Adam Przeworski; Fernando Limongi, Political Regimes and Economic Growth, The Journal of Economic Perspectives, Vol. 7, No. 3. (Summer, 1993), pp. 51-69.

This is of course one of the $64,000 questions in modern political science: what is the relationship between democracy and economic growth? And do China and Singapore (and the other Asian tigers) prove the latter doesn't depend on the former? Let's see what they have to say.

• p 53: "The property rights literature treats the state as the only source of potential threat. But property rights are threatened by private actors: capitalist property is threatened by organized workers, landlords' property by landless peasants." Um. Talk about missing the point. Yes, it's true that the state is not the only threat to property rights, but it's a bit blind to cite workers and peasants as the next threat. Not to put too fine a point on it, how did the landlord get that property in the first place, and why are the peasants landless?
• p 54: Democracy can't be taken for granted as a defender of property because the median person will have more power as a citizen then property as a market participant, so democracy will always be prone to redistribute property.
• p 56: There is an argument that authoritarian governments can pursue autonomous governance (meaning free from the influence of, in particular, unions and large firms) that uses the best possible policies to get growth.
• p 56: So far, this entire paper reads to me like a parody of economists who seek only abstract economic explanations for the world, completely ignoring human behavior or relegating it to footnotes: "Dore (1978) offered a culturalist explanation: 'I suspect that a major motive [of dictators]. . . is to increase national 'strength' and prestige ... and thereby their own position in the ranks of the world's rulers.'"
• p 57: More reasoning on why authoritarian states might be more autonomous, and therefore potentially better at running economies. Finally, the word "behave" appears: "What [this reasoning] fails to answer is why an autonomous state would behave in the interests, long- or short-term ones, of anyone else."
• p 58: Thinking in terms of who gets to decide how big the government is and who gets the excess economic output. Democracy, citizens decide both; autocracy, state decides both; bureaucracy, state decides how big it will be but citizens get the "fiscal residuum".
• p 60: we conclude an un-edifying tour through the literature and move on to a survey of the data. But "what is even more puzzling is that among the 11 results published before 1988, eight found that authoritarian regimes grew faster, while none of the nine results published after 1987 supported this finding. ... one can only wonder about the relation between statistics and ideology. For reasons discussed below, we hesitate to attach much significance to these results one way or another. Hence, we still do not know what the facts are." So the point of your twenty-six page paper is to tell us that neither the theoretical literature nor the existing statistical experiments can tell us anything about the relationship between type of government and economic performance? Well, a null result is information too. But why should I read the rest of the paper?

As an aside, note that an unspoken and fundamental assumption of the paper is that GDP growth is the sole important measurement of economic welfare. This is so pervasive that the authors write that "Observing Brazil in 1988, we discover that it was a democracy which declined at the rate of 2.06 percent." Brazil's economy didn't shrink 2.06 percent, Brazilians didn't become 2.06 percent poorer or 2.06 percent less happy: Brazil as a nation and as a democracy declined 2.06 percent. Ouch.

Florence Heffron, Organization Theory and Public Organizations, Ch. 6 “Power, Politics and Conflict in Organizations”

• p 183: "Nonetheless, many of the aspects and processes of organizations that have been examined to this point refute the rational organization concept." Right on. I'm going to like this book.
• p 184: "The power approach to organizations is relatively new and definitely unsettling to those who prefer rational bureaucratic theory." Wait a minute—can't we dump rational theory without getting a new single-issue theory? Organizations are very complicated, since they are made up of humans, who are very complicated. No single point of view is likely to capture all the information we need to understand them.
• p 184: conflict. I've only worked in one environment where employee conflict was, on balance, positive and productive. That is, we had professional conflict, often intense, about the nature of the product we were creating, but the conflict was a means to create a better product, was not personal, and was regularly resolved with mutual consent, if not always agreement.
• p 188: natural conflict between line and staff units. (In other jargon, line = vertical and staff = horizontal.)
• p 191: many executives (e.g., Roosevelt) encourage line vs staff conflict, because it increases the executive's power.
• p 193: authority is legitimated power.
• p 194: the ability to reward and punish. Even in the absence of authority, you may find ways to reward or punish. Control of information. Control of resources. Control of access (always be nice to secretaries).
• p 197 to 199: the passage on the power of people low in the hierarchy is key. A tremendous amount of power is locked in the norms and habits of an organization, and nominally powerful people who cannot access and alter these norms don't have real power. However, the conclusion I draw from this is not that lower-status people have more power than is commonly realized. That's true, but not the point. The point is that the power to get organizations to function effectively to accomplish goals is often simply non-existent; the boss doesn't have it, but neither do the rank and file. The typical challenge is not to change how an organization functions, it's to get it to function effectively at all. Perhaps we could say that there's a lot more negative power in the world than positive power.
• p 202: "Political behaviour does not emerge for routine, clear-cut decisions for which specific, well-known rules exist and are followed."

That was a really good chapter. Not one to skim, but one to read thoroughly.

G. R. Salancik and J. Pfeffer, “Who Gets Power- and How they Hold on to it: A Strategic Contingency Model of Power”, Organizational Dynamics, Winter 1977, Vol. 3, No. 5, 3-21

Strategic contingency theory: when an organization faces crisis, power accrues to the unit of the organization best able to address the crisis. In heavily sued organizations, the legal department has power. In organizations that need lots of new workers all the time, recruiting has power.

• p 16: "an intelligent person might react [to this theory] with a resounding ho-hum, for it all seems to obvious ...." But there are two complications: the job to be done tends to grow itself. Napoleon as an example of scope creep. Second, power institutionalizes and lingers beyond its justification. (c.f. the Polish floppy disk procurement case from Week 1)
• p 20: "one of the more interesting implications of institutionalized power is that executive turnover among the executives who have structured the organization is likely to be a rare event that occurs only under the most pressing crisis." Once you've shaped your nest to benefit yourself, why leave?

R. M. Kanter, “Power Failures in Management Circuits”, Harvard Business Review, July-August 1979, Vo. 57, No. 4, 65-75

• Organizational structure often determines who has power and how much. Three positions are "classically powerless: first-line supervisors, staff professionals, and CEOs."
• Effective power requires lines of supply (money, staff, office space, etc); lines of information; and lines of support from other people.
• p 69: a sidebar on women concludes that research shows that "when a woman exhibits the petty traits of powerlessness, people assume that she does so 'because she is a woman.' A striking difference is that, when a man engages in the same behavior, people assume that behavior is a matter of his own individual style ... and do not conclude that it reflects on the suitability of men for management." See this for a graphic illustration of the principle.

L. R. Pondy, “Organizational Conflicts: Concepts and Models”, Administrative Science Quarterly, 1967, 12, 2, 296-320

• p 297: three models of conflict. Horizontal, leading to bargaining (e.g., equal units fight for budget), vertical, i.e. bureaucratic (e.g., the workers support or undermine the boss), systems (?).
• p 300: five stages of a conflict episode: latent conflict, perceived conflict, felt conflict, manifest conflict, aftermath.
• p 312: conflict is often felt negatively; minor conflict leads to pressure to stop the conflict but preserve the relationship (can't you just get along?); major conflict leads to pressure to change or end the relationship. If people are stuck together, there can be permanent conflict in a stable relationship.
• p 317: systems model of conflict. about problems of coordination. Various means of resolving conflict have costs; that is, if two departments fight over budget, giving them both a big budget resolves the conflict but is expensive. Hence, "running a tight ship" leads directly to conflict.

K. W. Thomas, “Conflict and Conflict Management”, in M. D. Dunette (Ed.), Handbook of Industrial and Organizational Psychology, Chicago: Rand McNally, 1976, 889-935

A few questions popped up during my reading and thinking, so I went back to the IPCC report again.

1. Q: If the Third Assessment Report was the TAR, what is the Fourth report called? It couldn't be the FAR, because that could be confused with the First Assessment Report. Unless the FAR was like WWI: they didn't know there would be a WWII, so they didn't know to call it WWI. In which case the first FAR was actually just the AR, so the Fourth could be called the FAR, but then the Fifth would have to be the SFAR (Second FAR). A: It's called the AR4.
2. Q: what are current GHG emissions? A: about 50 gigatons of CO₂-equivalent per year as of 2004, coming from energy use (26%), industry, agriculture, forestry, and transport (each between 10 and 20%), and a few smaller sources.
3. Q: How much CO₂ gets absorbed every year? Does any emission level above zero damage the climate? A: Can't find the answer in the IPCC AR4.
4. Q: What's up with that special language like highly likely and exceptionally unlikely? How can I incorporate those terms into my normal speech?

