- Worldwide weeds
- The Mushroom That Explains the World
- …True Tales of Dharma, Demons, and Darwin
- From Spain to the New World via Florence and Vermont (be sure to scroll through the ‘comments’ thread)
- Time for Bolivians to Forget about the Sea (weak, but a good starting point for a discussion)
- Dissolution of the Templars
institutions
How does emigration impact institutions?
Hello everyone. As usual I’ve come to ask for feedback on my latest research. I can’t emphasize enough how much it helps to blog it out, if only because it forces me to sit down and try to summarize things in a few hundred words.
My current research is looking at the effect emigration has, if any, on institutions. Institutions come in various forms. The state is an institution, but family, religion, and even organized crime are too. Broadly speaking institutions are those rules that govern society, both formal and informal. Institutions have increasingly been acknowledged as being one of the key (if not the key) determinants of a nation’s wealth.
Despite the importance of institutions, we know relatively little about them. By no means is this due to a lack of trying, and in there have been some earnest attempts to tackle the issue. Acemoglu’s Why Nations Fail is one such attempt.* For the time being the goal in institutional studies is to properly explain how and why institutions form.
My goal is to neither explain the origin of institutions or to measure their impact on economic well being. I take it for granted that good (and bad) institutions populate the world. Instead I am interested in how different institutions interact with one another.
My former boss at Cato has looked at how immigration has influenced a destination country’s (the USA) institutions. He finds little effect. In my project I try to look at the problem from the opposite end – how does emigration influence an origin country’s institutions. To measure the impact of emigration I use remittance data.
Remittances come in two form. There are monetary remittances, which are cash transfers from emigrants to their family members and friends back home. There is a broad economic literature on the former and its affect on development outcomes. There is however little (if any- I haven’t found any at least) economic work on social remittances. Social remittances is the transfer of ideas from emigrants to their family members and friends. In general the economic remittance literature has not yet attempted to connect itself with the institution literature despite both being part of the larger development literature.
Most work on social remittances has been done by sociologists. Thus far though most of the work has been qualitative and/or focused on how social remittances tie migrant communities with their origin countries. There has been little work on how this communication translates to changes in institutions.
Political scientists are currently taking the lead on the question. Earlier this year Abel et al. published a paper looking at how remittances affect democratic transition. They find that increased monetary remittances decreases voter turn out and thus weakens the political base of populist-based autocracies. Another recent paper by Miller et al. find that emigration increase the possibility of civil war by giving opposition parties an external funding source.
I think Abel and Miller’s work the best thus far in seeing how emigration affects institutions. My biggest concern with Abel’s paper is that he looks at democratic transition events, but there is no reason why democracy must lead to better institutions. Hong Kong and Singapore alternate as the most economically free states in the world, but neither is a bastion of democracy. India is the world’s largest democracy and by most metrics has awful institutions.
Miller’s work on the other hand looks at how the probability of civil war increases, but civil war in itself is not always bad. On occasion war is necessary for the improvement of institutions**.
To remedy my concerns I look at how remittances marginally influence institutions. I use the Fraser Institute’s Economic Freedom in the World summary index as my measure of a country’s institutions. My regression tables are found below. All observations are for north American (including central America but excluding the Caribbean) countries from 1994-2012.
Column 1 is a simply regression between a country’s EFW score and remittances as a percent of GDP. Initially we find a negative correlation between the two – a 1 percentage point increase in remittances is associated with a 0.01 point decrease in its EFW score. Is this a sign that brain drain, the emigration of high skilled migrants, is reducing the institutional qualify of origin countries? Not quite – it’s simply caused by the lack of control variables. At this point remittances is a proxy for a country being undeveloped.
Columns 2-4 are me playing around with various control variables. The interaction of phone subscriptions with remittances is my attempt to proxy for social remittances. Presumably emigrants are more likely to call back home, and exchange ideas, if their family members and friends have a phone to be contacted at. The 1 year lagged EFW index symbolizes the ‘stickiness’ of institutions: in the short run institutions do not drastically change.
