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Archive for the ‘Political Science’ Category

Libertarians often bemoan the expansion of the federal government over the centuries and cite Thomas Jefferson’s quotation, “The natural progress of things is for liberty to yeild [sic], and government to gain ground.” Of course, there have been important advances for liberty in the U.S. in the 20th and 21st centuries too, yet overall, government’s impact on the economy has increased dramatically. In his book, The Rise and Decline of Nations, political economist Mancur Olson theorized that the simple passage of time permitted the accretion of more and more interest groups (“distributive coalitions”), who would lobby government to increase their share of the economic pie at the expense of the total size of the pie. Therefore, more stable societies would see relative economic decline.

I have always been skeptical that the mere passage of time was an important predictor of interest-group power and bad economic policy. Indeed, all of Olson’s data came from the post-World War 2 period, and he had good things to say about France and Japan, particularly in relation to Britain, that do not ring true 30 years after he wrote the book.

However, as I investigate the economic history of early modern Europe, I am struck by what looks like a “law of political entropy,” that is, a tendency for relatively “associational” governments that act as agents for the taxpayer to become ossified, oligarchic, “predatory” states that exploit the taxpayer. Consider the Dutch Republic and Switzerland, probably the two most “associational” states in early modern Europe.

During the Dutch Golden Age, the highly decentralized federation acted as an agent of the provinces, who in turn were federated associations of the towns. The towns were ruled by the principal merchants. There was a semi-hereditary “stadtholder” position at the central level, demanded by the monarchical ideology of the day, but the real political power lay with the great taxpayers.In fact, during the period of the Republic’s most rapid economic growth, there was no stadtholder, just an elected “grand pensionary,” the proto-liberal Johan de Witt, who supported free trade, republicanism, and religious toleration, opposed imperialism and military meddling, and strongly endorsing the doctrine of provincial (and town) sovereignty over Republic-level control.

Unfortunately, after the French and English launched a combined sneak attack on the Republic in 1672, de Witt was overthrown and lynched, and the stadtholders returned. Although the Dutch escaped that war with their independence, over time the political system became more ossified, and by the end of the 18th century English GDP per capita had caught up with Dutch. According to Wikipedia,

At first the lower-class citizens in the guilds and schutterijen could unite to form a certain counterbalance to the regenten, but in the course of the 16th, 17th and 18th century the administration of the cities and towns became oligarchical in character, and it became harder and harder to enter their caste. From the latter part of the 17th century the regent families were able to reserve government offices to themselves via quasi-formal contractual arrangements. Most offices were filled by co-option for life. Thus the regent class tended to perpetuate itself into a closed class.

Similarly, Switzerland started off as an extremely loose confederation of republican cantons in the late Middle Ages (individual cantons could even declare war). The cantons themselves were originally established by peasants who had thrown out the Habsburg aristocracy, winning a bloody victory over their knights at the Battle of Morgarten:

When the Confederates attacked from above with rocks, logs and halberds, the Austrian knights had no room to defend themselves and suffered a crushing defeat, while the foot soldiers in the rear fled back to the city of Zug. About 1,500 Habsburg soldiers were killed in the attack. According to Karl von Elgger, the Confederates, unfamiliar with the customs of battles between knights, brutally butchered (more…)

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Having finally turned the corner on a brutal, 11-day (and counting) cold, I feel up to getting back to my blogging routine. First up: a followup to last month’s post, “Why So Little Decentralization?”

To review, that post posed a puzzle (a problem for political scientists to ponder, you might say). The puzzle is this: developing countries are far more centralized than developed countries. That is so despite the fact that some developing countries are much larger and more diverse than developed countries, and many of them have now been democratic for quite some time. Furthermore, if decentralization were simply a relict of post-medieval state-building (some might venture that sort of claim about Switzerland, for instance), then the fact that developing countries have lower state capacity and a more recent independence than almost all developed countries deepens the puzzle.

I went through two explanations that do not actually explain the puzzle very well: shallow local talent pools and illiberalism. In particular, they cannot explain why developing countries are often very decentralized along some dimensions (allowing discrimination against goods and workers from other regions, linguistic and cultural rights, etc.), but not others (chiefly tax policy).

I think there are two explanations that actually work: secession prevention (in ethnic federations) and excessively personalist electoral systems (in nonethnic federations). In this post I’ll talk about secession prevention.

Some developing democracies are ethnoregionally diverse, that is, they contain minority ethnic homelands that could form the basis of independent states. Examples include (more…)

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McCutcheon

There has been much coverage of last week’s Supreme Court decision on campaign finance (McCutcheon v. Federal Election Commission), most of it negative (insert shocked surprise here) given that it will provide more opportunities for the wealthy to shape public policy. As Senator Tammy Baldwin (D-WI) observes:

“It is far too often the case in Washington that powerful corporate interests, the wealthy, and the well-connected get to write the rules and now the Supreme Court has given them more power to rule the ballot box by creating an uneven playing field where big money matters more than the voice of ordinary citizens.”

Perhaps one should not be too quick to fault the “powerful corporate interests, the wealthy, and the well-connected.” They are only being rational. They clearly understand that there are largely two ways to thrive economically: (1) produce more of the things that people value or (2) seek a variety of policy-related privileges that allow you to lay claim to what others have produced and/or create impediments to what your competitors might produce. Over time, the second of these paths—rent-seeking or transfer-seeking has grown in importance in shaping economic outcomes. It is effective, often invisible, and the costs are borne by taxpayers and consumers. As long the elected officials of both parties are in the business of selling privileges, there will be buyers. The rent seeking society will thrive, even as it throttles growth and economic dynamism and contributes to our long-term fiscal problems.

One should not be surprised that the critique of the McCutcheon decision has begun to merge with the attack on the Koch brothers. This morning, a Google search for “McCutcheon and Koch” generates 364,000 hits (I am assuming this number will grow rapidly). Apparently, some believe the best way to frame the decision is to connect it to the Koch brothers, creating a compelling tale of a new plutocracy. (more…)

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I delivered this brief talk to a Model UN conference at Dartmouth on March 28. Here is the text of my remarks.
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My topic for tonight is “The Right to Self-Determination in International Law and Practice.” The right to self-determination is one of the most controversial concepts in international relations today. The government of Russia has cited it as a justification for its annexation of Crimea following a doubtfully free and certainly unfair referendum in that territory. The government of Catalonia has cited it in its effort to hold a truly democratic referendum on independence from Spain later this year. What does the right to self-determination mean in international law? And how well does international practice actually conform to international law?

The right to self-determination of peoples is found in the original United Nations Charter, which states among its purposes, “To develop friendly relations among nations based on respect for the principle of equal rights and self-determination of peoples, and to take other appropriate measures to strengthen universal peace.” The two original UN human rights instruments, the ICCPR and ICESCR, also guarantee the right of self-determination to “all peoples.”

But what is a “people”? That was left undefined. The UN developed a list of “non-self-governing territories” whose status was to be monitored. Originally, the right to self-determination for these territories was not meant to include a right to immediate independence. Article 73 of the original UN Charter merely provides that member states administering non-self-governing territories ensure their “political, economic, social, and educational advancement,” and assist the “progressive development of their free political institutions.”

In the 1940s and 1950s, anticolonial movements emerged in Africa and Asia to fight for immediate independence, and frequently faced stiff military opposition from their imperial masters. The major colonial powers gradually realized that they could not prevent many of their territories from claiming independence. Only in 1960 did the UN adopt the “Declaration on the Granting of Independence to Colonial Countries and Peoples.” This resolution affirmed that the right of self-determination meant that every non-self-governing territory was to have a chance to decide its own political status, whether integration with the metropole, a status of “free association” with the metropole, or independence.

The criterion for determining whether a territory belonged on the list for decolonization was that it be “geographically separate” and “distinct ethnically and/or culturally from the country administering it.” This criterion has come to be known as the “salt water test”: only if a territory is separated from its metropole by salt water does it have the right to self-determination under international law.

Clearly then, the right to self-determination under international law was never meant to be applied to secessionists in the classic sense. It was a tool for decolonization. This fact does not mean that secession is illegal under international law, only that member states of the United Nations are not required to give secessionist regions the opportunity to determine their own political status. Russia’s justification for its forcible seizure of Crimea is therefore wrong.

International law itself is merely the creation of the governments that happen to exist on the globe. It would be surprising if existing governments were to set up a legal framework for their own dissolution. The “salt water test” is morally arbitrary, and it does not seem to have any rationale in conflict prevention or reduction.

There is another concept of the right to self-determination: a moral concept. Last year, (more…)

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With the ongoing tension over Russia’s annexation of Crimea, now would be a good time to talk about the biggest myths people believe about the origins of secessionist movements around the world (even though Crimea is a case of irredentism not secessionism).

  1. Myth: Secession is contagious. Back in the 1990s, journalists worried a lot that the disintegration of the Soviet Union, Czechoslovakia, Yugoslavia, and Ethiopia heralded some broader worldwide trend toward the splintering of the state. Even some scholars indulged talk of our “neomedieval” future of microstates. Now, with secession referendums in Scotland and Catalonia on the docket, a secessionist party gaining support in Quebec, that online referendum in Veneto, and recent events in the post-Soviet space, I’m seeing similar questions about whether this is a new “trend.”

    Fact: Secession happens because of particular circumstances, not contagion. Scholars have looked at the evidence every which way, and in no case have they found evidence that secessionism spreads from country to country. The classic piece here is Ayres and Saideman (2000). I have also looked at the data in detail. The most one can say is that: 1) if a country has more secessionist movements, then any given ethnic group or region in that same country is more likely to become secessionist; 2) if an ethnic kin group in a neighboring country is secessionist, then an ethnic group is more likely to become secessionist (e.g., Kurds in Turkey, Iraq, Iran, & Syria); and 3) governments may worry somewhat about the precedents they establish when recognizing successful secessions (see Coggins (2011) – one example is Spain’s refusal to recognize Kosovo).

  2. Myth: Secession is an exercise of the right to self-determination enshrined in international law. Would-be secessionists sometimes point to the UN Charter’s statements on self-determination to argue that their central governments are legally bound to recognize their claims.