   A: The IPCC defines its terms thusly:

   Term                   Likelihood of the occurrence/ outcome
   Virtually certain      >99% probability of occurrence
   Very likely            90 to 99% probability
   Likely                 66 to 90% probability
   About as likely as not 33 to 66% probability
   Unlikely               10 to 33% probability
   Very unlikely          1 to 10% probability
   Exceptionally unlikely <1% probability

   Take for example this product, a bag of colored rocks that you can tape onto your stereo cables to improve the sound. We can say that it's

   virtually certain that the product is just colored rocks in a plastic bag, and doesn't actually "[reduce] comb filter effects caused by very high sound pressure levels in the corners when music is playing"

   very likely that the author knows this

   about as likely as not that the site makes serious revenue from the same fools that buy hundred-dollar audio cables or thousand-dollar power cords

   unlikely that the site is a hoax

   exceptionally unlikely that most of their revenue comes from skeptics who think the site is likely a hoax but can't resist buying something just see if it really takes your money

More on the topic of presidential nominee advisors (see 1, 2 previously). A mixed bag, and the article itself has some problems, but still very interesting.

Bad sign: "Just before the Iowa caucus, I saw Goolsbee approach New York Times columnist David Brooks in Des Moines and gush when the quirky conservative agreed to pose for a picture."

Good sign: "Gration is a vocal proponent of eliminating nuclear weapons globally." I'd never heard of him before, but he seems like an interesting military guy, along the lines of Anthony Zinni. Who, I just discovered reading his Wikipedia article, is allegedly a VP possibility for Obama. I think that's precisely the sort of Wikipedia factoid that is utterly unreliable yet utterly fascinating. Back to Gration: although the article doesn't specify this detail, I love the idea of Obama having a white American fighter pilot as his Swahili translator in Africa.

Mixed sign: "Probably the closest thing the Obama campaign has to a Richard Thaler on foreign policy is Lee Hamilton, the longtime Indiana representative who recently co-chaired the 9/11 Commission and the Iraq Study Group." The 9/11 report could have been much worse, but it also could have been much better. An awful lot of very important information was left missing and important questions unanswered, and Hamilton seems to deserve a big share of both praise and blame. I guess the most optimistic reading would be that it was amazing anything useful came out of that report at all, given the climate and pressure to lie and whitewash.

Bad writing: "And yet, just because the Obamanauts are intellectually modest and relatively free of ideology, that doesn't mean their policy goals lack ambition. In many cases, the opposite is true. Obama's plan to reduce global warming involves an ambitious cap-and-trade arrangement that would lower carbon emissions 80 percent below 1990 levels by 2050. But cap-and-trade--in which the government limits the overall level of emissions and allows companies to buy and sell pollution permits--is itself a market-oriented approach." But cap-and-trade is conventional wisdom for addressing climate change, and is baked into Kyoto, which was written over ten years ago. No audacity points to the Obama team for this one. The audacious policy, as I understand it, would be to tax oil as it comes out of the ground.

Ann Florini, The Coming Democracy: New Rules for Running a New World, Chapter 8, Brookings, 2003

Global warming, etc.

My own summary of my understanding of the problem. First, there's no precedent in human history for any collective action big enough to solve the problem. That notwithstanding, how would we solve global warming?

The theoretical best solution probably looks something like this: total GHG emissions for the planet are capped at some level. Zero or negative would be good, but even in a fantasy land that's unrealistic, so let's say X gigatons/year, where X is a number small enough that we don't radically change the climate. This level of allowable emissions is distributed across countries or smaller units. GHG markets then provide economically efficient distribution of pollution reduction. If a political unit exceeds its allowed emission total, it is sanctioned or subject to military coercion (I keep coming back to the mental image of the (inter)National Guard coming in to shut down a factory in an updated version of Little Rock).

Questions:

• Are we already committed to radical climate change even if we stop emitting today?
• What number is X? Some earlier reading led me to believe it was 7 gigatons/year, but this source suggests current global emission is already 28 gigatons/year in 2005 (ignoring, for the moment, CO₂ vs CO₂-equivalent). Is the difference because the earth absorbs billions of tons per year?
• What are all the non-linear factors that could mess this up, like ice shelves collapsing, permafrost melting and releasing methane, etc etc?
• What's the best political unit over which to distribute emission credits? Countries? Individual humans? What if everybody got a personal carbon emission credit? (logistics aside—assume everybody gets a cell phone with a DNA reader to access their account)
• If all that is sorted out, what's the market price of GHG? The trigger for this whole chain of thought is, the current European price is €20/ton. What would that price be if based on a real, global, meaningful limit? The reason I want to know is that we can then figure out which alternatives to fossil fuels are economical. At the current Euro price, I previously calculated that coal is getting about a 50% subsidy: it costs 4¢ per kilowatt hour, but the GHG emissions would cost another 2¢ if purchased in today's carbon market. But what should that 2¢ really be? 2? 4? 20? If GHG-safe power costs 20¢/kWh, then orbital solar power and other really far-out stuff should move to front and center.
• How would we transition to this economy?
• How would we address the moral hazard and fairness issues that come with caps? Distributing the right to pollute evenly across all humans is better than giving the historical polluters big credits (as Kyoto does, by capping everybody relative to 1990 levels, effectively punishing anybody who wasn't polluting heavily then), but still lets the US and other big historical sources off the hook. If each human has an equal credit, then anybody with a big family is rewarded. What will keep people from having lots of babies immediately just to get more credits? What if parents had no access to their children's credits? What if nobody born after the starting point got credits?

David Vogel, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility (Washington, DC: Brookings Press, 2005), pp. 121-132.

• p 123: BP set up an internal emission reduction plan and internal trading market, and successfully reduced BP's operational emissions by 10 percent between 1990 and 2002. However, they then shut down the market. It's likely that they only implemented the changes that made business sense anyway, like more efficient lightbulbs, or not wasting natural gas by flaring it. Their total investment in solar power was smaller than their investment in rebranding with a green-colored logo; and they ended up writing off some of their solar investment, suggesting it was not a profitable business.
• p 128: Bob Lutz in January 2005: "Right now the drive for more and more power in cars is way larger than the drive for more hybrids." 1) Was that even true in 1Q2005, and is it still true three years later? 2) How much of that was marketing-driven? 3) Will anybody miss GM when it's gone? (Note that Toyota, while less utterly stupid, is also far from perfect.
• On climate change,

  as the Washington Post observed, much of "business is far ahead of Congress and the White House."

  But that's because Congress and especially the White House are far far behind the science and even the popular will. Not to mention that the same businesses spend $20m/yr to keep Congress far behind. Note also that Clinton got more oil and gas money than McCain this election cycle, and Obama was tenth on the oil and gas love list.
• p 131: By January 2004, "only fifty of the thousands of American firms with significant greenhouse gas emissions" had adopted even token reduction commitments, and "only fourteen announced numerical goals."
• p 132: a GAO 2003 study says that voluntary business agreements will reduce emissions in the US by only 2% compared to business as usual. Only legal requirements (the article, not the GAO, argues) will have substantial effects. Most emitting companies in the US "are virtuallly ignoring the financial or environmental risk posed by climate change."

Environmental Defense website on corporate partnerships

Homework

Two page, double-spaced paper on what the business community in your country (or state) are doing about climate change.

• Greenhouse Gas Emissions in Washington State: Sources and Trends
• House OKs climate blueprint to set limits on greenhouse gases

Real manatees, 1,200-pound mammals sometimes referred to as 'sea cows,' are not considered the most agile of creatures and often get caught in boat propellers. —AP

Uh, yeah. If only those clumsy fools would stop bumbling into boats. Certainly the fact that humans are operating motor boats in manatee habitats is not the problem. This reminds me of Diddy's claim that the other guy's "face ran into my fist.

N.B. The picture above links to a fairly mild story. Here is a much more pertinent story about manatees and boating, but the picture is slightly more gruesome. This story claims that "25-30% of manatee deaths statewide [Florida] are attributed to watercraft injuries". However, it also claims that "the difference between the force of a strike at 30 miles an hour is exactly twice that of a strike at 15 miles an hour, all other factors being equal". Grammar error aside, the problem with that sentence is that kinetic energy increases by a factor of four if the speed doubles, and kinetic energy is more pertinent than force in determining the severity of the wound.

P.S. Yes, I am procrastinating from class public finance reading. You would too if you had to read that "if private savings currently equals 5 percent of GDP, and the interest elasticity is .1, then reducing the tax by 50 percent increases the return to capital by 12.5 percent, and increases savings by just over 1 percent, or .05 percent of GDP". And this is a relatively well-written and very readable text.