Column 5 is simply column 4 re-run using clustered errors and country fixed effects. Country fixed effects, for those of you who have been spared endless hours of statistical classes, is a technique that allows us to account for unobserved characteristics of a country that do not change across the observed time span. This is usually done to account for such things as culture or geography.
In this final iteration we find that a one percentage point increase in remittances increases a country’s EFW index score by 0.05 points. This is a marginal effect, but its not irrelevant. See the Cato Institute’s interactive map of economic freedom. The difference between the United States and Russia is about one point despite the former presumably being a bastion of freedom.
Thoughts?
*Why Nations Fail has been discussed on NOL several times before, see here and here.
** But let me emphasize that this is rarely the case and war should be the last option. We really do need to make our own NOL foreign policy quiz.
| (1) | (2) | (3) | (4) | (5) | |
| VARIABLES | EFW Index | EFW Index | EFW Index | EFW Index | EFW Index |
| Remittances as a percent of GDP – Fraser EFW | -0.01* | 0.04*** | 0.00 | 0.01** | 0.05*** |
| (0.01) | (0.01) | (0.00) | (0.01) | (0.01) | |
| Fixed telephone subscriptions (per 100 people) | 0.03*** | 0.01* | 0.01 | ||
| (0.00) | (0.00) | (0.01) | |||
| Remittances * Phone | -0.00 | -0.00 | -0.00** | ||
| (0.00) | (0.00) | (0.00) | |||
| EFW Index 1-year lag | 0.81*** | 0.78*** | 0.54*** | ||
| (0.04) | (0.05) | (0.05) | |||
| Income Per Capita in 000s, Constant 2005 dollars. | 0.00* | -0.00 | -0.01 | ||
| (0.00) | (0.00) | (0.05) | |||
| Constant | 7.39*** | 6.60*** | 1.33*** | 1.50*** | 3.04*** |
| (0.06) | (0.06) | (0.28) | (0.32) | (0.45) | |
| Country Fixed Effects | No | No | No | No | Yes |
| Observations | 134 | 134 | 110 | 110 | 110 |
| R-squared | 0.03 | 0.66 | 0.91 | 0.91 | 0.93 |
|
Standard errors in parentheses in columns 1-4. Robust errors in column 5. |
|||||
|
*** p<0.01, ** p<0.05, * p<0.1 |
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Myths of Sovereignty and British Isolation, 20. Concluding Remarks
This series (1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16i, 16.ii, 17, 18, 19) has explored a number of ways in which those who support a very sovereign United Kingdom completely separate from the European Union, and even other European institutions like the European Court for Human Rights, which is attached to the Council of Europe rather than the European Union, are attached to unsupportable ideas about the separateness and superiority of England, Britain or the UK.
What Britain’s past was does not prove anything about where it should be now with regard to European institutions, but it is at least possible to say that claims according to which Britain has always stood apart from Europe are false, and so is any connected claim that Britain is somehow fated by history, geography and national character to stand aside from arrangements made by European nations to share sovereignty.
Britain was connected to the rest of Europe through Celtic culture and language, then through the Roman Empire, then through the Saxon conquest, then partial Viking conquest, then Norman-French conquest, then ties with the Netherlands, then a union in the person of the joint monarch with the Netherlands, then a union in the person of a series of kings with Hanover in Germany, then through constant British intervention in European affairs, land holdings which go back to the Channel Islands (originally French), the remains of which still exist in Gibraltar and sovereign military bases in Cyprus, then through postwar European institutions like the Council of Europe (which loosely groups all democracies, broadly defined) and then the European Union.
The peoples of the United Kingdom of Great Britain are rather less firmly committed to maintaining the existing state than the peoples of France and Germany are, the two European nations usually taken by British Eurosceptics as the negative opposite of Britain in all its glory. There is a distinct possibility that Scotland will leave, with strong separatist tendencies in Northern Ireland and to a lesser but real extent in Wales. So Britain is not uniquely well formed and self-confident as a nation.