    Fact: The right of self-determination was never meant to apply to secessionists in the classic sense. The UN Charter did not originally affirm a right to self-determination as against existing states. Only in 1960 did the UN General Assembly pass a resolution authorizing independence for colonial peoples. Since that date, the UN has maintained a list of “non-self-governing territories” with a right to self-determination, that is, a right to determine their own status by plebiscite, whether independence or autonomy. Some of these, like Puerto Rico, have opted for autonomy. Still, the right to self-determination in the UN Charter and in international law was meant only to apply to cases of decolonization, and to cases of secession in which the right to colonial self-determination had not been recognized (as in East Timor, which Indonesia had conquered after its withdrawal from the Portuguese Empire). What counts as a colony? The “salt water test” applies: a territory is a colony/non-self-governing territory only if it is separated from its metropole by sea. According to UN Resolution 1541, a colony is “a territory which is geographically separate and is distinct ethnically and/or culturally from the country administering it.” This may be an arbitrary criterion from many perspectives, but it is the standard in international law.

  3. Myth: A distinct ethnic or cultural identity is what determines whether a region will host a secessionist movement. I cannot count the number of times I have seen Internet commenters casually assert that because Crimea is majority ethnic Russian, it must have a majority in support of joining Russia. The notion that a separate ethnic identity in a region causes secessionism there is widespread among laypersons.

    Fact: Although a separate ethnic identity is close to a necessary condition, the economic and political benefits of independence are what determine whether a region will host a secessionist movement. Plenty of ethnically distinctive regions do not host secessionist movements. In Belgium, Dutch-speaking Flanders is fairly secessionist, but hardly anyone in French-speaking Wallonia wants to secede. Flanders would benefit economically from independence; Wallonia would not. In India, hardly anyone in the Dravidian states of the south wants to secede, even though they are different linguistically, phenotypically (“racially”), and even religiously from the Hindi-speaking Hindus of the north who constitute the “ethnic core” of the Indian state. In the former Soviet Union, ethnocultural distance from the Russian majority was inversely related to strength of secessionism, with secessionism weakest in the majority-Muslim central Asian republics and strongest in the Baltics, Armenia, and Georgia. Not coincidentally, the central Asian republics were heavily dependent on Soviet subsidies.

  4. Myth: If every ethnic group had a right to secede, we would very quickly end up in a world with 10,000 independent microstates. This misconception is even common among academics.

    Fact: The vast majority of ethnic minorities around the world have no interest in seceding from their existing governments. This one is a myth for the same reasons that #3 is a myth. Even when we look solely at populous ethnocultural minority groups regionally concentrated in a historic homeland, of which the Minorities at Risk dataset counts 283 in the world, only about 38% of them have a secessionist movement of any kind, and most of those are small. Very few ethnonational minorities would vote for independence even if they were allowed to do so. In India, secessionists call for boycotts of federal elections. Yet in only one state with a secessionist movement, Jammu and Kashmir, do a majority of eligible voters actually fail to vote — and even in that state, my own research suggests a ceiling on secessionist support of about 20% of the population.

  5. Myth: Federalism is a good alternative to secession. Scholars and politicians in Western democracies often propose federalism or decentralization as a solution to secessionist pressures or conflicts. And indeed, a secessionist rebel group is unlikely to lay down arms without some kind of compromise on regional autonomy. But does federalism actually work well to prevent growth in secessionism?

    Fact: There is no solid evidence that decentralization reduces secessionism or the future risk of conflict, and federalism in the developing world is often very poorly designed. Will Kymlicka’s piece, “Is Federalism a Viable Alternative to Secession?,” is a useful starting point on this question. Even though Kymlicka is not an empirical political scientist, his comparative reflections on Canada and the U.S. get him a long way. The quantitative literature does not support any general relationship between federalism and ethnic conflict or secessionism, even though one can find individual pieces on one side or the other of this issue. The basic problem is that both secessionists and central governments face incentives to undermine federalism, and as a result, neither side will trust the other. Federalism is a particularly beside-the-point proposal in situations in which an ethnic minority faces off against a highly nationalistic and chauvinist ethnic majority, as in Sri Lanka, or in dictatorships in which constitutional bonds are particularly flimsy, as in Serbia under Milosevic or China today. Federal institutions will be unstable, and the ethnic minority will not trust them. Independence may be the only solution for preventing future conflict in such cases.

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Today Vladimir Putin signed a treaty with the self-styled independent government of Crimea, annexing Crimea to Russia. I did not see this coming. It is an unprecedented deviation from the post-World War 2 international norm that force and the threat of force shall not be used for conquest. Article 2 of the United Nations Charter states: “All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.” When Saddam Hussein invaded and annexed Kuwait to Iraq, the UN Security Council swiftly and unanimously approved sanctions, and when Hussein did not withdraw, authorized the use of force to expel his forces. Other de facto annexations have happened — Russia has occupied Abkhazia, South Ossetia, and Transnistria, and Armenia has occupied Nagorno-Karabakh — but in none of these cases has annexation been formalized. There have been other conflicts over disputed territory — China-India, Somalia-Ethiopia, and Britain-Argentina, for instance — but in all these cases there was a legitimate dispute over proper ownership of the territories involved. By contrast, Russia had previously guaranteed to respect the territorial integrity of Ukraine, in exchange for obtaining the latter’s nuclear weapons. Finally, all secessions between 1945 and 2007 were widely recognized only with the consent (however begrudging) of the rump state. Kosovo’s independence was an important — some would say “dangerous” — deviation from this pattern in 2008.

Russia’s annexation of Crimea therefore sets a dangerous new precedent. It threatens to return the world to an environment in which the “strong do what they can, and the weak suffer what they must,” with adverse repercussions not just for Russia and Ukraine, but for the whole world. Russia under Putin bids fair to become a pariah state.

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Many scholars (for instance) have noted a trend around the world of greater decentralization, at least on certain dimensions. Many non-federal, unitary states have tried to devolve some spending and decision-making authority on local or regional governments. Virtually every democratic government nowadays at least feigns some interest in decentralization.

Yet what strikes me is how little decentralization there has been, especially in the developing world. Some developing democracies that are sometimes described (or describe themselves) as “federal” or “semi-federal” include Mexico, India, Indonesia, Brazil, Argentina, Venezuela (before it went authoritarian some time in the 2000s), South Africa, Malaysia, Pakistan, Iraq, Nepal, and Nigeria. Yet none of these countries, other than Mexico, affords its constituent state or regional governments autonomy commensurate with that found in federal and semi-federal “Western liberal democracies” like Spain, Canada, the U.S., Switzerland, Belgium, Germany, Austria, Australia, and Italy. For instance, in Brazil, states do not have exclusive powers, and the federal government may overrule any state law with its own legislation. In India, the federal government may suspend state governments from operating at all and impose “President’s Rule.” Of all developing democracies, only India, Mexico, and Brazil routinely allow subcentral governments to raise significant revenue through autonomous taxation policies. (I count 9 Western democracies with such fiscal autonomy.)

Some of these developing countries are both huge and ethnically and regionally diverse, India and Indonesia most notably. One might think that these governments would have even more reason to decentralize than would the governments of comparatively homogeneous Western democracies. Therefore, the relative lack of decentralization in developing countries remains a puzzle.

One explanation might be the smaller talent pool in developing countries. Decentralization might not be feasible because uneducated or politically unsophisticated local officials require close supervision from a small cadre of Western-educated central administrators. While this explanation might have some weight in very poor democracies like Mali (before the recent coup), it likely does not apply to the majority of the cases just mentioned. If the talent pool in developing democracies were desperately shallow, then small developing democracies should have little state capacity plus all the adverse sequelae political scientists typically attribute to state weakness. Yet many small democracies in the developing world have performed fairly well: Costa Rica, Jamaica, Trinidad, Botswana, Mauritius, and Namibia, not to mention Slovenia and the Baltic republics in central and eastern Europe. There is no obvious positive relationship between country size and economic or political performance in the developing world.

Furthermore, many of the cases just mentioned do boast significant decentralization along some dimensions. For instance, India and Indonesia lack a unified internal market, allowing local and state or provincial governments to impose trade barriers on products from other regions. This is an economically perverse form of decentralization and one that has been nearly stamped out in the West, apart from certain discriminatory government procurement regulations. In addition, many developing democracies feature significant decentralization of expenditures: local and regional governments control significant budgets, but those budgets are funded by central grants, and most policy authority lies with the center. This set of policy choices is also likely economically perverse, as “vertical fiscal imbalance,” whereby subcentral governments depend heavily on grants or mandatory revenues from the center, tends to encourage fiscal irresponsibility. In Argentina in the 1980s and 1990s, provincial governments established their own banks, which were forced to lend money to those governments, leading to repeated fiscal crisis.

Another explanation might be that there is something about the Western liberal tradition of political philosophy that encourages decentralization. Many developing democracies fit within the category of “illiberal democracies,” where majorities use their political power to trample the rights of minorities. Sri Lanka might be just such a country, where the Sinhalese majority has repeatedly refused to countenance significant autonomy for the Tamil minority, and the central government fought a brutal civil war against Tamil rebels, complete with vast numbers of civilian killings and other human rights violations.

There may well be something to this explanation, but there are also hazards. As Vito Tanzi noted (PDF), demand for decentralization rises with size of government. A nightwatchman state can afford to be centralized because no one really cares about who controls it. Developing countries have bigger governments than Western democracies, not in the government spending as a share of GDP sense, but in the sense that the distribution of resources in such societies is more elastic with respect to the distribution of political power. So demand for decentralization should be higher there. True, the constraint might instead be supply: the views of political leadership in such societies. But then why the “perverse” decentralization in some countries?

To examine the extent and form of decentralization in developing democracies, I have, with the help of University at Buffalo Ph.D. student Govinda Bhattarai, developed a new dataset of regional self-rule in consolidated democracies worldwide. The coding scheme extends that introduced by Liesbet Hooghe, Gary Marks, and Arjan Schakel for Western democracies and various postsocialist European countries. Without going into details here, I will simply note that we coded the scope of policy powers of subcentral governments, the scope of taxation powers of subcentral governments, the local electoral accountability of subcentral officials, and the ability of the central government to veto subcentral laws.

Using those indicators, I then construct two higher-level, multiplicative indices of economic self-rule and political self-rule. Economic self-rule takes into account political self-rule as well as the tax autonomy of subcentral governments. Economic self-rule ranges from 0 (none) to 48 (maximum). Political self-rule ranges from 0 (none) to 16 (maximum).