Stiglitz: Chapter 18 (except 510-513, US taxes), 19

• p 483: Taxes often end up affecting people other than those intended. In the United States, social security tax is paid equally by employers and employees, but economists believe that employers have enough power to shift almost all their share back to workers. This makes it a bad tax, because it is not transparent: the actual incidence (distribution of tax burden) differs from nominal incidence. (This becomes apparent when people argue that low-income Americans don't pay any tax. It's true that workers below a certain income level don't have any tax deducted from their paychecks. But the employer still pays payroll tax, and to compensate the employer reduces the wage of the worker. This can be so invisible that even the US Treasury leaves it out of some analysis (see "Who Really Pays?" section in that link))
• p 484: Subsidies have the same shiftiness problem. A subsidy paid to corn farmers may not stay in their pockets: "if the price of corn falls, the benefit is shifted forward to consumers; if the price of land ... increases, the benefit is shifted backward to the owners of the land"
• p 486: If an item currently selling for $1 is taxed at 10¢, the supply curve shifts by 10¢. In a perfect market, sellers will always raise prices as much as the market will bear. How much the market will bear is determined by elasticity. If price elasticity of demand is 1 (or perhaps -1?), then the new equilibrium price will be $1.05, and half the tax ends up landing on consumers.
• p 495: taxes on purely inelastic factors will land on the intended recipients and can't be shifted. The supply of crude oil is long-run inelastic, so a tax on oil in borne by owners of oil and can't be shifted.
• p 496: taxes on purely elastic factors are shifted completely. "The supply of capital to a small country is ... highly elastic." The capital can go anywhere, so if the country tries to tax it, it will go to another country. The only way for anyone in that country to get capital from abroad is to offer a return equal to what the capital can get elsewhere, plus the tax. So the tax is shifted to local users of capital, not paid by the suppliers of capital.
• p 496: Philadelphia's wage tax ultimately is paid by landowners.
• p 498: with imperfect competition, these rules change.
• p 507: corporations don't bear taxes. Shareholders, workers, and consumers bear corporate taxes. (Yes, but how do you push the corporate tax burden onto shareholders instead of workers and consumers?

Chapter 21, pp 582-592

• p 584: "FairTax" proponents are correct that, in theory, a tax on consumption is macroeconomically better than a tax on income. But in practice, many factors intervene, most notably foreign investment.
• p 589: Capital gains tax, with provision for deducting losses, may increase risk taking (in a good way, I think the point is) because the government is effectively sharing the risk for people who could not otherwise find any investors.
• p 591: His name is Steven, not Stephen. Also he's adopted and his biological father is a Syrian political science professor.

Chapter 24, pp 678-686, and 25, pp 704-711( Tax avoidance)

• There are lots of ways to avoid taxes (legally). They boil down to moving taxes to the future, or moving taxable assets to a category with lower rates.
• In 1997 Americans spent $60B on illegal drugs. The US underground economy is about seven or eight percent of the size of the visible economy.

Rajan, R.S. (2004), "Measures to Attract FDI: Investment Promotion, Incentives, and Policy Intervention", Economic and Political Weekly, January 3.

A new study involving 32 developing economies indicates there exists a statistically and economically significant negative [correlation] between administrative costs and FDI to GDP ratio.

If there's a lot of paperwork, you get less foreign investment. If you think foreign investment is good (which is the consensus view), this is a bad outcome.

Das-Gupta, Arindam (2005), “The economic theory of tax compliance with special reference to tax compliance costs” in Amaresh Bagchi (Editor) Readings in Public Finance New Delhi: Oxford University Press, pp. 250-255. (Rest of the chapter is optional)

M&M, Chapters 14, 15 and 17. (Optional)

Fletcher, K. (2002), “Tax Incentives in Cambodia, Lao PDR, and Vietnam”, Paper prepared for the IMF Conference on Foreign Direct Investment: Opportunities and Challenges for Cambodia, Lao PDR and Vietnam Hanoi, Vietnam, August 16-17, 2002

Thomas Mann is a guest speaker in class today, and we have an extra dozen Korean visitors from Jungwon in class, doubling class size. Mann:

The election ... but whoever wins, they'll discover all of the limitations of the institution of the presidency. Campaigning and governing are different tasks, but they have effectively merged in US politics. Campaigns last for years and governing involves using campaign strategies to build support. ... However, there was no golden age in American democracy; the institutions have never performed exactly as intended by the framers.

Two important properties of American governing institutions: separation of powers and ...

The first article of the constitution is about Congress, not the President.

Political parties are not mentioned in the Constitution, and the framers were very worried about parties.

There has been a natural accumulation of power to the president under conditions of threat or perceived threat. It will be interesting to see the extent of the backlash and whether the next president will be similarly inclined.

Q: in many countries, the armed forces constitute a fourth branch of government. How has the US avoided this problem? A: Civilian control of the military has always been a central idea. Some generals have gone on to the presidency, but civilian control is a strong norm. (Note that Michael Hayden is serving as director of the CIA while still holding an active miitary commission. Johnson and Carter also appointed active military to this job, so it's not just another Bush attack on our norms)

Two biggest perceived problems with institutional design of US government: electoral college, and under-representation of big states in Senate.

Q: In a system where lobbying is allowed, how do you balance the difference in lobbying power between businesses and civil society? A: We haven't solved this in the US.

Class lecture

Back to property rights, public goods, etc. Property rights in extreme:

This shockingly bad BBC article is better than most of the US-based articles: although it introduces the purpose of the missile shot as protecting human life from the deadly hydrazine in the satellite, it at least mentions that one possible alternative motive for the satellite shoot-down was to test the anti-satellite weapon. But it presents the flimsy hydrazine excuse as fact and the alternate motive as merely a "Russian claim". And the graphic at the bottom is so misleading as to disqualify any person involved in its publication, from the graphic artist to the editor, from ever doing any fact-based journalism again and, in a just world, have them banished to Sports or Style or Royalty or other content-free sections.

When a missile hits something in orbit, you get a lot of smaller things in (depending on the relative masses and speeds) roughly the same orbit. Some higher, some lower. But still in orbit. They don't fall out of the sky as if their wings broke off, the way the picture might lead you to believe. They'll come down as their slightly varying orbits bring them through thicker bits of the upper atmosphere, which slows down the pieces which puts them in lower and lower orbits until they orbit into the dirt. The Australian dirt, by preference.

That stupidity aside, the plausible reasons for the shoot-down that I've heard:

1. To make sure some secret bit of spy technology is kept secret
2. To saber-rattle, especially in response to the (even more stupid and destructive, because it was done to a satellite that wasn't in a decaying orbit and so the debris drastically and semi-permanently increased the space-junk count in Earth orbit) Chinese test last year
3. To help justify the budget for an unnecessary, expensive, and destabilizing military program

Kudos to the BBC for mentioning even one of these reasons, which is one more than any US-based MSM reporting I've seen.

Update: the Washington Post story isn't bad, actually.

Disclaimer: pressed for time, summaries from skimming only.

Rubin, P. (2005). Legal Systems as Frameworks for Market Exchanges. In Menard C. and Shirley, M.. Handbook of Institutional Economics. Elsevier.

• Legal institutions last for centuries. Countries' legal systems very clearly reflect who colonized them, and even vary depending on what fraction of population the colonial settlers actually comprised.
• You can't just graft on a foreign legal system.
• legal protection of private property correlates well with economic growth. To put on the Marxist hat for a moment, that's not exactly a shocking surprise, especially since the term "economic growth", as used, implies a lot about the nature of the economy being measured. In other words, protecting property rights correlates well with the growth of a system in which some people own a lot of stuff. In that light, it's a bit of a "duh?". From there we circle back to and perhaps dead-end at the usual arguments about GDP versus other measures, productivity versus happiness as the ultimate goal, self-determination, paternalism, etc. Just a thought.
• "The major cost of opportunism [cheating] is neither the cost of cheating, nor even the cost of precautions taken .... Rather, it is the lost social value from the otherwise profitable deals that do not transpire." This sounds dead-on. China's miracle is in getting everybody to work in productive ways. In broken economies, wealth creation just doesn't happen much; people probably still expend a lot of effort, but not on creative activities.
• Common law evolved out of competing legal systems in the same country and embodies the victory of Merchant Law over the King's Bench, the Exchequer, the Court of Common Pleas, and other suppliers of judiciousness.
• Implications: institutions are hard to change. Rule of law and property rights increase economic well-being. Competing legal systems within the same jurisdiction are useful for generating efficient outcomes.

Posner, R. (1998). Creating a legal framework for economic development. The WB Research Observer Vol. 13 No. Feb. 31998. p. 1-11

When trying to improve the legal system in a developing country, as seems to be required or at least helpful for growth, it may make sense to focus on getting precise rules first, and adding staff and other institutional improvements later. Copying legal rules in bulk from other countries, with some adjustments, might actually work fine.

To the extent that the business community in a poor country has its own law, it may be better to codify that law than to try to borrow another country's model. But the law may be underdeveloped in a poor country ... and the task of codification may require technical skills of drafting and organization that are in short supply. ... It is important, however, to adopt the imported code to the local culture, a task for local, not foreign, lawyers ... I do not advise dispatching European or American lawyers to tell acountry how to adapt foreign laws to its legal and social institutions and stage of economic development.

Meanwhile, don't completely neglect the judges. One cost-effective idea is to offer very big pensions, which judges forfeit if removed from office for corruption.

