Why New Zealanders support MMP
28 Jul 2014 Leave a comment
in constitutional political economy, politics - New Zealand, Public Choice Tags: MMP
Most people seem to give the same reason to me in conversations as to why they support the MMP voting system – Mixed Member Proportional representation.
The reason is profoundly democratic: their party vote always counts no matter where they live in the country or how safe or how marginal the local electorate might be.
Under first past the post, it didn’t matter who you voted for if you lived in a safe electorate because the local MP of whatever political party would always be elected.
What is underplayed in these conversations is how close all elections are in New Zealand, and how likely it is that your vote might be decisive rather than just one of millions.
Under MMP, the last seat in Parliament is a contest between several parties. If anyone just gets a couple of dozen more votes, they get another seat.
In the current parliament of 121, the National Party Government has 59 seats, with the ACT party one seat and the United Future Party one seat.
One more seat for ACT or one less seat for the National Party would have made a big difference to the election outcome. ACT was only 45 votes short of getting that second seat in the 2011 General Election.
Note: Under MMP, the New Zealand House of Representatives is a mix of MPs from single-member electorates
and those elected from a party list, and a Parliament in which a party’s share of the seats roughly mirrors its share of the overall nationwide party vote. There is a minimum party vote threshold to get into Parliament. The party votes of those parties with less than 5% of the party vote do not count unless they win a constituency seat.
The business community as an enemy of capitalism
26 Jul 2014 Leave a comment
in applied price theory, Milton Friedman, rentseeking Tags: competition and monopoly, corporate capitalism, Milton Friedman, rent seeking
The best discussions on green interest group coalitions
26 Jul 2014 Leave a comment
in economics of regulation, environmental economics, global warming, Public Choice, rentseeking Tags: bootleggers and baptists, Bruce Yandle, environmental interest groups, global warming, green rent seeking, Todd Zywicki
Bootleggers, Baptists, and the Global Warming Battle By Bruce Yandle and Stuart Buck:
The theory’s name is meant to evoke 19th century laws banning alcohol sales.
- Baptists supported Sunday closing laws for moral and religious reasons, while bootleggers were eager to stifle their legal competition.
- Politicians were able to pose as acting in the interests of public morality, even while taking contributions from bootleggers.
Yandle and Buck argue that during the battle over the Kyoto Protocol, he “Baptist” environmental groups provided moral support while “bootlegger” corporations and nations worked in the background to seek economic advantages over their rivals.
BAPTISTS? THE POLITICAL ECONOMY OF POLITICAL ENVIRONMENTAL INTEREST GROUPS By Todd J. Zywicki who specifies three testable implications of a public interest model of the activities of environmental interest groups:
(1) a desire to base policy on the best-available science;
(2) a willingness to engage in deliberation and compromise to balance environmental protection against other compelling social and economic interests; and,
(3) a willingness to consider alternative regulatory strategies that can deliver environmental protection at lower-cost than traditional command-and-control regulation.
Zywicki concludes that It has been argued that environmental regulation can be best understood as the product of an unlikely alliance of “Baptists and Bootleggers” – public-interested environmental activist groups and private-interested firms and industries seeking to use regulation for competitive advantage.
The Far Left view of the welfare state
25 Jul 2014 Leave a comment
in income redistribution, rentseeking Tags: bottom 99%, socialism, top 1%, welfare state
HT: Dan Mitchell
What do political parties do?
24 Jul 2014 Leave a comment
in constitutional political economy, Public Choice Tags: political parties
The purpose of political parties is to popularise ideas and then present a slate of pre-screened candidates committed to delivering on these ideas, to controlling each other to ensure they stay staunch, and have a defined and published world-view or ideology on what they will do when various contingencies arise. A market for assurances arises through political brand-name capital.
A conviction politician is one who has invested is so much brand-name capital that they know they are finished if they change their views. People vote for them because they know what they will get. When the brand is betrayed, voters punish this unfaithfulness severely – execute one, educate a thousand.
Schumpeter disputed that democracy was a process by which the electorate identified the common good, and that politicians carried this out:
• The people’s ignorance and superficiality meant that they were manipulated by politicians who set the agenda.
• Democracy is the mechanism for competition between leaders.
• Although periodic votes legitimise governments and keep them accountable, the policy program is very much seen as their own and not that of the people, and the participatory role for individuals is usually severely limited.
Modern democracy is government subject to electoral checks. Citizens do have sufficient knowledge and sophistication to vote out leaders who are performing poorly or contrary to their wishes.
The power of the electorate to turn elected officials out of office at the next election gives elected officials an incentive to adopt policies that do not outrage public opinion and administer the policies with some minimum honesty and competence.