The scatter plot below shows regional self-rule on the economic (Y axis) and political (X axis) dimensions in 2006, the latest year for which data on regional self-rule in the Hooghe, Marks, and Schakel dataset are available (our data go to 2010, however). Each observation in this plot is a type of region: either a particular region with its own autonomy statute (like Aaland in Finland or Scotland in the UK), or a type of regional government with the same autonomy arrangement (like states in the U.S. or in India).

economic & political self-rule(You can click the image to get a better view.)

Look at how few (more…)

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Russia’s annexation of Crimea, de facto or de jure, is likely to spur violence in the peninsula. “Crimean Tatar representative” in Lviv, Ukraine Alim Aliyev is quoted as saying, “Tatars will launch a guerrilla war against the Russian forces if they do not pack up and leave the region.” While he could be communicating a mere bluff, I wouldn’t count on it, and I doubt Putin will either. Crimean Tatars currently have a low risk of secessionist insurgency, because they are just 12% of the region’s population, but they also see themselves as the indigenous population of the region and deny any other ethnic group’s claims to a homeland in the region. For those reasons, and because of a history of repression at the hands of Stalin, Crimean Tatars support Ukrainian sovereignty over Crimea and reject the small ethnic Russian majority’s claims. If Russia effectively annexes Crimea, Tatar violence is likely to flare up. While the massive Russian military will be able to crush organized resistance, I doubt Putin wants to create another Chechnya, with the attendant risks of future terrorist attacks on Russian civilians.

Steve Saideman and Bill Ayres’ research suggests that irredentism is rarely consummated because it requires an infrequent coincidence of interests: a minority that wants to be rescued and a powerful state willing to pay costs to rescue it. Rescuing Crimea is likely to have significant long-term costs for Russia, and if Putin acts rationally, he will prefer a negotiated settlement permitting a military withdrawal from the peninsula over any kind of annexation.

In other news: the Crimean referendum will have two options: annexation by Russia and independence. Rejecting both and remaining within Ukraine is not an option for voters.

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Gazeta.pl reports that the majority of the Crimean parliament did not vote in favor of a referendum on independence, but that armed men prevented a quorum from attending, allowing a pro-Russian rump to pass the measure. (For my translation, I am relying on Jacek Rostowski on Twitter.) In eastern Ukraine, pro-Russian crowds face determined Ukrainian nationalist, pro-Maidan forces.

Russia’s military occupation of Crimea should not be taken as evidence of autochthonous secessionism. Instead, Russia seems to be using a minority of secessionist diehards to serve as an excuse for, possibly, annexing Crimea de facto to Russia, in more or less the same way as it did with Abkhazia and South Ossetia after the Russian-Georgian war of 2008. The main differences between that episode and this one are that Abkhazia and South Ossetia had already established de facto independence, and Georgia initiated the conflict with Russia. Thus, Russia’s intervention in Crimea is a riskier gamble. It may indicate, however, just how threatened Russia feels by a future in which Ukraine joins the EU and perhaps even NATO.

Update: TAC’s Dan McCarthy plausibly argues that Russia would prefer to use its military control over Crimea as a bargaining chip to ensure a subservient Ukraine.

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The Risk of Civil War in Ukraine

The government and the opposition in Ukraine have begun to shoot each other, leading to 26 deaths overnight. The Ukrainian army is being mobilized, and protestors have started to storm police stations and arm themselves. Could Ukraine be facing civil war?

Several factors point to a high likelihood of civil war. The first is the existing violence. Most civil wars are preceded by low-level internal violence. On the other hand, only a minority of armed conflicts with at least 25 battle deaths eventually escalate to civil war intensity (at least 1000 battle deaths). Still, the Libyan and Syrian civil wars provide recent examples of mass protests that escalated to armed conflict and then to civil war.

The second factor suggesting high violence risk is that rebels have a geographic base in the west of Ukraine. Some reports hold forth that the Lviv region has “declared independence” from Ukraine, but this is misleading. The Lviv regional council has declared sovereignty over its territory to the exclusion of the Ukrainian central government, but it is apparently open to reconciliation if a negotiated solution can be found. Still, when rebels have support of local political authorities, they are far more capable of inflicting large-scale damages on the government, because they have access to police weapons and, even more importantly, tax revenues.

The third factor suggesting high risk of escalation is external involvement. Russian support of the Ukrainian government will diminish rebel capability, but the European Union is preparing sanctions against the Ukrainian government. It is easy to imagine that Russia would send troops to assist the Ukrainian government if necessary; it is inconceivable that NATO or individual European governments would send troops to assist the rebels. Thus, the likelihood of external involvement tells more in favor of Ukrainian government capability than rebel capability. Still, what matters for conflict escalation is not necessarily preponderance of capabilities as such, but asymmetric information about capabilities. If the Ukrainian government is wrong (or the opposition thinks they are wrong) to think that Russia will send troops, it may take a harder line than necessary to reach an agreement that the opposition could countenance – and so far this indeed seems to be happening, as from all reports Yanukovych is not taking negotiations very seriously.

Nevertheless, several factors diminish the likelihood of civil war. One of the factors diminishing the likelihood of civil war is that ideological and ethnic divisions in Ukraine, while serious, are not truly deep as in multiethnic or multireligious societies like Burma, Lebanon, and Syria or highly unequal, sharply ideologically polarized societies like Venezuela, Colombia, and Bolivia. It is extremely unlikely that any region of Ukraine will actually try to secede (save perhaps Crimea’s ethnic Russians), and no Marxist-Leninist insurgency is on the cards either.

Ukraine is a relatively well-off country, and GDP per capita is one of the strongest factors associated with civil peace. That association likely reflects something about institutional quality, rather than affluence as such. Ukraine’s institutions are fragile and contested, but not collapsed as in much of sub-Saharan Africa.

Finally, (more…)

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I always find polls to be interesting. In my mind, one of the more fascinating things is when there is a large disjunction between individuals’ assessment of X (e.g., the environment, crime, education, the economy) as they experience it and their assessment of X as the nation experiences it. I often attribute the differences to the simple fact that the latter question is strongly influenced by the way in which X is portrayed by the media and political elites. One might be satisfied with the environment as one experiences it at home, for example, but the media provides heavy coverage of environmental catastrophes, oil and chemical spills, etc.

In the latest NBC/WSJ Poll (results here), 61 percent report being very/somewhat satisfied when asked to assess their “own financial situation today.” At the same time, when asked “how satisfied are you with the state of the U.S. economy today?,” only 28 percent say they are very/somewhat satisfied. 71 percent claim to be dissatisfied (37 percent somewhat dissatisfied, 34 percent very dissatisfied).

Another question: how well is the economy working for different types of people? Fully 81 percent believe it is working very/fairly well for the wealthy whereas only 22 percent believe it is working very/fairly well for the middle class. There is an obvious tension here, given that “middle class” is the modal category and a majority (71 percent) is very/somewhat satisfied with the economy as they experience it. Similar to the earlier example of the environment, one might hypothesize that the disjunction is a product of the way in which the economy is portrayed in the media and by political elites. (more…)

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Thomas Carsey and Geoffrey Layman in The Monkey Cage:

The Pew Research Center for the People and the Press reported on June 10, 2013 that the percentage of Democratic identifiers who found NSA surveillance programs acceptable increased from 37 percent in January 2006 to 64 percent in June 2013. In contrast, the percentage of Republican identifiers saying these programs were acceptable decreased from 75 percent to 52 percent over this same time period. We doubt these changes emerged from a large influx of anti-surveillance advocates into the GOP or of pro-surveillance supporters into Democratic ranks between 2006 and 2013. Rather, the shift likely occurred because we had a Republican president in 2006 and a Democratic president in 2013, and many people simply adjusted their views on NSA activities to fit with their prior partisan attachments.

It’s a good thing these people are deciding how my life will be run.

HT: Chris Andrew

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That’s the title of a very good article by Princeton political scientist Carles Boix and J.C. Major. The article provides background to the Catalan self-determination movement but also discusses recent developments and the reasons for them. One takeaway is the enormous role that the Spanish government’s response to the last Catalan autonomy statute, essentially gutting it, played in provoking the growth of the independence movement. As I noted in a piece in Electoral Studies 10 years ago, when the central government spikes decentralization, secessionists strengthen, but when a referendum on independence or autonomy fails (the failure being internal rather than external in origin), secessionists weaken. The article also contains important information on what the Catalan government plans to do if the central government forbids it to hold a referendum, as seems likely. I won’t spoil it; just read the article.

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Dani Rodrik, the political scientist’s favorite economist, argues for a limit to globalization in his recent book Globalization’s Paradox. The LSE EUROPP blog has a nice little summary of the book’s argument:

  1. Markets require a wide range of non-market institutions (of regulation, stabilisation, and legitimation) in order to work well and remain socially sustainable.
  2. These institutions do not take unique forms, in the sense that ultimate goals such as efficiency or stability can be achieved under a variety of designs and blueprints.
  3. Different societies, organised around their own states, have patently different needs and preferences regarding the shape that market-supporting institutions can take.
  4. A world that is sufficiently responsive to democratic preferences will therefore be one of institutional diversity and heterogeneity rather than institutional harmonisation and convergence.
  5. Since institutional diversity inhibits the global integration of markets by raising transaction costs across jurisdictional boundaries, a world that is sufficiently responsive to democratic preferences will also be one that falls short of full globalisation.

The idea is that it is desirable to have different countries have different regulatory schemes, but full globalization demands complete harmonization of regulation in order to minimize transaction costs. Exporters and investors want to face the same regulations abroad as they do at home. Some of the premises of the argument are incorrect, but I actually agree with the conclusion for different reasons. First, the problems with the premises.

Premise #1 is disputable to some extent. It’s stated broadly enough that these “institutions” could be social or governmental, and the governmental institutions could be nothing more than enforcing appropriate rules of appropriation and exchange. Yet I suppose Rodrik means something more by the statement, as illustrated by his example of financial regulation. The sparer those institutions within which markets need to be embedded, the more harmonization is possible and desirable even if the rest of the argument is right.

Premise #3 is deeply problematic. It’s just not appropriate to speak of societies having “preferences,” and it’s even more naive to think of democracy as somehow translating those preferences into law. If the only reason for retaining national economic sovereignty is that the latter might permit different “societies” to enact their “preferences” into law, then the case is very weak.