As for granting extensive rights to criminals, this is bound to undermine the efficacy of the criminal laws, and by doing so, unsettle property rights. Rights make it harder to convict the guilty as well as the innocent.

I am so not happy with the idea that Posner is a lifetime-tenured sitting judge in my own country. Let's at least hope that, given the chance, he would rewrite that sentence to say "As for granting extensive rights to the accused ...". He's already decided that property rights are more important than civil or human rights (a possibly unfair simplification, and I'm running low on time again so I'll just note in passing that this is back once again to the "does capitalism need democracy, Asian Values, Singapore/China as example" question), the least he could do is concede that not all suspects brought before him are necessarily guilty.

Judicial Institutions, World Development Report (2002). Chapter 6.

• Developed countries have about one professional judge and six judicial staff for every 10,000 people
• Key themes in judicial reform: increased accountability of judges, simplification, increased resources.

Note, by the way, a still-unfolding judicial corruption scandal in Malaysia. Note further that Anwar Ibrahim leaked the tape that started it all. Another data point supporting the notion that the main way in which the shell around the corrupt elites cracks is from within?

Djankov, et al. (2002). Courts. (Manuscript)

Based on studying the exact rules for evicting tenants and collecting on bounced checks in 109 countries, the authors conclude that the higher formalism of civil law (what the French have) doesn't work as well as common law (what the US and UK have), which may have hurt developing countries who got a civil law transplant.

Dam, K. (2006). Legal Institutions, Legal Origins and Governance. Chicago Working Paper Series.

It's hard to give a good presentation, especially if you have little experience speaking in front of groups, or if you are speaking in a foreign language. I would like to tell you some things that I have learned as a presenter and an audience member. There are three important ideas: practice, practice enough to give a relaxed and comfortable conversation, and practice enough that you don't need Powerpoint slides. There is one most important idea: practice.

Now that I've mentioned the importance of practicing, I have a question for you. Why are you giving a presentation? Aside from the fact that your boss or your teacher told you to, I mean. Why are you doing this, and how will you know if you succeed?

Let's think a bit. What does a presentation offer that nothing else offers? People can read, they can watch a video, they can listen to a recording, or even a webcast of a presentation. Those are all more convenient, but none of these is the same as an in-person presentation. Why? What is unique and special about an in-person presentation?

The human connection. So if you give a presentation but don't make a human connection, you create a wasted and probably unpleasant experience for yourself and for your audience.

What else is special about a presentation? Two-way interaction. You can see them, and hear them. So you can adapt to your audience, which means that you can do a better job of teaching them something. Remember that it's impossible to teach: it's only possible to create a chance for someone to learn. With a book there is only one chance to learn, but with a presentation you can get feedback and make adjustments, and provide more, and more specific, chances to learn.

So, what are the goals of a good presentation? Make a human connection, help your audience learn something, and entertain. If you do all three, you will have a successful presentation.

How are you going to do this? Imagine that your friend has just asked you, "hey, you know a lot about (some topic), right? Tell me something about it." Now have a conversation with your audience. You are going to talk and move and point, and they are going to respond with body language from their seats, and you will have a dialog. Would you respond to your friend by reciting everything you know on the topic in alphabetical order as detailed on slides? I hope not.

Instead, think in terms of your goal. You want to create lots of chances for everyone in the audience to learn. You must provide many chances in many modes: visual, auditory, and kinesthetic are the classic modes, but also think about input versus output, reading versus writing, listening versus speaking, absorbing versus creating. You must touch as many modes as you can, without being a clown, and in particular you must make your audience do some work.

Each person will respond differently. Pick one or two most important ideas that you want everybody to learn, and repeat them; beyond that, don't worry whether everybody understands everything. In fact, don't even worry about covering 100% of your material. It's better to have a relaxed conversation with the audience in which each person retains two or three points, maybe even the important points, and has a nice time, than a presentation where everybody is asleep or thinking about lunch and retains nothing.

The tips:

1. Practice. Stand in front of a mirror. Start a timer. Go. When the timer goes off, stop. If you didn't cover what you needed to, cut stuff and start over, until you can say what you need to say in time and without rushing. If your talk is over ten or fifteen minutes, do this in sections.
2. Think about your audience. Who are they? How are they going to react? If they don't understand you, how will you know? How and when are you going to test for comprehension? for interest? How might you need to adapt in the middle of your presentation? Practice being interrupted with imaginary questions, and adjusting accordingly. Practice getting more detailed. Getting less detailed.
3. Present without Powerpoint slides. Your audience should have a conversation with you, not with some text on a projector screen.
4. Practice until you can do the whole thing without notes. At most, you can have one card to remind you of the basic topics. Reading a speech is not having a conversation.
5. Face your audience. Look at them. Make eye contact. Don't turn your back. Don't look down.
6. Speak comfortably. Vary your pace and volume and tone. Especially if you are not a native speaker, your audience will much prefer listening to your casual voice, which will be free and easy (because of all your practice), than your formal voice, which will be stilted and awkward.
7. Be bold. Lowering your voice or trailing off signal that you lost confidence and you should be ignored, so speak confidently and don't send that signal.
8. Move.
9. Stop when your time is over.
10. Make the audience think. Ask them a question, wait in silence for five seconds, and then answer your own question. Don't expect answers from the audience, and don't make everybody uncomfortable by waiting for them. Just pause enough for them to use their brains, then give them the answer. Do this with easy questions at the beginning, harder questions later on.
11. Don't set yourself up to fail. The best time to ask if there are questions is when you can see someone wants to ask a question. Don't ask "are there any questions?" because the answer could be no. Solicit questions in a way that makes the audience think and helps create more learning chances: "Imagine yourself trying this technique I've just showed you tomorrow morning. How will your colleagues react? Tell me some examples of how you imagine them reacting."
12. Before you decide to use text or pictures, ask yourself if you really need them. Would you use them while explaining to a friend? Maybe you would draw her a picture. I hope you wouldn't use bullet-point text. During your presentation, try to draw pictures on a board instead of showing slides. The audience watching you draw wants you to succeed; the audience receiving new slides is just consuming.
13. If you do need to use a computer to present pictures or data, do so in a way that your body and voice are still the focus. Does music, animation, clip art, or a zippy sound effect serve your goals of making a human connection and providing chances to learn? Are they likely to entertain your audience or distract or annoy them?
14. Test everything before you present. Give a complete dress rehearsal in the real space. If you have drawings, make the drawings. If you have a presentation, load it and use the computer. This reduces the chance of problems. And when the problems happen anyway, you will not be surprised and you will continue with your human conversation.

Resources

• Dick Hardt's OSCON 2005 presentation on Identity is a great example of polish, practice, and entertainment value. The content is irrelevant for our purposes: study and understand the style and technique.
• Hans Rosling at TED 2006; an entertaining presentation of global statistics. Notice how he keeps himself the focus despite the incredibly sexy visual display.
• Some very good, practical tips on presentation
• My own post from last semester, based on obversation of many presenters who did not practice. A bit more critical.
• The best powerpoint presentation of all time (that's not a compliment)
• Tufte on Powerpoint

G. Allison and P. Zelikow, Essence of Decision: Explaining the Cuban Missile Crisis. Longman, New York, 1999

Irving Janis and Leon Mann, Decision-Making Strategies, in Barry Staw (Ed), Psychological Dimensions of Organizational Behavior, New York: Macmillan, 1991, 479-496

Charles E. Lindblom, The Science of "Muddling Through”, Public Administration Review, Vol. 19, No. 2 (Spring, 1959), pp. 79-88

Herbert Simon, Making Management Decisions: the Role of Intuition and Emotion, Academy of Management Executive, 1987, 1 (1), 57-64

Dennis P. Wittmer and Robert P. McGowan, “Five Conceptual Tools for Decision-Making”, in J. Rabin, W. B. Hildreth and G. J. Miller (Eds.), Handbook of Public Administration, 3rd ed., Boca Raton, FL: CRC Press, 2007, pp 315-342

Roger Cowe, “Business/NGO Partnerships -- What’s the Payback?” Ethical Corporation April 2004.

Deep partnerships between NGOs and companies, as opposed to "loose relationships or traditional sponsorship". Some obvious risks, such as tarnishing the reputation of the NGO, which is its primary asset. Less obvious risk: partnering with a company which later gets acquired by a less friendly company.

Key success factors (paraphrased): the company has to be serious; the NGO can't let itself get co-opted; both parties must benefit; the participants must have real authority within their organizations.

Bottom line: If NGOs want to make a difference, they have to partner with companies who are actually part of the problem, and get them to change behavior, while at the same time not get taken advantage of as a PR gimmick.

Glenn Prickett, “Can corporate-NGO partnerships save the environment?”, Posted February 7, 2003.