As with all other nations, Britain was built through war, state appropriation and the enforcement of a national state system. It is not a country of unique liberty, neither does the Anglosphere of UK, USA, Canada, Australia and New Zealand exist as a uniquely coherent transnational grouping based on medieval and early modern English institutions. The Anglosphere countries are diverse, with different historical experiences, with Britain as the odd one out in the sense that all the other Anglosphere countries are still dealing with the status of indigenous peoples who lived there before the relatively recent history of the Anglosphere states.
Other European states have links with ex-colonies, where the language of the colonial power is still widely spoken. More French people live in Britain than those from the Anglosphere (300 000 versus 191 000). Links with the Anglosphere are certainly quite real and exist quite happily alongside EU membership, so the whole idea of making the Anglosphere something that excludes a European path is misleading in any case.
The historical interpretations referred to in this and previous posts are not contentious. No educated and fastidious sovereigntist-Eurosceptic is going to deny them, the trouble is that a lot of less fastidious sovereigntist-Eurosceptic assumptions about history are not in happy accord with these historical realities, and even the more fastidious are trying to emphasise an unrealistic counter-narrative of British distinctness that goes beyond the normal level of distinctness between major nations. Britain has certainly made its contribution to the history of liberty, civil and commercial society, but is not obviously more blessed in these respects than the other most advanced European nations.
The case against the United Kingdom’s participation in the European Union can only be the case against the existence of a transnational political union for any large grouping of European nations. There are problems with the EU and I can agree with many sovereigntist-Eurosceptics on many of these problems, but if we reject the more myth making kinds of nationalism these are problems I suggest that can be addressed with better, more decentralised and flexible institutional arrangements. India, which has a greater population than the EU, and at least as much diversity of language and other aspects of human life survives.
It is of course difficult to know what Europe would look like without the EU and what good things in Europe are due to the EU, but I suggest that it is not a complete coincidence that the period of the EU has been a time of growing democracy and peace, with many countries taking EU membership as part of the path from dictatorship to democracy. The Euro crisis and the more recent Mediterranean refugee crisis are bringing strain to the EU, but that is what happens to political communities, they encounter problems and survive them if they have robust institutions. The economic problems of southern Europe precede the EU and tensions round migration exist in other parts of the world. Britain has anyway remained aside from the Euro, as have Sweden and Denmark, suggesting that the EU can accommodate flexibility and allow member states with doubts about the most ambitious schemes to stand aside from them. This is certainly the path to go down if the EU is to be a robust political community.
The basic point in this series has been that nothing makes British history separate from European history, so that questions about membership of a European political community which pools sovereignty are not answered by looking to a supposed distinct and superior history. Britain is part of Europe and always has been and has frequently shared sovereignty in some way with some mainland European state. Past history does not exclude Britain from Europe and trans-national European institutions, which may or may not be appropriate for Britain and other countries, for reasons in the here and now. As far as history determines Britain’s place, the appropriate place is Europe.
Fiscal Watch Dog, The Dutch Way
I still have not found a way to make a living out of international political theory that also satisfies my demands as consumer at numerous markets, not least the housing market. At this moment this means I make a living at the Dutch fiscal watchdog. I recently wrote a piece about in Contemporary Social Science, which can be seen here.
Below is the abstract, drop me a mail if you’re interested in the full text.
CPB Netherlands Bureau for Economic Policy Analysis: Dutch (economic) policy-making
As one of the oldest independent fiscal institutions in the world, the CPB Netherlands Bureau for Economic Policy Analysis (CPB) has a long history of providing evidence for policy-making. Uniquely, its activities include the analysis of election manifestos, the national budget and the coalition agreement, as a derivative from its provision of leading macroeconomic forecasts. This paper analyses the CPB’s role within the Dutch political system, its place in public administration and the different methods it employs to provide evidence for policy-makers. It then focuses on two different types of activities, the costing of election manifestos and ageing studies, using a multi-methods approach to illustrate how the CPB’s influence extends to setting policy agendas and policy targets, and to reveal critical factors for success and failure. Although the CPB model cannot easily be transposed to other countries, a number of general principles can be deduced from it for application elsewhere.