My argument for an outer bound to globalization would be more contingent. Taking everything into account, the scales seem to tip against harmonization when: 1) different national approaches can give us better information about what works, rather than enshrining a subpar approach into law, 2) regulatory arbitrage allows better rules to develop, ultimately yielding harmonization but not through a centralized process, 3) smaller polities are less likely to be influenced by “insider” interest groups than some multilateral institution tasked with harmonizing regulations, or 4) citizens perceive globalization as a threat to sovereignty that they value, and therefore respond to harmonization attempts with a stronger backlash against globalization more broadly (Rodrik does address this last consideration in his book). Sometimes multilateral harmonization is justified and sometimes not; it depends on the balance of considerations. For instance, harmonizing customs rules, as was agreed recently by the WTO trade ministers in Bali, seems harmless.

Ultimately, I think Rodrik is pushing on a string. There is little risk that harmonization will go “too far,” given the extremely decentralized nature of global economic governance. And I disagree with Rodrik that globalization has gone about as far as it needs to go, and now requires defense from its own advocates. For instance, the West can do much more to repeal agricultural trade barriers that kill poor people around the world.

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Ross Tilchin writes up the results of a Brookings study on libertarians in the Republican Party, citing some of the research I have done here on Pileus. The main point Tilchin argues is that libertarians are at a severe disadvantage nationally within the Republican Party, relative to competing constituencies like moderates and the religious right. However, see also David Kirby’s rejoinder at Cato@Liberty. He argues that the Brookings study seriously underestimates the proportion of libertarians in the general population and in the Republican Party. The debate seems to turn on how strictly one wants to operationalize the concept “libertarian.” If weak libertarians are included, there are many more of them. Regardless, I echo Kirby’s appreciation of growing scholarly attention to the political role of libertarians in the U.S. polity.

For more on figuring out where libertarians are, also check out an interesting paper on two-dimensional ideological preferences at the congressional district level by Warshaw and Rodden. (Americanideologyproject.com is an interesting site for data on one-dimensional preferences at the subnational level in the U.S.)

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Twenty years after its establishment, the World Trade Organization finally reached its first global trade deal last night at the meeting of the world’s trade ministers in Bali. The successful agreement foiled expectations that this meeting, like all others of the Doha Round, would end in failure and acrimony. Media outlets have been reporting the Peterson Institute’s estimate of $1 trillion in higher global output as a result of the deal, but what’s most interesting about the deal is that it happened only because the member states decided to focus on a narrow slice of the issues under discussion in the Doha Round. The deal focuses mostly on streamlining customs procedures to facilitate timely cross-border transportation, along with measures to eliminate tariff and quota barriers against exports from “least developed countries” to richer countries, to reduce agricultural export subsidies (here the deal merely makes a “strong political statement” and doesn’t require specific changes in law), and to permit developing countries’ governments to stockpile food.

Why did it happen? Ten days ago, after talks in Geneva, WTO head Roberto Azevedo warned that global trade talks would collapse if ministers did not narrow down the scope of their deliberations to issues on which consensus was achievable. Global trade talks have been bogged down over the last 20 years over severe distributional issues: developing-country governments want sharp cuts in rich-world agricultural subsidies, tariffs, and quotas, while rich-country governments want their poorer counterparts to cut trade barriers on services, beef up intellectual-property enforcement, and liberalize foreign investment. None of those big issues were solved in Geneva and Bali. A narrow deal on customs procedures happened because the distributional and enforcement issues here are far less severe. Few governments have any interest in holding up traffic at the border longer than necessary. Simplifying customs procedures is more like a coordination game than a Prisoner’s Dilemma: everyone benefits if forms are standardized and simplified. Rich-country governments also promised poor-country governments help with hiring customs officials to help speed up processes.

The conventional wisdom in international relations is that a broad scope of issues helps international organizations solve distributional problems, all else equal, because broad scope makes it easier for governments to trade off gains to one side on one dimension with gains to the other on another dimension. But all else was not equal here: some issues faced much lower distributional conflict than others, and on those it was relatively easy for governments to reach agreement. They chose to go for a small deal rather than a big one because, frankly, the WTO needed a win. Another collapse of talks would have called into question whether multilateral trade liberalization is even possible.

This deal does not end the Doha Round. Talks will continue on the “big issues” mentioned above. This is fortunate, since the Bali deal does little to reduce the extent to which U.S. and European agricultural policies kill poor people. While the deal helps with market access for least developed countries, essentially all rich countries have already implemented duty-free, quota-free access for these countries’ exports, and least developed countries contain merely 12% of the world’s population and less than half of those living in extreme poverty. There need to be binding legal limits, actionable before the Dispute Settlement Body, on agricultural subsidies, quotas, and tariffs in rich countries.

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In the third and final part of my series summarizing my working paper, “Designing a Constitutional Right of Secession” (here are parts one and two), I examine the legitimate objections we can raise to a right to secede. Some of these other scholars have previously mooted, while others are apparently original. Regardless, I will argue that all of these arguments merely establish reasons to qualify the right to secede, rather than to abolish it altogether.

Strategic Demarcation of Territory

When secessionists can determine the territory subject to a referendum, they can include as much territory as they feel confident getting away with, while still winning a referendum. They may include territory dominated by opponents of secession, so long as the rest of the people living in the seceding unit can outvote them.

One way of dealing with this problem is to allow recursive secession: territories that oppose secession can themselves secede from the seceding state. Indeed, that may be a good idea, although it poses some risks: the central government could use recursive secession as an excuse to attack a secessionist state, and there will always be controversies about where boundaries should lie. What if secessionists don’t permit recursive secession? Simply banning secession altogether wouldn’t make sense as a response, since that would violate the rights of the many to safeguard the rights of the few.

A better solution is to limit the right of secession to top-tier geographical subunits of the state. Now, there are some problems with this solution as well. First, administrative boundaries may be morally arbitrary, just like
interstate boundaries. Second, relying on administrative boundaries to set the limits of regions that enjoy the right to secede gives central governments an incentive to manipulate administrative boundaries to dilute potential secessionist challenges. Third, allowing regions to secede along existing administrative boundaries may trap significant minorities within the new state. These are all very real problems, as Yugoslavia’s attempted recursive secessions demonstrate. The secession of Croatia trapped Serbs, and the secession of Bosnia trapped both Croats and Serbs. The Badinter Commission denied these groups a recursive right of secession, and therefore they saw their only option as war combined with ethnic cleansing to alter ethnic balances.

So the administrative-boundaries solution works best if there’s a good procedure for letting people decide to which region they will belong. There should be an easy way for people to secede by referendum and set up new administrative regions. It should also be easy to hold referendums in small areas on moving from one region to another. Had Yugoslavia followed these principles, Serb-majority areas of Croatia and Bosnia would not have been part of Croatia and Bosnia, respectively, at all, and there would have been no reason for war.

Even when there are no good procedures for making sure administrative boundaries line up with what people on the ground want, it is better to make existing regions the subjects of a legal right to secede than to allow secessionists or the central government to redefine the scope of the territory subject to secession without the agreement of the other side.

Irredentism

Irredentism refers to movements seeking to take territory from one state and give it to another. Irredentism needs to be regarded more skeptically than secessionism, because irredentism has often been a cause of war among states, including both world wars. Regional irredentists often instigate violence to try to draw in their “parent” state.

Legalizing irredentism by plebiscite would encourage states to meddle in each other’s domestic politics in hopes of boundary revisions. Instead, irredentism can usually be alleviated with generous autonomy, as has occurred in Aaland and South Tyrol. Where irredentism cannot be satis ed with autonomy, such as where the irredentist group is a minority in the disputed region (e.g., Northern Ireland), then a solution will be more difficult, and the states involved may not wish to rule out completely a future transfer of sovereignty. In most cases where a secessionist movement has irredentist potential (e.g., Nagorno-Karabakh), it is reasonable to impose a conditions on a right to independence that the new state will never be allowed to join its ethnic-kin state, that the new state will be demilitarized, and so forth.

Vague Referendum Questions

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Does a civil war in Mozambique significantly affect my interests? I say no. Most of my students seem to think yes. On my intro IR final essay exam, I asked a question about what the theory of hegemonic stability would predict about future environmental and human rights politics. I wanted to see whether students could differentiate between the public-goods characteristics of those two sets of issues. The theory of hegemonic stability says that the existence of a global hegemon is a necessary condition for the provision of global public goods.

To review, a public good is a good that is non-excludable for all those who enjoy it. In other words, you can’t exclude a non-contributor (“free rider” in the jargon) from enjoying the benefits of the good. (There’s also a non-rivalrousness condition, but it is irrelevant to the “problem” of public goods.) Because it is non-excludable, people have an incentive to free ride, and the good won’t generally be provided unless individuals can be somehow coerced or otherwise incentivized to contribute. Since the world is an anarchy, there is no power that can coerce sovereign governments to contribute to global public goods. But if there is one very large, powerful state in the world, it may derive disproportionate benefits from the public good, making it willing to contribute something (probably still less than optimal) toward its provision.

So are there any global public goods? I think so. Preventing the ozone hole is a pretty clear example. CFC emissions depleted the earth’s ozone layer, resulting in more harmful ultraviolet radiation on the earth’s surface. Everyone in the world derived significant benefit from banning CFC emissions, but individual countries had no incentive to enact bans on their own, so the U.S. government successfully led the way toward global cooperation in banning CFCs.

But what about human rights? If a government is repressing its subjects — killing them extrajudicially, torturing them, “disappearing” them without trial — are subjects of other governments harmed as well? Possibly. Repression might create refugee flows across borders, or raise the risk of a civil war that could threaten neighboring states. More instability might reduce economic output, marginally negatively affecting trade relations and prosperity in other countries. But at most, human rights protection is a regional public good, not a global one. Moreover, the “externalities” (spillovers) are small relative to the direct, private benefits of human rights protection. The people who lose the most from repression, by far, are those actually being repressed.

Since human rights protection is not a global public good, the existence of a hegemon should make no difference as to whether the good will be provided. Currently, the U.S. government does take an interest in protecting human rights abroad, via the “responsibility to protect” doctrine. (Cynics may say the U.S. takes more of an interest in protecting human rights abroad than it does protecting them at home.) Would China do the same if it were hegemonic? Doubtful, to say the least. Moreover, while the U.S. still enjoys military hegemony around the globe, it is not even close to being an economic or demographic hegemon, so its military hegemony is unlikely to explain the government’s interest in promoting human rights abroad.

The broader lesson: the mere fact that something is a good, even a normatively desirable good, does not make it a public good, one subject to market failure.

