a deliberate obfuscation for marketing purposes.  People pay more attention and money when a person’s “rights” are being denied than when they simply have a moral obligation to help.

I love the work done by UNICEF. I think they are just about the best NGO on the planet. My wife and I donate money to them. They make an express point of telling you how much of the money you give will go to administration costs or to more fundraising.

I just wish they could raise those funds without confusing things by saying that Aklima’s right to education is being denied to her.  I recognise that they have to.  I just wish that they didn’t.