Answer: probably not, but any little bit helps. And "NGOs also need to learn to work more collaboratively with each other. Too often ego and competition for donors and media attention prevent NGOs forging alliances that could yield larger-scale results. Competition among NGOs leaves corporate partners confused. The Center for Environmental Leadership in Business has found that it is often harder to get NGOs to collaborate than companies in highly competitive industries."

J. Austin, “Strategic Collaboration between Nonprofits and Businesses:, Nonprofit and Voluntary Sector Quarterly, 29:1, Supplement 2000, 69-97

Five in-depth case studies and ten more case studies (each comprising interviews) to support some new theories on how to think about NGO/business partnerships.

• p 73: three stages on the Collaboration Continuum: philanthropic (example: write a check every year), Transactional (example: use designated company time to help an NGO), Integration (CEO serves on NGO board).
• p 76: Collaboration Value Construct: NGO gets money, stuff, access to other corporations, etc; corporation gets reputation, image, employee morale, recruiting and retention, etc. More value at deeper stages on the Collaboration Continuum.
  • Generic resource transfer: cash for image.
  • core competencies exchange: CARE's knowledge about coffee farming in exchange for Starbucks' promotional abilities and retail network
  • joint value creation. An MCIWorldCom manager: "They have unbelievable assets, but they don't necessarily know how to exploit them all. When you work with them in a really close partnership, they will let you use those assets."
• p 81: Alliance drivers: strategic alignment (Time-Warner with "Time to Read" NGO); personal relationships; shared visioning (this article is really full of painful buzzwords, the author being from Harvard Business School, and I kept my mouth shut as long as I could but seriously: shared visioning).
• p 85: Alliance enablers: communication etc
• p 88: no marketplace for matchmaking; hard to value most activities and put a price tag on them.

Case: Public-Private Partnerships

Discussion Questions (it's my turn this week):

• The case mentions a public-private partnership, possibly in the context of a construction project to attract a new sports team. What defines a public-private partnership? What are the benefits and disadvantages of a partnership?
• What are the economics of attracting a professional sports franchise?

Case: Financing Slum Rehabilitation in Mumbai: A Nonprofit Caught in the Middle

• What governance exists in Indian urban slums?
• Is it significant that certain organizations are all-male or all-female? If so, how?
• Which stage (from the Austin article) is the SPARC-Citibank relationship in?
• Citibank and Homeless international are concerned about uncertainty in several different factors. Which factors, and what could be done to reduce uncertainty?
• Is this project in its current state benefiting its stakeholders?

Case: Financing Slum Rehabilitation in Mumbai: A Non-Profit Caught in the Middle: Epilogue

Tadashi Yamamoto and Kim Gould Ashikawa, Corporate-NGO Partnership in Asia Pacific (Tokyo: Japan Center for International Exchange, 1999). Suggested.

Discussion of the case. There's a case? Crap. On the bright side, it turns out nobody else realized there was a case to read either.

Here's an article about the subject of the case, Casas Bahia. It's one of the biggest retailers in Brazil, selling furniture and appliances on credit to poor customers in the slums

The big question: is any poverty alleviation happening thanks to Casas Bahia? Not on the income side; do their consumers have the chance to purchase things that they couldn't otherwise purchase? Is their overall wellbeing or standard of living better?

Reading discussion

Example from India: CSR evolving from business groups centered around commodities and trying to stabilize prices.

The first and second readings synthesize nicely to make this point: corporations put forth CSR as the means to forestall regulation that might otherwise put "non-negotiables" like the rights of corporations to exist back on the table.

Are the business values (which I quoted in my reading notes) actually those that businesses want? Blowfield's list is closer to the classical liberal values, but what companies actually want is to secure protected rents (the economic term for monopoly profits); they don't want free trade, they want trade on terms that benefit them and hurt potential competition.

Should local religious values be considered within CSR? Buddhism in Myanmar, Islam especially in banking.

Myths about the bottom of the pyramid: the poor don't have any money. Joel's note: Let's think about the issue behind the notion that the poor don't have money. Money is a red herring; the real issue is that the poor don't have anything that rich people want. That's not strictly true: there's sex trafficking, importation of cheap labor, etc. But in general, the poor market is neglected by the wealthy because the poor have little to offer. Of course the poor (to generalize three or four or five billion people into one word) do have economic activity; I'm sure that many or most impoverished people work harder every day than I do. But a lot of it is black market, or not monetized, or very inefficient, or otherwise of low value, and especially of low perceived value by the rich. So the real issue with marketing to, or exploiting, or making profit from, the bottom of the pyramid, is how to convert the current labor of all of these people into an industrialized or post-industrialized context.

Michael Blowfield, “Corporate Social Responsibility: reinventing the meaning of development?” International Affairs 81, 3 (2005) pp. 515-524.

Some very refreshing skepticism about CSR. Not from the angle I've been concerned about, that it's simply a PR stunt, but from a different direction. Rather: To what extent does simply thinking in terms of CSR mean accepting basic premises that should be examined more carefully?

the right to make a profit, the universal good of free trade, the freedom of capital, the supremacy of private property, the commoditization of things including labour, the superiority of markets in determening price and value, and the privileging of companies as citizens and moral entities ... CSR has had no impact on these ... non-negotiable values

In other words, if you substitute the word "morality" for corporate social responsibility, as many people implicitly do, you end up with a very constrained definition of morality before you've even begun making judgments.

Rhys Jenkins, “Globalization, Corporate Social Responsibility and poverty,” International Affairs 81, 3 (2005) pp. 525-540.

More skepticism. Does CSR have any bearing on poverty reduction? Even the UN Global Compact fails to explicitly mention poverty reduction. The assumption seems to be growing that FDI in and of itself is a poverty-reducing force, and that providing FDI in a developing country is a moral act. But MNCs can hurt the poor, e.g., by marketing unsafe or inappropriate products.

Three channels through which corporations can reduce poverty. Directly through employing people or buying from local suppliers; through efforts to enrich the poor enough to buy corporate products; and through government revenue streams (e.g., taxes on resource extraction). Each of these channels can be subverted, for example by free export zones that are untaxed and use local labor only to process materials brought in from elsewhere.

Employment at a higher than local wage is a positive, but the total number of people so employed is only 19 million, which is one percent of the number of people living at US$1/day or less.

Only one out of 248 codes mentioned taxation. Taxation could be made an important part of CSR codes (and, one hopes, corporate behavior). Few codes mention corruption.

Conclusion: CSR is unlikely to contribute materially to poverty reduction, nor can it easily be reformed to do so.

C.K. Prahalad and Allen Hammond, “Serving the World’s Poor, Profitably,” Harvard Business Review September 2002.

Rhys Jenkins in the previous reading take issue with the quality of Prahalad's arguments, and it's easy to see why and to agree.

Take the assumption that the poor have no money. It sounds obvious on the surface, but it's wrong. ... Grameen Telecom's village phones ... generate an average revenue of roughly $90 a month ...

And that supports your point? The aggregate of a very small amount of money is still a very small amount of money. If an average cellphone bill in the US or Europe is (just to guess wildly) US$40/mo, then a village of 100 such people, half of whom have phones, will generate at least $2000/mo.

Customers of these village phones ... spend an average of 7% of their income on phone services—a far higher percentage than consumers in traditional markets do.

So even after these people desperately squeeze the rest of their budgets to get this essential service, they still aren't producing much revenue. Whether or not the poor make up a great potential market is not my point; my point is that Prahalad and co-author aren't making a very competent argument.

The article feels like a collection of cherry-picked, qualified, vague anecdotes: this company has the potential to generate $200m/year in revenue with candy for the poor; this company provides smart ATM cards; this company has internet kiosks that provide access for up to half a million people. Although a flavor of ROI, "return on capital employed", does appear, there are no hard numbers for it.

The conclusion is that corporations should try to market to the poor because it will be a moral act—the corporations will be more accountable and effective than the governments and aid agencies have done— and because it is profitable in and of itself. In reaction, I find Rhys Jenkins concerns to this entire line of thinking to be extremely convincing.

Classmate presentation

• Economic challenges
• existing arrangements (Kyoto, CDM, carbon market)

All of the current thinking about global warming solutions is in either economic terms or technological term. How can we build a market with both carbon trading and carbon tax and make it efficient and effective?

Coal is still the cheapest source of energy, so developing countries will still rely on it for the next 30 years as the main source of energy. Other perspectives on solutions: population control. (Interesting. More generally, how many of different policy issues are positively linked? Improved educational opportunities for women tend to reduce family size. What does the overall web of development policies look like? Improving women's education is win-win-win. Improving medicine and nutrition make people's lives better but do also lead to more people living longer, which is bad in terms of overpopulation and global warming and over?)

Class discussion on these issues: "how can you convince people that if you give birth to more babies, you are degrading the environment?" Our Chinese classmate is taking a more hardline stance on population control, but other classmates are skeptical about means. ... Perhaps there isn't such a direct link between population growth and climate impact; curbing population should be a last resort. (Last resort? What are real last-resort measures, and when do we reach the last resort? ) More skepticism that population growth is a causal factor for global warming. Huh? surely the total footprint of human activity is directly, indisputably linked to the number of people who act and the intensity of their actions?