Around the Web
- Contrary to popular myth, Democrats are just as ideological as Republicans, and Republicans are just as group-centric Democrats
- The Rule of Karlowitz: Fiscal Change and Institutional Persistence (pdf)
- The Privilege of Checking White Privilege
- The Wealth of Subnations: Geography, Institutions, and Within-Country Development (pdf) (h/t Adrián)
- Shakespeare in Tehran “I also noticed among the men a few who stood apart and did not seem to be either students or faculty. It was not difficult to imagine who these might be.”
- The new economic history of Africa (pdf)
From the Comments: What *are* the institutions that promote rational ignorance?
Rick answers my question:
Let’s go a step further than institutions: Instincts.*
Our ancestors survived a dangerous natural environment by taking on genetic strategies that allow us to use our big-old-dolphin-brains in clever ways, but that falls short of perfect Spock-ness. We are easily excited by certain things and will often answer easier questions than the ones posed to us without realizing it.
So besides the fact that it’s genuinely rational to be ignorant, our psychological makeup creates a situation that exacerbates the problem. Voters ask the question “will I be better off in four years with that asshole in charge or this one?” but answer the question “which of these schmucks would drive me to suicide slowest if I were trapped on a desert island with one of them?”
Let’s get back to the institutional question… Rational ignorance is a thing because we are facing a collective action problem. Through repeated play the problem of rational ignorance has created an electoral institution that rewards showmanship (playing on the psychology of voters). There are two questions: 1) Why did things unfold so that this is the case? 2) How might we change them for the better?
I suspect the answer to 1) is that people genuinely thought voting was going to be about information. Perhaps it even was at some point. And if it was successful it’s only natural that its scope would be expanded. But as its scope expands the informational issues become larger and it becomes more rational to be ignorant. (That’s one possible story but not the only one.)
The status quo isn’t going to change without a major shift in the way people think. One way to get that shift would be to fix high school civics classes (Okay, where do I sign up for sea-steading?!). I think one of the higher marginal benefit things is satire (tangent: my introduction to satire was This Hour has 22 Minutes which I watched before I was a full-blown libertarian). One reason I like Jon Stewart so much is that he fights back against the non-role of information in the political-media nexus. If “the people” acknowledge that politics isn’t about making “the right choice” in some objective sense they will be admitting the problem.
*Now, if I remember my last anthropology class correctly instincts aren’t as real as we think they are… but what from what I’ve gleaned about evolutionary psychology and neurology there is hard-wiring, or something like it, that kinda-sorta stands between instinct and culture. So I’ll (perhaps incorrectly) use the word instinct as short-hand for psychological features of humans that arose from our evolution as a social animal.
Rational ignorance and institutions
I’m grading a question I gave to my class on rational ignorance so I’ve been restating myself repeatedly… and in doing so refining my view on rational ignorance.
Here’s the basic story: an election is forthcoming and we need to decide how we will vote. One possibility is that we follow heuristics (such as “I’m going to vote for the Democrats”). Another is that we delve through all the available information and make a calculated decision based on what we expect will be the outcomes of each candidate’s proposed policies (or what we think their policies actually will be). In a perfect world the median voter would be making a decision on the second basis. But each voter faces an opportunity cost of being more informed. And because a tie is highly unlikely I can cast a ballot I might otherwise regret but I won’t have to worry that it will actually change the outcome of the election.
The outcome is that people vote stupidly. But if that were really the problem it wouldn’t be that big a deal. Yes, people are wasting their votes. But really, we’re not facing a situation where “the truth” is on the ballot. The real problem is that the terms of political competition aren’t what we want them to be. This is still a Prisoners’ Dilemma, but the outcome isn’t “we all accidentally vote for the jackass.” The outcome is “the competition is inescapably between jackasses.”