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The Government of Scotland has just released its 600-odd-page white paper on independence in advance of the September 18, 2014 referendum on the question. First Minister Alex Salmond and the rest of the pro-independence side have their work cut out, with the latest poll showing a 47-38% plurality in favor of “No.”

In part, the white paper aims to show that independence would not harm the Scottish economy. There is a debate between nationalists and the British government about whether Scotland would face a significant fiscal gap after independence. The Institute for Fiscal Studies says Scotland would face a long-run fiscal gap amounting to 1.9% of national income after independence, while the British government says Scotland would have to raise taxes 9% upon independence to fund the same benefit levels. Nationalists retort that they would change policies to save money. Nevertheless, like most political parties, they are only specific about the new benefits they plan to introduce after independence.

Still, there is good evidence that most Scots are not concerned about the fiscal issues relating to independence. After all, somewhere between 52 and 68% of Scots express support for either independence or “devo max” in polls. “Devo max” is a term used in the UK for full fiscal autonomy, under which Scots would pay no direct taxes to and receive no direct benefits from the UK government (everything would be negotiated between the Scottish and British governments). The strong support for at least devo max implies that Scots aren’t worried about suffering from a fiscal gap even when fully fiscally autonomous.

The dropoff in support from devo max to independence reflects that Scots are more worried about the foreign, monetary, and trade policy uncertainties attendant upon independence. A major bone of contention has been nationalists’ desire for a currency union. The “No” side insists that there is no guarantee the British government will accept a currency union. Salmond has said Scotland could repudiate its share of British debt if the British government didn’t accept a currency union.

The key sticking point in the currency union debate is that the nationalists desperately want Scotland to retain a say in the Bank of England’s monetary policy. Absent that desire, it would perfectly straightforward for Scotland to retain the pound. They don’t need a central bank: people, including the new independent government, could go on using the pound as usual. Indeed, a better threat than debt repudiation that Salmond could make would be for Scotland to abolish central banking, legal tender laws, deposit insurance, and financial regulation, and suck financial business out of London into Edinburgh. (A libertarian can dream, right?) But Scotland’s political culture is solidly left-wing, and any suggestion of going without a lender-of-last-resort wouldn’t fly with voters.

So as we have seen with previous referendums in Quebec, the “Yes” side will insist that all will go on as normal after independence: same treaties, same trade relations, same monetary policy. Meanwhile, the “No” side will play up the uncertainties. They won’t “talk down” Scotland, which would risk a backlash, but instead they’ll just keep saying “there are no guarantees” and attacking the nationalists’ plans as “unrealistic,” “uncosted,” and “amateur.” Steve Saideman notes that there is a tension between nationalists’ desires to “keep everything the same” and promise improvements after independence: secession is either meaningful or it isn’t!

The way to square the circle is that Scots want more left-wing policies than the British status quo on welfare rights, education, the environment, Europe, labor, and defense, but they also like the risk-pooling advantages of a larger state. They see no advantage in a new Scottish currency or a nonaligned foreign policy. Therefore, nationalists promise Scots what they want on the former set of policies while trying to assuage their doubts about the latter.

The figure below shows how Scottish nationalism has tracked left-right ideological change in the Scottish electorate, for UK general elections only. The blue line represents the vote share for secessionist candidates in Scotland: mostly Scottish National Party (SNP), but also Greens, Socialists, and some independents. The blue line represents the UK vote for center and right parties minus the Scottish vote for center and right parties (mostly Conservatives, but also UKIP, Unionists, and the like). In general the two lines correlate pretty closely; the only major exceptions are the 1979 and 1983 elections, when Scotland moved left relative to the UK as a whole, even as the SNP vote collapsed. Since then, the lines have correlated rather well. There is some reverse causation here, since the SNP is a left-wing party, but the fact that the nationalists have adopted a forthrightly left-wing platform tells us something. The bottom line is that Scotland’s move further to the left of the UK has helped promote the secessionist cause. (The spike in the 1974 elections was due to the discovery of North Sea oil, which the SNP politicized under the campaign slogan, “It’s Scotland’s Oil!”)

lefties & nats in scotland

Whether Scotland votes “yes” or “no” in the referendum will depend on how the pivotal voters trade off concern over future Conservative governance in Britain against the uncertainties of full independence. One reason why “no” appears headed for victory is that the Conservatives look set to lose the next UK election, and over the last two decades, Labour has looked like the natural party of government in Britain and has in fact moved British policy significantly to the left, at least on fiscal issues. Scottish voters have less to fear from union.

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I recently held team debates in my introduction to international relations course on a variety of topics. Here are the topics the students debated, along with the “pro” and “con” “prompts” I provided them.

  1. Resolved: That the coming power transition between China and the U.S. appreciably raises the risk of war between the two powers over the next 40 years.
    Pro: Joshua Keating
    Con: Lynn White
  2. Resolved: That the best way for governments to prevent civil war is to boost security and credibly threaten to punish rebellion harshly.
    Pro: Barbara F. Walter
    Con: Ted Gurr
  3. Resolved: That the optimal level of U.S. counterterrorism expenditure is close to zero.
    Pro: Mark Thompson
    Con: John Mueller and Mark Stewart
  4. Resolved: That democracy promotion programs can make the world a safer place.
    Pro: Steven Brooke & Shadi Hamid
    Con: Christopher Coyne
  5. Resolved: That liberalizing trade, investment, and immigration, not foreign aid, is the best way for Western countries to promote development abroad.
    Pro: William Easterly
    Con: Dani Rodrik
  6. Resolved: That most developing countries have little bargaining power vis-`a-vis multinational corporations.
    Pro & Con: Shah M. Tarzi
  7. Resolved: That transnational advocacy networks make little difference in the human rights practices of authoritarian regimes.
    Pro: Emilie Hafner-Burton
    Con: Margaret Keck & Kathryn Sikkink

How would you come down on each of these resolutions? What do you predict my students thought? (I held a vote of the class after each debate.)

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In my last post on this topic, I argued for a right of unilateral secession on the grounds that: 1) legalizing secession would reduce the risk of violence on net, and 2) codifying a plebiscitary, unilateral right to secede would reduce uncertainty without any compensating disadvantages. In this post, I consider some common objections in the literature to a liberal right to secede and show why they do not overturn the case for a legal right of unilateral secession to be accomplished through democratic plebiscite.

1. Rights-Violating Secessionists

Counting heads is probably not the best way to determine the relative legitimacies of governments. If a region gets 51% of the voters to approve secession, but then the 51% decide to persecute the 49% minority, then secession would cause a net loss in freedom or human rights. Under these conditions, secession should be restricted.

In the abstract, the case for restraining rights-violating secessions is plausible, but it is unworkable institutionally. A legal provision allowing the central government to veto secession if the secessionists are likely to violate rights would suffer from the “biased referee” problem. Central governments will be tempted to use the provision as an excuse to ban all secessions. Similarly, secessionists will always claim to be liberal if they are required to do so, but that does not mean practices will not change once they achieve independence.

Some scholars have argued that the potential for rights violations by secessionists justifies a higher threshold in the referendum on independence (say, 55% rather than 50%+1). There are two problems with this argument: 1) the correlation between secessionists’ likelihood of violating rights and ability to get widespread support in a referendum is probably weak, and 2) this suggestion assumes that secessionists are more likely to violate rights than governments. If governments are more likely to violate rights, then a higher threshold will tend to prevent more morally desirable secessions than the morally objectionable ones it prevents.

In cases such as the U.S. Civil War, in which the central government is sincerely persuaded that a particular secession would be morally disastrous despite, let’s assume, a constitutional provision permitting it, then the government may be morally justified in acting extraconstitutionally to prevent the secession.

2. Nationalist Objections

Nationalists (more…)

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Do you more about international relations than an intro student at Dartmouth? Prove it! Here are a few questions from a recent midterm I gave my students. The first commenter to get all of these right will win a paperback copy of my book, Secessionism.

1. What usually happens to public support for a war in the U.S. over time?

2. In general, why do civil wars tend to last longer than interstate wars?

3. What two general solutions have scholars discovered for collaboration problems (the Prisoner’s Dilemma)?

4. Give an example, general or specific, of an international issue that the “Battle of the Sexes” game can model well.

5. In any bargaining situation, which side has the greater power?

6. Suppose there are two or more theories that appear to explain equally well a phenomenon of interest, such as the democratic peace or a decline in the rate of violent death over time. How can you determine which of the theories is actually the best explanation?

UPDATE: Just to be clear, you may try more than once if you get one wrong the first time. :)

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In this three-part series of posts, I will be blogging my new SSRN working paper, “Designing a Constitutional Right of Secession: Applying Normative Principles and Empirical Findings.” The paper defends a right of unilateral secession for any country in which the possibility of secessionist violence is non-negligible, or where central governments are already unwilling to suppress secession militarily.

In this post, I will explain the basic argument in favor of a right of unilateral secession, that is, a justiciable right of a region to secede by plebiscite without a right of veto for other parts of the country or for the central government. I argue for a moral duty on a government to implement a constitutional or legal right to secede, not for a fundamental, abstract, moral right to secede. The difference is important because real-world politics often makes it impossible to satisfy everyone’s moral rights. The case presented in the paper is for legally recognizing a right to secede even when secession would violate some individuals’ rights. Moreover, the argument is about domestic legal guarantees for secession, not international institutions. It may be desirable for a government to recognize a unilateral right of secession even when it is undesirable for international institutions to intervene to enforce such a right.

In the next post, I will address arguments against a legal right of unilateral secession that fail. In the final post, I will explain how a right of unilateral secession should be qualified and structured in a country’s constitution.

To make the argument, I start with a set of normative assumptions and a set of empirical findings. The normative assumptions are intended to be general enough that they can be widely endorsed by people of widely differing moral and political perspectives, who nevertheless share some basic commitments. I then consider how different “secession regimes” — that is, legal approaches regulating secession — can satisfy these principles, bearing empirical findings in mind.

