A mess of pottage

by Henry Farrell on April 16, 2005

A very interesting article about the Heritage Foundation, Malaysia, and and sums of money flowing to the Foundation president’s wife in the Washington Post, which I hope to write more about tomorrow or on Monday (there are some interesting and complicated issues that I want to think about a bit more). In the meantime, I want to point out this fascinating little paragraph about the Index of Economic Freedom (previously discussed here and here).

Gerald P. O’Driscoll Jr., former editor of the annual Index of Economic Freedom, published by Heritage and the Wall Street Journal, said that in 2002 Feulner [the president of Heritage] pressed him to give Malaysia a better ranking. When the staff objected, Feulner backed off on changing the ranking, Driscoll said, but changed the text to make it more positive.

Heritage said Driscoll’s account “is incorrect. . . . If Dr. Feulner had any concerns about the Malaysia score, his name would not be on the book.”

As you prefer, you can read this as a testament to the honesty of the Index’s staff, or as damning evidence of Heritage’s intention to cook the books. Either way, it’s a rather interesting datum on the politics behind the Index (and how the text of the Index report is shaped by the political and/or financial interests of its backers).

The expected utility of voting

by John Q on April 16, 2005

In the comments thread to Chris’ post on tactical voting, Michael Otsuka very sensibly suggests

I believe there’s an extensive, sophisticated social science literature on the expected utility of voting in elections which has made some progress beyond the speculations posted above. Could anyone who’s up-to-speed post a reference to an accessible summary to save us the trouble of trying to reinvent the wheel?

This brings me to one of those papers I’ve been meaning to write for years (I wrote a several drafts of a joint paper with Geoff Brennan, but we never quite converged), and which has finally (2005!) been written by someone else. The idea was to prove an assertion I’ve made quite a few times in academic papers, and here at CT, that, as long as voters have ‘social’ rather than ‘egoistic’ preferences, the expected utility of voting is independent of the size of the electorate, and potentially large enough to justify high levels of participation. You can read this paper by Edlin, Gelman and Kaplan (PDF file). There’s an excellent appendix on why the probability of a decisive vote is of order 1/n.

There’s still the question of why people vote when one side or the other is bound to win. EGK have a go at this, and in my paper[1] on the subject, I say

This approach, in which b [the social benefit of the preferred party winning] is a simple step- function, may be replaced by a more sophisticated one in which b depends not only on the party elected, but on the size of its majority. This would be consistent with the fact that there is a substantial, though normally reduced, turnouts in elections which are perceived as foregone conclusions.)

That’s not a complete solution, and I think it’s also important to consider that voting per se is considered as a social duty or as yielding social benefits, but I think it’s at least as important as expressive motives.

fn1. Quiggin, J. (1987), Egoistic rationality and public choice: a critical review of theory and evidence’, Economic Record 63(180), 10–21.

My good opinion, once lost

by John Q on April 16, 2005

At Larvatus Prodeo, and at Catallaxy, they’re debating the question of whether you can dismiss an author based on ‘a brief skimming’, which I’ll take, along with some participants in the discussion, to mean five minutes of reading.

My answer to this question, which arises pretty regularly in blog debates is “Absolutely”. At skimming or fast reading speed, five minutes gives you 5000 words, which is more than enough to conclude that a writer is guilty of gross logical or factual errors, pretentious or illiterate prose, repetition of tired and long-refuted arguments, or simple inanity. The idea, commonly put forward in defence of various indefensible types, that you can’t criticise someone unless you have read every word they have ever written is simple nonsense. It’s true that there are people who produce the odd pearl among an output more generally fit for swine. But in such cases, it’s up to their defenders to point out the gems: the volume of words is so great, and the average quality so low, that a demand to read everything is simply impossible.

I should concede that, on one or two occasions, I’ve got into trouble through misreading someone in the first five minutes (or even less), after which pride and prejudice has done the rest. But in general, five minutes is enough to form a well-founded negative judgement.

The market can stay irrational longer than you can stay solvent

by John Q on April 16, 2005

Brad DeLong has a great post on the puzzle of low US interest rates (made more puzzling by the sharp decline over the past week or two). It seems obvious that this can’t last, but entirely unclear when it will come to an end. The reasons he and I (and more relevantly George Soros and Warren Buffett) aren’t betting on, and therefore accelerating, the end are argued pretty well, I think.

I’ll add my own contribution to the discussion over the fold. The focus is on Australia, but most of the arguments are equally applicable to the US. It’s a comparison of views of the economy based on flows of goods and services and those based on asset prices. On the former (traditional) view, the signs of impending disaster are everywhere. On the latter view, it’s sunny skies as far as the eye can see.
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