Existing arrangements

• UNFCCC (United Nations Framework Convention on Climate Change)
  • Kyoto Protocol to the UNFCCC
    • Joint Implementation: emission trading program within industrialized countries
    • Clean Development Mechanism: emission trading program between industrialized and developing countries.
      • CDM in 2006 accounted for hundreds of millions of tons of CO₂ emissions averted. Remember that we need on the order of ten billion tons/year reduction to really make a dent, and much more to actually reverse global warming.
      • "In early 2007 the CDM was accused of paying €4.6 billion for projects that would have cost only €100 million if funded by development agencies".
      • China lands 60%+ of CDM funds. It seems like, in game theory terms, the rest of the world has a sort of blackmail relationship with China, just as we all do with North Korea. Give us cash or we'll destroy the planet. I don't mean to say that this is a deliberate policy of the Chinese government, but it may be an accurate description of the inevitable, emergent relationship between China as a whole and the rest of the world (in contrast with North Korea, which clearly does intend blackmail)
• G8 Summits, L20

Problems with Kyoto: sanctions only work on governments which are already cooperating. Time horizons are too short. Moral hazards. Looking at the outline I just made, it's clear that Kyoto basically the only game in town, and that even if it's too little too late, it comes with a lot of institutional structure and that's going to be the foundation of future progress.

Shouldn't it be easier for countries to join Kyoto, perhaps partially, instead of all in or all out? Why not have additional agreements, such as between pairs of countries, to have more things in place to catch what slips past Kyoto?

I've been talking with a classmate about fundamentals vs superficials. Climate change efforts keep failing because of fundamentals: countries won't bind themselves to any agreement that has any real cost, because the politicians who make those decisions are controlled by companies, and the companies are driven by profit and controlled only by the marketplace (which to the extent they can control or at least manipulate), which is consumers, and consumers aren't willing to give up anything. So we're screwed, or at least prevented from real climate change mitigation, until several big parts of our economic system change: how companies behave and how consumers behave.

Carbon tax

• Often regressive.
• Should carbon moving over a border be taxed?
• If China has taken on carbon emissions from the US, by building Chinese factories to build stuff to sell to the US, how does the cost of the carbon get put back into the system? Is it as simple as China accepting a cap and trade system?

Joel's note: The carbon market is clearly a good way, probably the best way, to reduce emissions efficiently. But the real challenge is how to get everybody to agree to binding caps. Here's an idea: Countries have strong political reasons to be protectionist: protectionism benefits narrow interests and spreads the damage over everybody else, the classic recipe. And every country wants to export stuff; it's considered the magic recipe for growth. Could we somehow use these forces to get binding caps? What if the WTO allowed countries to apply tariffs to any imports from countries that didn't have caps or were out of compliance? Update: I asked this in class and the prof said it's in upcoming readings. Dammit. We're still on the rails.

Classmate: I'm not worried about the US and warming, because my impression is that the US always waits until the last minute but then does the right thing. Joel's note: so who is Obama's science advisor for climate change, and what would Obama do? If Clinton won, would she appoint Gore to do something? Would McCain? That reminds me that I asked Thomas Mann yesterday what he thought of the notion that looking at candidates' advisors tells you more about their probably policies than listening to their speeches and policy papers. He thought Clinton and Obama did not have substantially different people around them, but come to think of it I don't think he addressed the notion itself.

Alternatives

Many of the alternatives have a greater total lifecycle emission than they save, because constructing and using them uses a lot of carbon.

Some quick math during class. Coal power costs roughly 4 cents per kilowatt hour. Coal power emits about 2 pounds of CO₂, or a thousandth of a ton, per kWh. If carbon emissions currently run at €20/ton, that's an extra 2 cents per kWh, and suddenly alternative sources are quite competitive. Things glossed over in this analysis: difference between US$ and €; lifecycle carbon costs of renewables; what level of global GHG the current Kyoto/ECX price reflects, a 2°C change in 2100 or a 6° change or a 0° change?

Classmate anecdote about solar water heating in Tibet.

Climate change, free riders, and game theory

Climate change denial as a Nash equilibrium. How to change the rules of the game: reciprocity, repeated games. Altruistic leaders (and ways to get them without real altruism, e.g., Russia and Germany meeting their targets by historical accident, but they still met their targets). Play the game more frequently, i.e., negotiate new frameworks more quickly. What if there was an annual treaty signature at midnight on Dec 31, and your country was either in or out (or in some special limbo) each year?

An Economist article on the Prisoner's dilemma and climate change.

[Robert Axelrod] argues that the most successful strategy when the game is repeated has three elements: first, players should start out by co-operating; second, they should deter betrayals by punishing the transgressor in the next round; and third, they should not bear grudges but instead should start co-operating with treacherous players again after meting out the appropriate punishment.

See Thomas Heller's talk about what's wrong with the CDM trading mechanism.

Remember that a cap and trade system, while it unleashes a market mechanism (which is good), requires a serious regulatory mechanism (which is a challenge). So some people are back to preferring the tax solution instead. That may be even more technically complicated, and it may be even less politically feasible. An upstream tax is probably the most economically efficient solution but requires getting legislation that the oil companies oppose, and so is not likely.

Homework

Two page, double-spaced paper on what the business community in your country (or state) are doing about climate change.

Thomas Mann from Brookings is here at LKYSPP for a week, and a few American students were invited to lunch. He's a very nice and smart guy, and we had a nice lunch. During conversation, I asked about the perception that the US Congress has largely failed to perform what it was elected for (stop the war was a pretty clear mandate; to a lesser extent rolling back other Bush policy and power grabs was perhaps another mandate). He very energetically disputed the reality and pointed me toward his research paper and New York Times editorial taking the opposite view.

I'm reading the paper now (the executive summary isn't very helpful; try the whole paper) and stuck in a conceptual trap. The blogs I read generally take the perspective that the Democrats in Congress have hugely disappointed, a perspective that opinion polls suggest most Americans share. Mann and his co-authors argue that, compared detail by detail to historically similar Congresses like the 104th (1995), the 110th Congress has been okay. "Congressional oversight of the executive branch has increased dramatically, with real consequences for policy and administration. Assertions of the inherent powers of the presidency are now routinely challenged in both the House and Senate. Congress has toughened ethics regulations, increased the transparency of and reduced the amount spent on earmarks, and reaped a modest but significant legislative harvest."

The two opposing perspectives, even though they seem to be talking about the same thing, don't seem to line up very well. It's a bit like religion and atheism: there's no successful rational argument for the truth of religion; only a perspective of faith makes sense, and a purely rational approach excludes faith, so you have to pick only one winner, reason or faith, if you want a coherent worldview. To see that in the Congressional perspective conflict, consider this example: "Still, to the Senate's credit, Democrats secured confirmation of a controversial Bush pick for a judgeship on the southern 5th Circuit Court of Appeals." Why is that to the Senate's credit? Democrats were elected in part to block bad/partisan (and sadly, part of the Bush legacy is that partisan Republican so often means bad by more objective standards as well, c.f. the loyalty tests for US workers going to Iraq, or heckuva job Brownie (I don't even remember his real first name)) appointments. Although "controversial" "Controversial" should not be a black spot—Thurgood Marshall's appointment wasn't unanimous— but it certainly should be a warning light, especially with the utterly terrible judges Bush is prone to appointing.

When I'm talking about blogs, I'm talking about relatively mainstream, non-radical blogs, in particular Talking Points Memo. I try to steer clear of blogs that use namecalling and offer repetitive complaints about "them". Even with that caveat, compare the language:

Senate Republicans killed three major measures via filibuster threats today: habeas corpus for enemy combatants, a House member for DC, and the Webb Amendment on troop rotations. It is part of an unprecedented use of the filibuster by Senate Republicans in the 110th Congress. — TPM

and

Given the differences between the parties, the Democrats’ tenuous hold on the Senate majority, and the most wide open presidential race in nearly a century, we suspect it is no coincidence that Republicans targeted Democratic priorities with filibusters.

Some of the more useful parts of Mann's paper detail the positives:

The Democratic majority in 2007 significantly outperformed the Republican Congress that took up the gavel in 1995 in terms of both the number and the significance of new public laws. Only one item in the Republican Contract with America was signed into law at the end of 1995 while most of the Democratic New Direction Agenda proposals were enacted. Democrats aimed lower in their specific legislative promises and managed to overcome the many obstacles in their way. Their legislative harvest included a minimum wage increase, higher fuel efficiency standards for motor vehicles, a restructuring and expansion of college student assistance, implementation of the 9/11 Commission recommendations, an innovation and competitiveness package, and substantially increased funding for veterans’ health care and Gulf Coast recovery.