In a world where rational ignorance were a problem because of the ignorance part political races would still be about a reasoned debate about how to improve the world. But that isn’t what politics is (and it probably never was). Instead it’s about marketing. It’s about grabbing the scarce attention of voters that has little if anything to do with information or anything you can be ignorant about.
In other words, rational ignorance is not an epistemic problem, it’s an institutional problem. It does not simply change the intelligence of the outcome of a vote, it reduces the role of intelligence and rationality in elections. It changes the rules of the game so that a politician’s efforts towards being “right” have little bearing on their success. What really matters is garnering the irrational support of voters.
Part Two of Capitalism for the Intelligent Ignorant: the Actors
This is a little complicated. Part One of this series listed the main constraints on pure capitalism. Then, I took a detour – which was NOT Part Two – on the subject of money which is a quite specialized topic. Below is Part Two of Capitalism for the Intelligent and Ignorant. It describes the main actors of capitalism, of real capitalism, of capitalism such as it exists. with an emphasis on the American instance.
As have stated forcefully in Part One the government is a the biggest economic actor in all developed countries. Although it’s nowhere constitutionally required, at any one time, the government has most or almost most of the money in its hands. This fact alone requires it to do some investing. It’s also the biggest buyer of many things because of the sheer size of government agencies, including the armed forces. It’s also a major seller of…
View original post 2,932 more words
Around the Web
- An excellent piece by Matt Steinglass in the Economist on John Kerry’s failure in regards to the Israeli-Palestinian peace talks.
- I know Dr Shikida linked to this earlier, but I think it’s worth highlighting again. A university professor at a law school in Brazil was recently assaulted by students for his political views, and Dr Shikida points out that today’s professor-assaulters are tomorrow’s journalist-killers. Disturbing, and in Portuguese.
- In response to Dr van de Haar’s explosive and much-welcomed introductory post on the myth of the Commercial Peace, here is a good introductory pdf by MIT’s PR Goldstone on the strengths and weaknesses of the theory.
- E Wayne Merry: Why is Moscow now pursuing an economic Eurasian Union? In brief, the Russian derzhava is turning inward on itself, in part for domestic reasons but more broadly because of its inability to compete (on different indices) with the European West, the Chinese East, or the Islamic South.
- John Allen Gay: Kirchick: “The Putin regime can tell Ukrainians, ‘you wanna protect Orthodox Christianity, you stay with Moscow.’ And he’s using this all throughout the former Soviet space. So this is a geostrategic issue for him.” Would Western pressure for gay rights in Russia improve their lot, or just turn domestic gays into traitors? I’m pretty sure I know the answer to this one…
- How many people does it take to colonize another star system?
Institutions and the GDP
Just playing around with the MIT’s Pantheon and the Development Economics (click on it to enlarge the plot).
Well, I know correlation is not the end of the (hi)story. Maybe it’s just the starting point. The “lpib2000” is the log of the GDP in 2000 (used in several papers, I know) and the “panteon_rank” is just as it says.
So, if you think this is interesting, well, you saw it first here. ^_ ^
People: neither blithering idiots nor towering geniuses
Or is it that they’re both?
As a young libertarian first exposed to economics (actually it was my third exposure where it took) I was struck with an exciting proposition: people don’t need the government to look after them because (we’ve assumed that) they’re rational! In that case, government can almost only ever do harm. Add in some public choice and Austrian insights and you’ve got a water tight defense of liberty.
But actually you don’t. Because as it turns out, people might actually be complete morons. I’ll bet if you marketed a brand of bottled water as having never been warm–cleaned with pre-chilled filters made in iceland, and never poured into room temperature bottles–it would sell. But if that’s the case, the world should be a scary place. People would be doing ridiculous things and electing ridiculous politicians to help them act even more absurdly.