Political parties, by investing in brand names and ideologies governments have betrayed their promises make it easier to vote out governments have betrayed their promises
In a democracy we resolve our differences by trying to persuade each other and elections
17 Jul 2014 Leave a comment
The Devil’s Dictionary – definition of a revolution
17 Jul 2014 Leave a comment
in Public Choice Tags: Devil's dictionary, revolutions
In politics, an abrupt change in the form of misgovernment.
Specifically, in American history, the substitution of the rule of an Administration for that of a Ministry, whereby the welfare and happiness of the people were advanced a full half-inch.
Revolutions are usually accompanied by a considerable effusion of blood, but are accounted worth it — this appraisement being made by beneficiaries whose blood had not the mischance to be shed.
The French revolution is of incalculable value to the Socialist of to-day; when he pulls the string actuating its bones its gestures are inexpressibly terrifying to gory tyrants suspected of fomenting law and order.
Thatcher’s brilliant critique of socialism and how it is happy for the poor to be poor
16 Jul 2014 Leave a comment
in comparative institutional analysis, income redistribution, liberalism, politics Tags: Margaret Thatcher, socialism
Household Incomes in NZ: trends in indicators of inequality and hardship 1982-2013
14 Jul 2014 Leave a comment
in income redistribution, politics - New Zealand Tags: The Great Enrichment
Real household income trends, 1982 to 2013 ($2013) before housing costs (BHC) and after housing costs (AHC)
Gini coefficient 1980 – 2015
The tax and transfer system significantly reduces the inequality
the increases were 55% for Pakeha, 57% for Pasifika, and 64% for Māori since 1994.
Female voting demographics and the growth of government
13 Jul 2014 1 Comment
in applied price theory, gender, income redistribution, Public Choice Tags: John Lott, The growth in government, voter demographics
The gender gap in voting dates back 2 generations or more and may now be in double digits.
A large share of all social spending is for the care of dependents – everything from children to non-working mothers and old age pensioners. Women support this spending because they benefit more from the social insurance it offers. Women both earn less and are more likely to be out of the workforce caring for children. Women also change their voting patterns more often than men as they marry and divorce or as they become single mothers.
John Lott pondered on why the government started growing precisely when it did. The federal government, aside from periods of wartime, consumed 2 to 3% of GDP up until World War I. In the 1920s, non-military federal spending began steadily climbing. FDR’s New Deal continued an earlier trend.
Lott explains the growth of government with women’s suffrage. For decades, polls have shown that women as a group vote differently than men. Without the women’s vote, Republicans would have swept every U.S. presidential race but one between 1968 and 2004.
A major gender gap issue is smaller government and lower taxes, which is a much higher priority for men. Women were more opposed to the 1996 federal welfare reforms, which mandated time limits for receiving welfare and imposed work requirements on welfare recipients.
Women are also supporters of Medicare, Social Security and educational expenditures more than men. Studies show that women are generally more risk-averse than men so they support government programs to ensure against certain risks in life.
- Women’s average incomes are also slightly lower and less likely to vary so single women prefer more progressive income taxes.
- Once women marry, they bear a greater share of taxes through their husbands’ relatively higher incomes so their support for high taxes declines.
Marriage also provides an economic explanation for why men and women prefer different policies.
Single women who believe they may marry as well as married women who most fear divorce, look for protection against possible divorce: a more progressive tax system and other government transfers of wealth from rich to poor.
Lott considers that A good way to analyse the direct effect of women’s suffrage on the growth of government is to study how each of the 48 state governments expanded after women obtained the right to vote.
- Women’s suffrage was first granted in western states seeking women migrants: Wyoming (1869), Utah (1870), Colorado (1893) and Idaho (1896).
- Women could vote in 29 states before women’s suffrage was achieved nationwide in 1920 with the adoption of the 19th Amendment to the Constitution.
The impact of granting of women’s suffrage was startling: state governments started expanding the first year after women voted and continued growing until real per capita spending more than doubled. The increase in government spending and revenue started immediately after women started voting.
There were 19 states that had not passed women’s suffrage before the approval of the 19th Amendment, nine approved the amendment, while the other 12 had suffrage imposed on them.
If some unknown third factor caused a desire for larger government and women’s suffrage, government should have only grown in states that voluntarily adopted suffrage. After approving women’s suffrage, government grew at a similar pace in both groups of states.
As more women voted and eventually voted in similar numbers as men, the size of state and federal governments expanded as women became an increasingly important part of the electorate. It took up to 30 years for women’s voting participation rate to equal that of men.
Lott also found that women’s political views on average vary more than those of men:
- Young single women are about 50 per cent more likely to vote Democratic.
- For married women, this gap is only one-third as large.
- Married women with children become more conservative still.
- Women with children who are divorced are suddenly about 75 per cent more likely to vote for Democrats than single men.
Not surprisingly, political parties pitch their platforms to women because they are more likely to change their vote over identifiable issues that are within the scope for government to change or influence
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