Still, there's big a gap between the paper's interpretations of facts, and even the facts themselves, and the blogosphere's. For example, I had the impression that a lot of 9/11 commission recommendations were gutted or ignored. I can't verify that or analyze the bill in the time alotted because a quick google only produces evaluations from before the 110th Congress. But even if all of the 9/11 recommendations were implemented, there's a strong argument that the 9/11 Commission was itself quite compromised and that its conclusions shouldn't be the baseline for progress.

So there are two competing narratives, and they each try to discredit the other, such that you need some kind of additional framework to adjudicate. Is Mann a co-opted part of the Establishment, part of the "Village of the Damned Idiots", or is the mere use of such a title to the discredit of the person using the term?

A mind-bogglingly detailed and long post about all of the electronic data flows that can happen on a street:

In an adjacent newsagent’s, the stock control system updates as a newspaper is purchased, with data about consumption emerging from the EFTPOS system used to purchase the paper, triggering transactions in the customer’s bank account records.

Data emerges from the seven simultaneous phone conversations (with one call via Skype and six cellular phones) amongst the group of people waiting at the pedestrian crossing nearest the newsagent.

...

A police car whistles by, the policewoman in the passenger seat tapping into a feed of patterns of suspicious activity around the back of the newsagent on a proprietary police system accessed via her secured BlackBerry. A kid takes a picture of the police car blurring past with his digital camera, which automatically uses a satellite to stamp the image with location data via the GPS-enabled peripheral plugged into the camera’s hot-shoe connection.

...

In the shoe-shop next door, a similar hand-held scanner, unknowingly damaged in a minor act of tomfoolery a day earlier, fails to register the barcode on a box of sneakers, resulting in a lost sale as the assistant is unable to process the transaction without said barcode. The would-be customer walks out in disgust, texting his wife in order to vent his furious frustration on someone. She sends a placating if deliberately patronising message back within a few seconds, which causes him to smile and respond with an ‘x’ two seconds after that. In doing so, his allocation of SMSs for the month tips over to the next tier in his payment plan, triggering a flag in an database somewhere in Slough.

It's a cop action/procedural story, like 24 or CSI or something. But it's set in 1974. And it's about crimes against books. And it's a graphic novel, not a TV show.

Ninety percent of the housing for Singapore's 4.5 million residents is HDB, public housing. The rest has gotten far more expensive in the last two years. The chart shows a roughly 50% increase between 2005 and 2007, but people have told me anecdotes of 100% increase. The latest government data shows an increase in rental rates in the central district of over 40% in 2007 alone. My scholarship at LKYSPP included a stipend and partial tuition waiver (later increased to full), but no housing. The LKY school occupies part of the beautiful and historic Bukit Timah campus of NUS (the National University of Singapore), a campus dating back to colonial times in the 1920s, when the design was selected through an "Empire-wide" competition. The downside to this is that there is no cheap housing for a several-kilometer radius around the school. In this context, and with a dog, I ended up roommates with another American student in an apartment less than a mile from school, Naga Court.

(As a side note, this very interesting column makes a very interesting argument. To paraphrase: the price for real estate is the measure of how much stuff those who want property will have to give to get it from those that have it. Since property owners tend to be older than buyers, the price level in the real estate market indicates the rate of wealth transfer from the young to the old. So "falling markets are bad news for the old, good news for the young." And presumably, rising markets are opposite.)

One interesting phenomenon in the Singapore real estate market is the "en bloc" sale. If 80% of the residents of a condominium agree to sell, everybody is compelled to sell. This is usually followed by the building or complex being demolished and a newer, bigger one being built. Naga Court was sold en bloc in 1999, but was still standing in 2007, despite the real estate bubble. Most of the residents had moved out, but a company specializing in these projects came in and subdivided many of the large apartments (~2000 square feet). My classmate and I signed a lease for a two-bedroom apartment roughly a thousand square feet in size. It had originally comprised the living room, kitchen, utility washroom, and a small sideroom that might have been the maid's quarters. With the addition of some paper-thin walls, the living room was split in half and the whole thing was isolated from the rest of the apartment, which was turned into three more apartments (master bedroom and its bathroom, two small bedrooms sharing a bathroom, and another room that I never got to snoop around in). The carpet was disgusting, the kitchen featured disintegrating particleboard cabinetry (complete with bugs) and no hot water, the bathroom was unfortunate; but it was spacious, dogs were allowed, and it was easy walking distance to campus. The buildings to either side lease apartments for S$10,000 a month or more, and we were paying S$2600 (US$1700 at the time). When we signed the one-year lease in July 2007, we were assured profusely that the building was not supposed to be demolished until August 2008. Perhaps you can already tell where this story is going?

We lived in blissful ignorance until I overheard some kind of building inspector having a cell phone chat in the front lobby, and the month December being mentioned. We were therefore not completely surprised when we got an one-month eviction notice on November 30, but the timing was inconvenient, given that final exams were in a week, followed by a school trip to Malaysia and then and my roommate was going to India for a month immediately after. So when the company showed us another apartment (as they were contractually obliged to do), we took it, even though it was S$600/month more. Perhaps the only compensation was that they provided the movers and moving truck.

After finals, my roommate packed her stuff and left on vacation. I packed at a leisurly pace—we don't have that much stuff between the two of us—while the exodus proceeded:

Kona was not allowed in the swimming pool, and by the time I got around to checking out the pool on the last day to see if she could finally take a swim, it was already being drained:

The new place is much nicer. Same template, a two-bedroom apartment carved out of a living room and kitchen, one small maid's bathroom with jury-rigged shower. But the building hasn't been on death row for eight years, so the decay has barely started. Tile floors, no carpet. Hot water in the kitchen, and our own washer and dryer (built in Singapore, and the washing machine often gets stuck mid-cycle and runs water through your clothes for six hours or more if not stopped). We are a few blocks from the big shopping district (Orchard Road), which is more bad than good because it "justifies" (or at least motivates—we had a signed contract and I'm sure we couldn't have unilaterally started paying S$600 less rent, so nothing will ever justify the increase to me, but when you don't have good alternatives you don't have power, and when you don't have power, you get screwed) the rent increase while at the same time we are more than twice as far from school. On balance, though, I like the new place better.

When we signed the new, shorter lease, the leasing company agents assured us that this building would not be emptied before our lease expired. At least a year, they said. Definitely no problem. Probably. How long are you staying again? Meanwhile, the property is adjacent to no less than three different construction projects:

A few weeks later there were movers in the elevators, as the owners started fleeing. One mover asked, "when are you shifting?" "Why, what do you know?" He shrugged. Here's what I saw on the next floor up: (Incidentally, a classmate who is an expat for a big MNC said his moving allowance is two containers. That's two forty-foot shipping containers. The expat package is alive and well.)

Next I asked the nice people at the desk. They had no idea when the building would be destroyed, they said, but at least a year.

A few weeks after that I saw someone in the elevator with a "Far East" shirt, Far East being the property company that owns this building along with half of the hill. No idea, he said. October, he said.

So we'll see. Personally, I figure 50/50 odds of our being displaced again before July.

S. Pacala and R. Socolow, "Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies," Science, Vol. 305, Issue 5686, pp. 968-972, August 13, 2004.

How to stabilize CO₂ in the atmosphere at 500 parts per million (well above the current 375 and almost double the pre-industrial amount) by technological means? Think of a successful program which by 2054, is reducing output by one gigaton of carbon per year; hence, between 2004 (when the article was published) and 2054, each success forestalls 25 gigatons of carbon emission. In order to keep carbon emissions at their current level through 2054 in the face of growing population etc, we need seven such successes. And all of that work will still leave us at 500 ppm CO₂, which is enough for substantial climate change.

(Note further that the article talks only about CO₂; what about the other gases? Our total GHG level is well over 300 ppm in CO₂ equivalent, if you count the methane and other good stuff.)

Thirteen candidates for success: efficient vehicles; reduced use of vehicles; efficient buildings; efficient coal plants; replace coal with gas power; capture CO₂ at power plants, at hydrogen plants, at coal-to-synfuels plants; replace coal power with nuclear power, wind power, solar power; use wind-derived hydrogen instead of gasoline in hybrid cars; use biomass instead of fossil fuel; reduce deforestation; use conservation tillage.

Each of these is massive: to get the needed 1 gigaton/year of reduction through biomass would take one sixth of total global cropland. To get that amount of reduction by replacing coal power plants with gas plants would require four times more gas plants than currently exist on Earth. To get the gigaton/year from efficient cars requires replacing two billion 30mpg cars with 60mpg cars. And remember that we need seven successes just to freeze the amount of carbon we emit, which still won't be enough to freeze the amount of GHG in the atmosphere, much less start reducing it.

So solving the global climate change problem through technological solutions is utterly possible in technical terms and apparently impossible in political terms.

Fiona Harvey and John Aglionby, “Who bears the load? Bali leaves big concessions needed on climate change,” Financial Times December 17, 2007.