I’m an economist and I still do plenty of irrational things. But it turns out that first taste of economics was econ of a particular variety: the study of what is rational. Not the study of how people rationally act. That’s not to say it’s worthless. David Friedman put it well in Hidden Order: if people are rational some times and act randomly other times, then we can still make useful predictions about their behavior. But I don’t think that economics is some sort of half-science that assumes away randomness in order to study some portion of people’s actions.
Mostly, I think the study of rationality lays a foundation, and offers a puzzle, to allow further study of ecological rationality. The world is orderly and roughly follows the predictions we make when we assume individuals are rational. And yet people seem far from rational. What gives?!
It turns out we have to pay attention to institutions. These often hidden rules of the game direct our actions and embed our learning in social rules. Those crazy (probably imaginary) sociologists might have been on to something when they said that individuals’ actions are shaped by social forces. It’s not that people don’t have autonomy, it’s that people don’t exist in a vacuum.
Yes they are.
What’s my point? Learning a little bit of economics goes a long way to making good arguments for liberty, but it doesn’t go far enough. We live in an a much more interesting world than the one we learn about in econ 101.
What’s Up with New Zealand?
Economist Scott Sumner’s 2010 piece on the unacknowledged success of neoliberalism (which I linked to yesterday and you should definitely read or reread) poses an interesting question:
There are two obvious outliers [to aggressive neoliberal reforms]. Norway, the highest-income country, is much richer than other countries with similar levels of economic freedom, and New Zealand, at 80 on the economic freedom scale and only $27,260 in per capita income (US PPP dollars), is somewhat poorer than expected […] Perhaps New Zealand’s disappointing performance is due to its remote location and its comparative advantage in agriculture holding it back in an increasingly globalized economy in which many governments subsidize farming.
Rather than challenge Sumner’s thoughts as to why New Zealand is much poorer (I think his guess explains a lot), I think I can add to it: The Maori.
The Maori are the indigenous inhabitants of New Zealand, and can be compared – socially – to the Native Americans of the New World or the aborigines of Australia. Unfortunately I know next to nothing about the Maori (or other South Pacific cultures), but I do know how to draw rough inferences about things by using data!
The Maori comprise about 15% of New Zealand’s population, whereas in other states settled by Anglo colonies the population of the natives relative to the overall population of the country is minute (aborigines in Australia comprise 3% of the population, for example, and in Canada and the US the indigenous make up about 2%).
The relatively large percentage of indigenous citizens in New Zealand can better explain why New Zealand is an outlier among rich countries, but I also think it’s important to ask why the Maori (and other indigenous populations in Anglo-settled colonies) have failed to match the demographic trends of their European and Asian counterparts.
Institutions are, to me, the obvious answer, but I’m curious as to what the rest of you think. I’d also like to add that I don’t think enough of us think about the issue of land (as in ‘land, labor and capital’ when we discuss the huge demographic gaps found between – for lack of better terms – settlers and natives in Anglo-American countries).
Pesos, medidas e as instituições
Douglas Allen, em seu ótimo, The Institutional Revolution, defende a tese de que uma revolução institucional teria precedido a famosa revolução industrial. Texto importante, é que, para mim, já é candidato a livro-texto básico de qualquer bom curso de História Econômica.
Como sempre, senti falta de alguma coisa mais, digamos, tropical, no livro. Bom, mas como é que vou cobrar isto de um livro que não se propõe a contar a história das instituições em Portugal? Não posso. Isto é mais uma deixa para os pesquisadores brasileiros. Dica de amigo, quem sabe, para alguém que deseje fazer uma dissertação de mestrado sobre o tema.
Mas eu sou uma pessoa perigosamente curiosa. Fiquei intrigado com a questão dos pesos e medidas. No argumento do autor, a questão dos pesos e medidas, ou melhor, a questão da padronização de pesos e medidas, está diretamente relacionada com a mensuração de produtos, o que gera uma importante alteração nos custos de se trocar mercadorias (ou seja, nos custos de transação). Afinal, nada mais óbvio do que achar mais interessante comprar um quilo de abacate sem levar para casa meio quilo do mesmo.