Here are the normative assumptions, ordered lexically so that higher principles take precedence over lower ones:

  1. Maximize physical integrity rights for all. The range of potentially permissible secession regimes is limited to those that can plausibly satisfy this principle. Physical integrity rights include individual rights against extrajudicial killing and physical assault, torture, and illegal detention.
  2. Maximize other basic liberties for all. Among those regimes that can satisfy the first principle, only those that also satisfy the second principle are potentially permissible. Political philosophers disagree on what counts as “basic liberties” that any minimally just regime must satisfy. At the very least, these liberties include wide guarantees for freedom of speech, thought, conscience, association, and equality before the law. John Rawls (1999, pp. 197-9) argues that the “fair value of equal political liberty,” a right to security of personal property, and the right to free choice of an occupation or profession count as fundamental liberties. “Free-market fairness” advocate John Tomasi (2012) also includes the right to security of productive property and the right to own a business. And so on. To the extent that there is disagreement about what counts as a basic liberty, there may be disagreement about the range of potentially permissible secession regimes.
  3. Follow the principle of Pareto optimality. For any two regimes A and B and any two sets of citizens X and Y, if the consequences of the two regimes are such that X prefer one regime to the other, while Y are at least indifferent between the two regimes, then select the regime that X prefer. This principle rules out secession regimes that make some people worse off without making anyone better off, relative to some alternative regime.
  4. Satisfy all other moral principles. Differing moral foundations yield different moral principles. I avoid making claims about moral foundations, but these foundational views may yield further principles limiting the range of permissible secession regimes. Differing views on the nature and importance of distributive justice and economic growth can justify marginally different views on the appropriate secession regime.

I consider the principle of “no forced association” under this last heading. Libertarians, for example, often claim that governments may rule only with the literal consent of each individual under their rule. (Nozick famously disagrees.) Real-world politics always requires some individuals to be coerced. Prohibiting secession coerces some people into supporting a government to which they do not consent. But allowing secession also allows secessionists to coerce the anti-secessionists in their midst. It may be ideal for governments to rule only on the basis of unanimous consent — a question outside the scope of this paper — but in practice, they do coerce nonconsenters. So we have to figure out legal rules for secession in the world as it exists. I argue that the consent principle yields only a weak presumption in favor of allowing secession whenever a majority in the seceding region votes for it. Presumably allowing secession under such conditions will reduce the number of nonconsenters. But it won’t necessarily minimize the number of non-consenters or the number and severity of rights violations, as we shall see.

The generalizable empirical findings about secessionism are as follows: (more…)

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This question, made famous during the Watergate hearings, seems to be the driving question these days, whether one is speaking of the clumsy rollout of the Affordable Care Act, the number of people in the independent insurance market who will in fact lose their coverage, or the NSA’s surveillance program. In Dana Milbank’s words (Washington Post):

It stretches credulity to think that the United States was spying on world leaders without the president’s knowledge, or that he was blissfully unaware of huge technical problems that threatened to undermine his main legislative achievement. But on issues including the IRS targeting flap and the Justice Department’s use of subpoenas against reporters, White House officials have frequently given a variation on this theme.

Question: What did Obama know and when did he know it?

Answer: Not much, and about a minute ago.

Milbank concludes:

On one level, it would be reassuring — and much more credible — if the White House admitted that Obama is more in the loop than he has let on. On another level, it would be disconcerting: Is it better that he didn’t know about his administration’s missteps — or that he knew about them and didn’t stop them?

Eugene Robinson (Washington Post) also finds the claims of ignorance difficult to accept, albeit with a somewhat more ominous alternative:

Either somebody’s lying or Obama needs to acknowledge that the NSA, in its quest for omniscience beyond anything Orwell could have imagined, is simply out of control.

Both could be true, of course. The growing scale and complexity of government creates enormous problems of oversight and political control. Even if a well-intentioned and moderately intelligent president attends national security briefings and takes copious notes, there are distinct limits to how much one can know and how effectively one can alter the course of the bureaucracy.

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The Return of Marx?

The decades roughly separated by Reagan’s 1980 victory and the financial collapse brought a greater respect for markets and growing interest in libertarianism.  The financial crisis, in contrast, led to a rejection among many of market-oriented doctrines and a revival of Keynes (in Robert Skidelsky’s words, it marked “The Return of the Master”).* According to Michelle Goldberg (h/t Marginal Revolution) it has also brought  renewed interest in Marx. One quote:

After the financial crisis, “you didn’t need to be Karl Marx to see that people were getting kicked out of their homes,” says Gessen. And privileged young people—particularly the kind of who are inclined to read and write essays about political theory—haven’t just been spectators to immiseration. Graduating with student debt loads that make them feel like indentured servants, they’ve had a far harder time than their predecessors finding decent jobs in academia, publishing, or even that old standby law and are thus denied the bourgeois emollients that have helped past generations of college radicals reconcile themselves to the status quo.

I am not certain that one can generalize from Goldberg’s piece. While my experience may not be representative, it suggests that she is on to something. During the 1990s, there was e a growing fascination among a subset of my students with the works of Ayn Rand.  Once the bottom fell out, the appeal of objectivism dissipated and I have seen a growing curiosity with Marx’s basic arguments regarding the intrinsic flaws of capitalism and greater support for socialism. Given the power of postmodernism, my guess is that students will bypass classical Marxism and head toward the New Left’s take on Marx (e.g., Marcuse’s synthesis of Marx and Freud) or some combination of Marx and postmodern theory. Whether this can be translated into a political program remains an open question.

This raises some interesting questions: Has the Great Recession undermined the demand for classical liberalism? Will the financial collapse be the event that shapes the ideological orientations of a generation? What are the political implications?

*Note: the empirical record does not support the contention that the Reagan administration marked some wholesale return to the market—the rhetoric was rarely translated into policy. Similarly, the empirical record does not support the argument that the financial collapse was simply a product of a zealous embrace of deregulation and free markets. Nonetheless, these are the popular interpretations and they likely carry a good deal of weight among those who do not have the time or inclination to delve deeply into political economy.

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A few days ago, I gave the theoretical logic for why the availability of the government shutdown results in growing government spending. Advocates of smaller government should advocate a default budget rule that is far milder than shutdown. Now, I have come across academic research by David Primo finding just this at the state level. States with an automatic shutdown provision actually spend on average $64 more per capita than states without such a provision.

As Tea Party Republicans approach the final denouement of their humiliating, destructive defeat on the latest budget battle, it bears thinking about how U.S. fiscal institutions essentially predestined this outcome.

HT: Matt Mitchell

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Breaking Binary

By all indicators, Congress is a failed institution that is no longer capable of executing its basic constitutional duties. Given the role of parties in organizing Congress and controlling the agenda, one should not be surprised that much of the blame is attributed to the GOP and the Democratic Party. A new Gallup Poll has some interesting results for those who have tired of the binary. As Gallup reports:

Amid the government shutdown, 60% of Americans say the Democratic and Republicans parties do such a poor job of representing the American people that a third major party is needed. That is the highest Gallup has measured in the 10-year history of this question. A new low of 26% believe the two major parties adequately represent Americans.

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One should not be surprised that 71 percent of independents believe that a third party is needed (a majority of independents have held this position as long as Gallup asked the question). But now “Republicans (52%) and Democrats (49%) are similar in their perceptions that a third party is needed. In fact, this marks the first time that a majority of either party’s supporters have said a third party is needed.”

Of course, there are massive institutional barriers to successful third parties, not the least of which is the existence of single-member, simple-plurality districts.  As those of us who have supported third parties in the past know, their candidates are routinely excluded from debates and have difficulties even accessing the ballot in many states.

Even if the binary is broken, it is not going to go down easily.

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Sympathy for the Rebel

I was pleased to read these statements in the textbook I’m using for intro IR (p. 241):

[I]deally, we would like to reduce the likelihood that bloody and destructive civil wars will break out in the first place. There are several challenges to this aspiration. . . [T]here are truly repressive regimes that deserve the opposition of their people. In these cases, reducing the risk of armed rebellion can have the unintended effect of diminishing the government’s incentives to liberalize.

When discussing civil wars in class, I found my students took a typically “statist” perspective on the problem. For them, the most important thing was strengthening security services and the government’s surveillance capabilities to make armed opposition unthinkable. Most of them seemed shocked when I said that higher civil war risk was probably a good thing in many places. Do we want to strengthen the North Korean state’s surveillance capabilities? Would North Koreans be better or worse off if there were an armed opposition and the government knew it?

You don’t have to be a right-wing gun nut to answer “no” and “better off,” respectively.

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Following Marc’s great post on congressional dysfunction, I’d like to point how political science tells us that the availability of government shutdowns actually causes the growth of government spending. The analysis follows the 1979 spatial analysis of zero-based budgeting by Thomas Romer and Howard Rosenthal.

Suppose that there is one dimension of politics: the size of the federal budget. There are a fiscally conservative party and a fiscally liberal party. For simplicity, assume the median, electorally decisive American voter is somewhere between the two. We could plot the parties’ and median voters’ positions on this dimension like this, where “C” is the conservative party, “M” is the median voter, and “L” is the liberal party:

Federal budget

 0|----------------------------------|--------|-----------|------------------------------------------| 100% of GDP
                                    C        M           L

Now suppose that there is a need to pass a budget. If the budget doesn’t pass, the government partially shuts down (S). Once the government shuts down, the median voter M perceives the outcome as being more favored by the conservative party, with ideal point C. The liberal party with ideal point L can make a budget proposal that must get approval from both parties, so conservatives have the opportunity to accept or reject it – in the latter case, the government stays shut down. After the budget is approved or rejected, there is an election, and the median voter M votes for the party with the closer budget position. Parties care most about winning election, then secondarily obtaining their preferred budget.

In this example below, once the conservative party gets associated with S, causing the shutdown, then L is able to propose its ideal point (L). Conservatives accept the budget, because otherwise they would remain associated with S, and the median voter prefers L to S, so would turn conservatives out at the next election.

 0|----------|-----------------------|--------|-----------|------------------------------------------| 100% of GDP
            S                       C        M           L

The median voter will only be willing to vote for conservatives who reject a liberal budget proposal if S is closer to their ideal point than the liberal budget proposal. Knowing this, L will propose something close enough to the median voter to prevent that outcome – and conservatives will accept it. Take the following example, where P is the proposal liberals make:

 0|----------|----|-----|----------|----------------------|------------------------------------------| 100% of GDP
            S    C     M          P                      L

P is infinitesimally closer to M than S is, so M votes for the liberal party, unless the conservatives also vote for the budget.

So once a shutdown happens, a bigger budget than the median voter prefer (let alone the conservative party) looks inevitable. Knowing this, conservatives won’t want the government to shut down to begin with. But that still means liberals have a lot of bargaining power, and the budget will tend to grow.