What happened at the Bali climate conference? Papua New Guinea shamed the US: "We ask for your leadership, we seek your leadership ... If you can't give us what we want, please get out of the way." The US was only mostly intransigent, and did not completely block all progress. The "Bali roadmap" sets up two years of talks aimed at producing a successor to Kyoto by 2009. Various symbolic (in a good way) things happened but no hard decisions were made.

Also, a nice graph in this article shows that anyone who says that the US has no obligation to do anything until China and India also agree is an oaf. The US is responsible for almost 30% of all CO₂ emissions since 1840; Russia, China, Germany, and the UK are each responsible for between five and ten percent.

Nicholas Stern, The Stern Review on the Economics of Climate Change, Chapters 21 - 23

• p 460: developed countries should both take responsibility for huge reductions as well as make physical reductions. That is, they should be willing to pay/invest in a lot of foreign reductions as well as reducing their internal emissions.
• p 460: "The key challenge is to devise an agreement or a set of arrangements that attracts wide participation including all countries with significant sources of emissions, and achieves deep and lasting reductions in emissions from all sectors." So the key challenge in addressing global climate change is to get everybody important to agree to reduce emissions and then stick to their agreements? That's pretty basic but I guess it needs to be said.
• p 460: different countries have different short- and medium-term motivations other than saving the world, for example reducing acid rain, regional development, more jobs; these should be considered and exploited.
• p 461: ethical and selfish motivations should both be used.
• p 462: non-binding agreements aren't worthless because they still lead to pressure to act the right way; countries follow their neighbors' leads; rules at many different levels are harder to circumvent than one rule.
• p 463: transparency is a word that keeps being repeated.
• p 465: A Pew poll says 45% of Nigerians think that climate change matters a great deal. However, a Nigerian classmate's anecdotal evidence suggests this is an overestimate. Ah: it's "based on those who have heard about the "environmental problem of global warming". So most Nigerians who are sufficiently educated to know about global warming think it's serious, but how many is that? Meanwhile, in the US, 47% of those who know about it think it's only a little serious or not at all. Is it better to be more ignorant or more in denial? It's tempting to cite the None so blind ... proverb but certainly global climate change is less certain than other bits of science with heavy denier contingents: that tobacco harms people, that life evolves, etc. On the other hand, the tobacco companies are funding climate science deniers.
• p 468: "As we have established in Chapter 23..." But I'm reading "Chapter 22 Creating a global price for carbon". The PDF title of chapter 22 is Chapter 24a. Waah!
• p 468: "private sector trading schemes are now at the heart of international flows of carbon finance." That would seem to be expectable. Is it a good thing? Are carbon finance and carbon trading the key mechanisms to reduce carbon emissions? Or are they just the mechanisms to ensure that, once a certain amount of resources have been allocated to reduce carbon emissions, we get the most efficient distribution of those resources? Or is the point that the allocation of resources itself will happen piecemeal through the markets, helped along by laws and norms?
• p 469: "A broadly similar global carbon price is an urgent challenge for international collective action. A global carbon price can, in theory, be created through internationally harmonised taxation or intergovernmental emissions trading, but neither is straightforward in practice." The global price is important because carbon emissions from any location are equal, unlike some other forms of pollution, and so the most efficient system tackles the cheapest mitigations anywhere in the world. If it costs a Hungarian factory US$50 (I have no idea what order of magnitude the right number is) to reduce emission by 1 ton, and a Turkish laundry US$60, then there should be a market mechanism that ultimately allows the laundry to pay the factory. But pay the factory what? $10? $50?
• p 470: internationally harmonized tax. Avoids the baseline problem (which is, if we all agree to cut relative to, for example, 1990 levels, then the grossest polluters as of 1990 will find it much easier to cut. I don't know if this is inefficient, but it's certainly unfair).
• p 471: a global quantity constraint. Okay, if the total global budget for emissions is 7 gigatons/yr, how is that allocated? One ton per person per year? But my carbon footprint is between 5 and 11 tons. I guess I better buy some credits. What does that cost? Oil is about US$90/barrel. In a few years will we all know the price of carbon credits as well as we know the price of oil? It looks to be roughly between US$4/ton/yr and $40. Not much of a market if there's that much spread.
• p 473: trading schemes allow maximum efficiency without prejudging the issue of who pays
• p 484: "An SD-PAM would be a voluntary or mandatory commitment to implement a policy or measure that makes the development path of a country more sustainable, with the co-benefit of lowering GHG emissions"
• p 485: emissions from international flights are not currently assigned to any country. So give half to each endpoint.
• p 487: "The most important test for the international community will be to reflect the scale of action required sufficiently within their commitments." How many different ways are there to say "everybody's got to do their part"?
• p 1 (Chapter 23): "The investment that takes place [in the developing world] in the next 10-20 years could lock in very high emissions for the next half-century". There are some successes in cancelling coal plant construction in the US but lots of bad news from China. Meanwhile, someone who stands to make a lot of money if the US builds coal plants warns that the US will be in trouble if it doesn't build more coal plants.
• p 2: "1.6 billion people without access to energy ... and 2.5 billion using traditional biomass for cooking and heating" (see some examples, 1 , 2, of efforts to make more efficient stoves)
• p 3: existing barriers to better energy policy in developing countries: subsidies ($160b/year in the late 1990s), existing infrastructure, lack of funding; "low levels of capacity relative to demand means that it is difficult for operators to take plants off-line to make improvements ... Hence, old and carbon-intensive infrastructure tends to be maintained in operation even where it would be cost-effective to upgrade it."
• p 5: "China has now established a goal to reduce energy intensity by 20% between 2006 and 2010 ..." Actions like these are both economically efficient and ecologically good. But there is even lower-hanging fruit: " As part of this strategy, the Indian Ministry of Power is working to remove market distortions caused by existing subsidies for kerosene in favour of less polluting, low-carbon home cooking systems based on solar and biomass technologies." Stop making things worse is usually the first step in any policy revision.
• p 6: what does "strengthening intellectual property rights" show up in a list of "measures that governments can take to create a suitable investment climate for energy investment and the adoption of new technologies"? Some inventors are sitting around thinking, I've got a great idea for nuclear fusion but unless my country joins TRIPS and extends patents to 50 years, I think I'll just sit on it? p 7: "There is some evidence that fear of competition and concerns relating to intellectual property rights may lead companies to offer older technologies"
• p 10: case study: "CFL [compact fluorescent light] promotion policies – including changes to Ghana’s import tariffs, installation task forces and sales through employers and retail outlets – have led to a dramatic increase in adoption. ... added US$10 million to the Ghana Economy ... reduced electricity consumption by around 6%"
• p 10: "In many cases intellectual property rights are not the key barrier to transfer of technology." (Presumably poverty is a bigger barrier?) Surveys show most companies (other than drug companies and a few others) use means other than patents to protect their IP. OECD study showed that IPR is not limiting technology transfer (does this mean the existing of IPR is not limiting, or the absence of IPR?). "Some of the case studies found that there are many environmental technologies available that are not protected by patents, so IPR were not relevant to much of the volume of clean technology transfer." "IPR protection is just one issue in a complex process for technology transfer, and only a component of the cost of a technology and should not be overplayed."
• p 12: the case for public ownership of IP. (yay! But isn't it kind of roundabout to first create a private right, IP, and then make it public? Why not just skip creating that private right? Meanwhile, note the latest abuse of the US patent system: a Texas company managed to get a patent on "digitally scanning, sending and archiving checks" and survive a challenge, so now they will sue all of the banks in the US. Jeff Sessions' solution? Immunize the banks and compensate the company US$1billion (note that the article seems to suggest that the $1b cost is the effect of some pre-existing compensation rule, not directly part of Sessions' proposal). I thought we didn't negotiate with blackmailers? Maybe he's just keeping them on the line so we can get a trace.
• p 14: the CDM (Clean Development Mechanism) is the first attempt at a pollution market between rich and poor countries. Rich countries can get emission credits at home in exchange for investing in emission-reducing projects in poor countries. So far it's too small and concentrated to have much impact, but it's a start. Need to move closer to full emissions markets to really broaden the effects.
• p 18: China's 1000 Enterprises program. Looking at these details of China's plans, here and elsewhere, it seems inaccurate to say they are doing nothing. The Chinese government is as active as any other in making policy decisions re: emissions, and they seem especially smart about doing the stuff that pays for itself. Collectively all this is nowhere near enough, but neither is anybody else's work.
• p 19: long-term structures are necessary for banks and industries and governments to really take emissions into account in planning.

Architectures for Agreement: Addressing Global Climate Change in the Post-Kyoto World., Introduction

• p 11: weaknesses of Kyoto protocol: no effective limits on the top member polluters, China, Russia, India. Biggest polluter, US, not a member. If a country misses its target, the penalty is that it has to make up the different as extra reduction in the next period. Or it could just withdraw.<