No caso do Brasil colonial, então, pensei, deveria ser como em Portugal. Para checar isto, consultei este documento. Vejamos alguns trechos:
No que se refere às unidades de medidas adotadas ao longo do período colonial, o quadro não difere, como é natural, daquele oferecido por Portugal. A vara, a canada e o almude constituíam as medidas de uso mais comum, ainda que seu valor pudesse variar de região para região. Os produtos importados traziam consigo suas próprias medidas e, quanto mais geograficamente restrita uma atividade econômica, mais específico era o sistema de medidas utilizado. (…)
Vale dizer: nada muito diferente do restante da Europa.
Assim, a primeira menção expressa à atividade metrológica, em documentos coloniais, refere-se precisamente à fiscalização do funcionamento de mercados locais. Como em Portugal, o funcionário colonial mais diretamente envolvido com a fiscalização de pesos e medidas era o almotacé, mencionado pelas Ordenações Manuelinas e Filipinas e previsto pela organização do município de São Vicente, em 1532. Em número de dois, eleitos mensalmente pela Câmara Municipal, os almotacés tinham como atribuição básica manter o bom funcionamento dos mercados e do abastecimento de gêneros, além de fiscalizar obras e manter a limpeza da cidade. Como parte de suas responsabilidades, deveriam verificar mensalmente, com o escrivão da almotaçaria, os pesos e as medidas. Tal disposição estimulava, dada a dispersão e a diversidade dos municípios, a multiplicação dos padrões de medidas.
Veja só a importância do ofício. Alguém imaginaria que carregar uma régua ou uma fita métrica, hoje em dia, seria uma profissão digna de tanta importância? Bem, numa época em que o governo descobre que medir ajuda a maximizar sua receita, nada mais natural, não? Até eleição para o cargo havia.
No caso dos gêneros estancados ou submetidos a controles mais rígidos, a Coroa cuidava da melhor organização das atividades metrológicas. O estabelecimento do monopólio do tabaco, por exemplo, levou à criação, em 1702, do Juiz da Balança do Tabaco, nas alfândegas de Salvador e Recife. No caso das minas, o regimento do Intendente do Ouro, de 26 de setembro de 1735, mencionava expressamente sua obrigação de manter as balanças e marcos da Intendência aferidos, pesando o ouro corretamente, sem prejuízo das partes nem da Fazenda Real, atribuição expressamente mantida no regimento de 1751.
Como se percebe, a questão institucional é indissociável da questão econômica. Veja aí o depoimento do próprio autor: tem monopólio? Quem é o “dono” do monopólio? A Coroa. Reza o dito popular – e a teoria econômica – que “o olho do dono engorda o cavalo” – e não é diferente neste caso.
Pois bem, falta-nos – alô, colegas de História Econômica! – um estudo mais detalhado do papel dos almotacés (ou me falta mais pesquisa e leitura, vai saber…), não falta? Vou procurar meu exemplar de Fiscais e Meirinhos para rejuvenescer, digamos assim, meu interesse pelo tema.
Novamente, percebemos que a História Econômica não precisa nos dar sono.
Why is India so poor? A macro approach
India’s total area, in square kilometers, is 1,222,559 3,166,414.
The total area of France, Germany, the UK, Ireland, the Netherlands, Belgium, Luxembourg, Denmark, Sweden, Iceland, Norway, Finland, Switzerland, Austria, Italy, the Czech Republic and Slovakia (or “the West”), in square kilometers, is 1,223,543 3,106,585.
Think of this comparison in terms of regions: one region is India, the other is the West. Both regions are densely populated. Both regions have a number of languages and an even greater number of regional dialects. Yet one region is wealthy, and the other is poor.
One way to look at this phenomenon would be to glance at the macro institutional structures in place in these two regions. India is one country. The West is composed of 6 17 countries. That’s six seventeen centers of power, as opposed to one, within territorial spaces that are roughly equivalent in size.