In real life, of course, shutdowns happen very occasionally. Why? (more…)

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I recently read Daniel Treisman’s brilliant book, The Architecture of Government: Rethinking Political Decentralization. This book is particularly important for classical liberals who defend decentralization as an important institutional reform for promoting and protecting individual freedom. Treisman’s thesis is essentially that decentralization is overrated. He doesn’t argue that decentralization generally has bad consequences, even under readily identifiable circumstances, but that the consequences of decentralization are so unpredictable and case-specific that few generalizations, even highly conditional ones, can be made about them. The book is largely architecture of governmenttheoretical, and Treisman takes on standard justifications of decentralization like Tiebout sorting, the role of mobile capital in keeping government small, and keeping government “close to the people.” While Treisman’s counterarguments to decentralization’s defenders are well thought out and in many cases persuasive, I remain more optimistic about our ability to make valid generalizations about decentralization. Still, any defender of “competitive federalism” or more local governance will need to grapple with Treisman’s challenges. I’ll take some of the most important of these challenges in turn.

One common argument for decentralization comes from Charles Tiebout: competition among local governments providing public goods allows residents to reveal their true preferences for these goods and incentivizes local governments to act on those preferences. Treisman argues that key assumptions of the model are so thoroughly violated in reality that the predictions of the model are not likely to hold true in the real world.

First, he argues that if “public service differentials are capitalized into property prices, then pressure on governments may disappear completely” (79). Residents then won’t leave districts that provide poor public services, and local officials will not be disciplined. (more…)

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I have just posted a couple of my working papers to SSRN for those who are interested. They are as follows:

  1. Public Policy and Quality of Life: An Empirical Analysis of Interstate Migration, 2000-2012
    Abstract:
    Individuals and households choose their political jurisdiction of residence on the basis of expected income differentials and jurisdiction-specific characteristics covered by the general term “amenities.” In addition to fixed characteristics like climate and terrain, amenities may include public policies, as in the well-known Tiebout model of migration. Do Americans reveal preferences for certain public policies by tending to migrate toward jurisdictions that offer them? This article tests whether state government involvement in fiscal policy, business regulation, and civil and personal liberties more often reflects an amenity or a disamenity for Americans willing to move. As identification strategies, the article estimates spatial, matched-neighbors, and dyadic models of net interstate migration for all 50 states, covering the years 2000-2012. The evidence suggests that cost of living, which is in turn strongly correlated with land-use regulation, strongly deters in-migration, while both fiscal and regulatory components of “economic freedom” attract new residents. There is less robust evidence that “personal freedom” attracts residents.
  2. Civil Libertarianism-Communitarianism: A State Policy Ideology Dimension
    Abstract:
    This paper investigates the existence of a second dimension of state policy ideology orthogonal to the traditional left-right dimension: civil libertarianism-communitarianism. It argues that voter attitudes toward nonviolent acts that are sometimes crimes, particularly weapons and drugs offenses, are in part distinct from their liberal or conservative ideologies, and cause systematic variation in states’ policies toward these acts. The hypotheses are tested with a structural equation model of state policies that combines “confirmatory factor analysis” with linear regression. The existence of a second dimension of state policy essentially uncorrelated with left-right ideology and loading onto gun control, marijuana, and other criminal justice policies is confirmed. Moreover, this dimension of policy ideology relates in the expected fashion to urbanization and the strength of ideological libertarianism in the state electorate. The results suggest that the libertarian-communitarian divide represents an enduring dimension of policy-making in the United States.

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Factor price equalization due to trade and investment flows across economies would substantially reduce economic reasons for immigration to rich countries. (Trade and investment flows will not eliminate economic reasons for migration because if polities differ in total factor productivity due to political institutions, there can still be an advantage to migrating to a more efficient economy in a fully globalized world.) Therefore, if you are an American who is deeply concerned about immigration to the U.S. for cultural or political reasons, one way to encourage less immigration is to press for full trade and investment liberalization in this country and around the world.

Now, does opposition to immigration correlate positively or negatively with support for free trade and “outsourcing” in voters’ attitudes? In my experience, negatively.

Chalk this up to one more way in which politics is about symbolism rather than substance, due to public ignorance.

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Is federalism for progressives? Libertarians, who are generally enthusiastic about the competitive federalism model, have tried to argue that the model provides, at the very least, a kind of modus vivendi for all ideological camps, allowing citizens in each state to have roughly the kind of government that they want. Relative to a single national standard on every policy issue, everyone is better off, right? Some progressives have agreed, to a point.

The problem is that status quo U.S. federalism is a long way from the competitive federalism model that scholars like Michael Greve favor. (I have contended that competitive federalism is still alive in the U.S. to a much greater extent than just about any other country excluding Switzerland and Canada.) The federal government establishes a firm national baseline on both economic and social policies. First, the U.S. Congress has authorized federal matching grants that incentivize state and local governments to spend their own taxpayers’ money on federal priorities. Even conservative politicians often have political trouble turning down “free” (better: “highly discounted”) federal money. Second, the U.S. Congress has authorized extensive federal regulations intruding into areas previously considered state prerogatives: securities and exchange regulation in the 1930′s (a provincial-only responsibility in Canada), occupational safety and health regulation in the 1970′s, mortgage originator licensing in the 2000′s, and health insurance regulation in the 2010′s, to name just a few examples. Third, the federal judiciary has established a firm baseline on civil rights, civil liberties, and “social” policies, repeatedly striking down laws regulating or criminalizing abortion, sodomy, contraception, and free speech, and, more recently, laws prohibiting gun possession and carrying, enacting public election financing, and authorizing certain regulatory takings. While some of these examples suggest that progressives might have reasons to favor a looser “baseline” from the federal judiciary, the overall historical trend has been for the judiciary to constrain conservative policies. (Note that libertarians typically favor judicial engagement on all or almost all of these questions, distinguishing their kind of limited-government federalism from the old “states’ rights” variety.)

Is there evidence that U.S. federalism as it already exists is tilted toward progressive priorities? I believe I have found such evidence in the distribution of state policy priorities.

Using the Ruger-Sorens database of state policies, which covers the years 2000-2010 (year-end), (more…)

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1) Polls continue to point to a significant “yes” victory in a future referendum on independence in Catalonia.

2) If the Catalan government backs down from a referendum, even if the Constitutional Court declares it illegal, as it certainly will, it will pay a heavy price at the polls. Therefore, it is locked into holding a referendum, unless it can negotiate a sufficiently advantageous fiscal settlement with the Spanish state. A negotiated settlement averting a referendum remains the most likely outcome, although p<0.5.

3) Some Catalans think the Socialist Party of Catalonia, which is linked with the main Spanish opposition party (PSOE) and has been trying to straddle the self-determination issue, will implode soon over the issue.

4) Catalonia and Spain may both be more viable as separate states than together. Spain's political economy is dysfunctional. Catalonia’s would not be (the largest Catalan party is centrist with some classical liberal elements). A functional state can carry a larger debt burden than a dysfunctional one. Therefore, the European Union might pressure Spain to accept a post-referendum settlement by which Catalonia is allowed to go free while taking on a disproportionate share of Spain’s debt. (On this point I am indebted to Jaume Lopez Hernandez of the Universitat Pompeu Fabra.) This is the second most likely outcome.

5) Spain’s threat to arrest Catalan leaders and prevent secession by force is not credible. (Although some autonomists and secessionists in Spain insist that the central government would indeed send in the tanks.) Therefore, it is unlikely that the Catalan government will be deterred. A “yes” vote followed by suppression is the least likely outcome, even less likely than a “no” vote.

6) If the Catalan referendum is held, regardless of the result, it would set a powerful precedent for Basque nationalists. The precedent is not that secession is easy or desirable, but that the possible legal framework will be recognized. The Basque Premier backed down from holding a referendum on his “Ibarretxe Plan” for free association after threats of arrest and a negative vote in the Spanish Cortes. The reason why I argued, in this interview, that Ibarretxe should have gone ahead with the referendum is not so much that I endorsed the Plan itself (on which I am agnostic), but that I fear his backing down set an unfavorable precedent for the “right to decide,” which I do favor.

7) Nevertheless, even if Catalonia secedes, the Basque Country Autonomous Community is unlikely to follow, at least right away. Pan-Basque independentists are a powerful force and would insist on bringing along Navarre (and later the French Basque provinces). But Navarre would vote “no” in a referendum held today or at any time in the near future. No other region of Spain is likely to hold a referendum either, and thus there is likely to be no “harmful precedent” for secession or “contagion” from Catalan secession.

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If you see corruption in the upper tiers of government as a major problem for an economy’s health in the long run (and the balance of evidence suggests that it is, at least at high levels in capitalist countries), then externally imposed austerity might be the only way to root it out. Syracuse prof Glyn Morgan passes along this story from Spain:

Rato, Castellanos and others jointly own a commercial lot near Madrid that is leased to a third party, according to Ayala’s Jan. 10 statement to the court. They also controlled a company together while Rato, 64, was running Bankia, Ayala said.

At the same time, Lazard billed Bankia 9.2 million euros ($12 million) for work either assigned or executed during Rato’s 27-month tenure at the bank, court documents show.

Their relationship exemplifies how a network of leaders from the governing People’s Party helped their associates among the financial elite to profit while the country’s savings banks, known as cajas, racked up losses. That toxic combination flourished during the boom fueled by Spain’s entry into the euro in 1999 and served to deepen the crash that resulted in a 41 billion-euro bailout of Spanish lenders, according to Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington.

Whether harsh spending cuts are a good idea or not for countries like Spain, Italy, and Greece depends in part on how one values the long run versus the short run. Also from the story:

“The things that we need to do to make Spain work require pulling the rug out from under the core interests of everyone” in power, Ken Dubin, a political scientist who teaches in Madrid at IE business school and Carlos III University, said in a May 22 telephone interview. “This is a political racket run for the benefit of politicians who suck the marrow out of the citizenry.”

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Last night the U.S. Senate played host to naked special-interest politics, as agricultural subsidy interests won vote after vote on the floor. As this story from Politico notes,

the sugar program stands out as one of the most intrusive of the commodity programs still on the books: a mix of price supports, import quotas, and since 2008, a feedstock program under which sugar can be purchased by the government to be used in biofuels.

The amendment Wednesday sought to end these purchases and roll back the price-support level from 18.75 cents per pound to 18 cents.