If we think about these macro institutions and incorporate them into other institutional arguments that focus on the micro institutions, then India actually has a lot of hope. The West saw numerous wars before it finally came to the arrangements it now has (six seventeen independent centers of power and a free trade zone binding them together), so India has a great blueprint for improving its macro institutions.
On the downside, of course, is the fact that many factions won’t really care if India becomes freer and more prosperous, so long as they get theirs. Along with the standard public choice explanation, the path dependency argument also suggests that India has a tough road ahead.
Sometimes being a libertarian sucks.
Update: Dr Gibson was kind enough to point out that I had initially calculated India’s size in square miles rather than square kilometers. I have taken that into account and updated it accordingly. Conceptually, my argument actually grows in strength with the corrected size.
Looking into the Crystal Ball
Since the rise of the first civilization, a centralized organization having access to the levers of influence on certain types of infrastructure has been a given. Specifically these are information, commercial transactions (especially the flow of goods), and human movement. The institutions of government and society have been structured to reflect this circumstance. As I will demonstrate below, this paradigm will shift dramatically. Of course, new institutions will be needed to adapt to this reality, which is where my interests lie as should those of other liberty lovers concerned with the future.
The introduction of the internet is beginning of the direct unraveling of the first lever, and indirectly of the second. With the advent of global real time communication, boundless storage capacity and near universal access, centralized control of information is coming to a close. The internet is decentralized compared to other infrastructure. So the only way a centralized organization, for example, the state, can control information is by a complete shutdown of the internet, i.e., the internet kill switch used in Syria during civil unrest recently and championed by many government officials around the world. The way this works is if there is a centralized structure, which in this case is your local Internet Service Provider (ISP), through whose lines people access the internet. However, advancements are being made to create a fully decentralized internet, void of middle men ISPs, functioning like a peer to peer network. Silk Road, an invitation only “internet” on which many things are traded, is a prototype of a fully decentralized network.
The internet has also a great deal of influence on the second lever. It has unleashed three dimensional printing, or the ability to create or scan and recreate practically any non-biological or electronic object. From wrenches to shoes soles to burritos to guns and even a house, they have all been constructed without any physical human labor. It is only a matter of time till this becomes widespread and supersedes the need for most objects to be centrally created, hindering any potential efforts to limit production and distribution of such products. Once this happens, economies of scale will struggle to remain relevant as customization, ubiquity, and efficiencies in material usage achieved by 3D printing will supersede any value created by mass manufacturing.
If the first two sound tantalizing, the end of final lever of influence will be even more consequential than the first two combined. That is the advancement in what I like to call three dimensional travel. Vehicles that are ubiquitous such as cars and ships are limited to what is known as two-dimensional travel, meaning they can only go forwards/backwards and left/right. The rise of private rocket company SpaceX , successfully accomplishing what only the government agencies of the U.S.A. China and Russia have been able to accomplish in space, shows private space exploration is catching up to the established players. It’s not the only rocket company with massive firepower behind it. But getting back to Earth, nine different companies vying are for governmental approval to launch flying cars. Both are examples of three dimensional movement which aim to be available to the masses. Once successful, no one will have an inescapable dominance nor be able to realistically limit the movement of people as they will be able to escape barriers otherwise impossible in the prevalent “two dimension” travel.
As the control of these levers is decentralized, it will become imperative to understand the transformation of institutions and concepts such as economies of scale being overturned and anticipating the challenges that such innovations will bring. This however will not be enough. A focus on developing alternative institutions and solutions to mitigate those hazards must also be taken into account.
And that is where I believe libertarians need to focus. On the institutuions of the future. If we are to secure liberty for our prosterity and its future, we must study and build the institutions that will anticipate and seek to amelorite that challenges of the future well before and better than the state. Then and only then will we see the permananet demise of the state as a temprary blot on human history and a relic of agricultural society.
Notes On Liberty 