The amendment failed, 53-46. Some Republicans voted to keep the subsidies, including Marco Rubio of Florida. Even non-sugar-producing states’ senators voted to keep sugar subsidies:

And as a member of the Agriculture panel, Sen. Heidi Heitkamp (D-N.D.), warned her colleagues against unraveling the commodity coalition behind the farm bill.

“We forget that this is much bigger than a sugar program. It’s much bigger than any one single commodity,” said the North Dakota freshman, who hails from a state that is a major producer of sugar beets. “My concern is when you single out one commodity, whether it’s soybeans, corn or sugar or tobacco or rice, when you single out one commodity, you threaten the effectiveness of the overall farm bill.”

In other words, there’s a logroll among senators from subsidized states. My guess is that if you ran a logit model of votes on the sugar amendment, both sugar production and production of other subsidized commodities would enter the equation negatively. I wonder whether ideology or partisanship would factor in. I count 20 GOP “nays” (out of 45), meaning that a little over 60% of Democrats voted nay. And will Tea Party activists hold people like Rubio to account? I’m not holding my breath.

My last intemperate rant against agricultural subsidies here.

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The IRS has been taking flak for its treatment of right-leaning groups seeking recognition as tax-exempt “social welfare” organizations under clause 501(c)(4) of the Internal Revenue Code. As it happens, I have some personal experience with IRS scrutiny of 501(c)(4) applications. I was on the Board of the Free State Project (FSP) when the FSP applied for 501(c)(4) status in 2007-8. Our application was denied. We appealed, and the appeal was denied.

The reasoning the IRS gave us is that the FSP was simply a political action group trying to benefit the Libertarian Party. Nothing could be further from the truth. The FSP has never run or endorsed candidates or given money to any candidates. The FSP has never endorsed specific legislation or lobbied any elected or appointed official. More importantly, the FSP has never had any ties, formal or informal, with the Libertarian Party. Plenty of FSP participants reject electoral politics altogether. To my knowledge, the FSP has never received even a single donation from any foundation, government, party, or any other corporate entity whatsoever.

The FSP clearly qualifies as a social welfare organization, if not a public-benefit, charitable organization (“501(c)(3)”), according to the IRS’s own rules. The point of the FSP is to promote New Hampshire as a destination to people who are philosophically classical-liberal or libertarian. That’s it. The FSP spends money on advertising and promotion, maintaining a website, and holding two annual educational-social events in New Hampshire. The FSP believes that is an organization operated for the public benefit, especially with the educational programs held at its events. However, even if the IRS does not buy that interpretation, it is clearly an organization intended for the social and educational benefit of philosophic libertarians. It is clearly not a political action organization. Indeed, had the FSP applied for section 527 recognition, it probably would have been denied, leading to the absurd likelihood that the IRS would have considered the FSP a nonprofit fitting into no nonprofit category.

Since then, the FSP has operated just fine as a generic nonprofit corporation with no IRS tax status; since the organization’s expenditures always exceed its merchandise sales, it does not have any tax liability. However, 501(c)(4) status would have been a useful designation and signal to donors of the organization’s credibility.

Conservatives would like to find Obama’s fingerprints on the current IRS scandal, but they are unlikely to do so. Career bureaucrats at the federal agency that collects taxes from Americans are unlikely to be friendly to American antitax groups. The IRS’s hostility to antitax groups will manifest itself in a variety of ways, but that hostility is apparently nothing new or even particularly surprising. That doesn’t mean it isn’t wrong, of course.

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All 50 states ban the direct sales of motor vehicles from manufacturers to consumers. The politics of this regrettable policy are clear: auto dealers are powerful political players in every state, while only a few states actually have manufacturing facilities. Banning direct manufacturer sales benefits dealers while hurting manufacturers and consumers.

State governments continue to insert themselves into the contractual relationships between car manufacturers and dealers, typically to the ostensible benefit of the latter. The New Hampshire Senate recently passed a bill regulating the terms and conditions of dealer contracts with manufacturers, prohibiting manufacturers from requiring dealers to alter the appearance of their showrooms, for instance. (Disturbingly, the state director of Americans for Prosperity in New Hampshire supports the bill.) The bill is actually unlikely to change any “balance of power” between automakers and auto dealers. Automakers will simply respond by vetting potential dealerships far more closely and perhaps charging higher franchise fees. The onus of this response is likely to fall more on new dealerships than on incumbents. So the real losers from the bill are going to be potential entrants into the car dealer industry and, of course, consumers.

These are not the only examples of “state protectionism,” in which state governments adopt laws meant to reduce competition from out-of-state businesses for the benefit of local incumbents. Some states still prohibit certain out-of-state direct-to-consumer wine shipments. Regulatory barriers can accomplish the same ends. States have widely varying regulations on insurance products, making regulatory compliance a huge barrier for a company trying to market a standard policy in multiple states. For a long time, major life insurance companies lobbied Congress to adopt a national life insurance regulatory regime, pre-empting state laws. They were opposed by local life insurance agents, for whom knowledge of and compliance with distinctive state regulations were a significant source of competitive advantage. In the end, no national legislation materialized, but Congress authorized the formation of an interstate compact, essentially a contract among consenting states that sets up a single insurance regulator. More than 40 states have joined the Interstate Insurance Product Regulation Commission, which regulates life insurance and annuities.

Such state protectionism potentially runs afoul of the so-called “dormant commerce clause” of the U.S. Constitution. The commerce clause allows Congress to regulate trade among the several states. By implication, then, states are presumptively prohibited from burdening interstate trade, unless authorized by Congress. Unfortunately, courts have been reluctant to scrutinize state economic regulations that have an essentially protectionist character, although especially blatant discrimination against out-of-state imports has been overturned. (more…)

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At Econlog, the very sharp Garett Jones makes an argument for paying politicians more:

There’s some evidence that when it comes to politician quality, you get what you pay for; Besley finds that higher pay for U.S. governors predicts governors with more experience in politics, and Ferraz and Finan look at Brazilian data and find a slower revolving door and better educated politicians in regions where politicians get better pay. But alas the egalitarian ethos in democracies makes it difficult to raise the pay of politicians.

But there’s a countervailing effect of high salaries for politicians: they increase careerism. With high salaries for politicians, you’re more likely to get candidates who give the voters what they want so that they can get (re-)elected. And one of the themes of Jones’s post is that the voters are ignorant and excessively egalitarian: we shouldn’t always give them what they want. We need politicians who are intelligent, informed, and public-spirited. High salaries get us more of the first two and less of the last.

What else does the evidence suggest? In the American states, governments that pay legislators more and generally have more professionalized legislatures have higher government spending. Neil Malhotra has found good evidence that the causal arrow goes from spending to professionalism rather than the other way around. However, his study, for all its sophistication, has some evidentiary holes, and I believe the last word has not been spoken. From my own observations of the highly deprofessionalized, low-paying ($100 a year) New Hampshire legislature, I would say that it attracts candidates who are ideologically motivated but not careerist. They deviate significantly from the views of the median voter, for good or ill.

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In his 1982 book, The Rise and Decline of Nations, economist Mancur Olson argued that over time, stable societies accumulate “distributive coalitions,” narrow special-interest organizations that complexify social life and burden the economy with overregulation and opaque forms of wealth redistribution. The notion that distributive coalitions are more often bad than good for economic performance, at least when they are not sufficiently “encompassing” to internalize the costs of inefficient redistribution, is pretty well accepted, but Olson’s thesis that political stability and the passage of time are the most important determinants of the number and power of distributive coalitions has been more controversial. One of the chapters of his book is an empirical test of the hypothesis on the 50 states. Olson finds that states settled earlier have higher rates of unionization and lower growth rates (in the 1960s and 1970s), except the former Confederate states, which “benefit” from the disruptive legacies of the Civil War and Reconstruction.

I am skeptical of Olson’s explanation for the growth of distributive coalitions, but his research does contain a kernel of truth. States that industrialized (note) early often show up on the bottom of economic freedom indices and usually have lower-than-average growth rates even today. Why is that?

To answer the question, we have look back at the social context of 19th century industrialization. The U.S. started out as an overwhelmingly rural, farming country. Industrialization populated the cities. Industrialization advanced first in those parts of the country that were unfit for export agriculture, benefited from high tariff walls on manufactures, and had a policy of free labor: southern New England, New York, and New Jersey. However, resource discoveries in the West also brought urban growth to California.

In 1900, the most urbanized states, by far, were Rhode Island (88.3%) and Massachusetts (86.0%). Then came New York (72.9%), New Jersey (70.6%), and Connecticut (59.9%). Pennsylvania (54.7%), Illinois (54.3%), and California (52.3%) were not far behind Connecticut. All of these states, with the possible exception of Pennsylvania, are now recognized as “deep-blue,” solidly Democratic states. Most of these states were relatively free for industry in the early 20th century, but they also boasted the strongest labor unions and most severe class conflict. These highly urban states became “proletarianized,” leading today to a strong concentration of Democratic votes in their metropolitan centers, according to Jonathan Rodden and other scholars.

As late as 1957, New Jersey was an example of a low-tax business haven. State and local taxes from all sources as a percentage of personal income stood at just 6.3% in New Jersey that year. Delaware had the lowest tax collections in the country, at 4.6% of income. States at the high end included Vermont (9.1%), which pioneered the state income tax, North (9.7%) and South Dakota (9.0%), and Oregon (9.0%). These states remained rural for a long time in part because prairie populism and Yankee progressivism yielded fiscal and regulatory policies that deterred investment. The South’s repression of blacks through Jim Crow kept their institutions “extractive,” to use Acemoglu and Robinson’s term, and their comparative development level low.

Nowadays, urbanization does not tend to produce proletarianization. Not many Americans are employed in manufacturing any more, nor are many private-sector workers covered by collective bargaining agreements. Thus, economic freedom has lost its self-undermining character. In the 1800s and early 1900s, economic freedom fostered industrialization, which brought on proletarianization, which led to a pro-regulatory public ideology, which then led to reversals in economic freedom. Now, late industrializers are not necessarily becoming less economically free. Indeed, there is a slight, positive correlation between present-day state urbanization rate and the Ruger-Sorens measure of economic freedom, controlling for left-right ideology.

States like California and New York are living off the accumulated capital of past economic freedom. Now that the political tide has turned decisively against economic freedom in those states, they are shedding people and jobs and growing more slowly than the rest of the country. Places like the Dakotas, Carolinas, Oklahoma, and Texas, which have reversed their anti-market policies of the past, represent America’s dynamic economic future.

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