Thursday, December 21, 2006

Important article

Why isn't Cheney right about the importance of a totally unfettered Executive managing foreign policy and responding to security threats? Even people who are thoughtful and sane, such as Judge Posner in some of his popular writings on these subjects, take the point about the importance of Presidential discretion in terms of energy and effectiveness.

One counter-argument is that an individual's decision quality will likely be more variable, for bad as well good, than the actions of collective institutions such as the U.S. Congress. Obviously, this point seems especially forceful after 6 years with the worst President in U.S. history, a man who knows less, thinks less, reads less, and is less emotionally mature than my 10 and 13 year old children. But of course one shouldn't over-generalize from how bad he is to the Presidency as a long-term institution, except insofar as he so vividly illustrates the variance and downside risk.

The highly regarded Harvard economist Edward Glaeser has an interesting new National Bureau of Economic Research Working Paper, "The Political Economy of Warfare" (# 12738, available on line at www.nber.org but to subscribers only) that could hardly be more timely in illustrating one of the broader problems. His analysis is not new, as he makes very clear up front, but is vital and under-appreciated.

To quote from the introduction:

"Why do countries, both democracies and dictatorships, engage in massively self-destructive wars? ....

"This paper ... presents a model of warfare where leaders benefit from conflict even though the population as a whole loses. Warfare creates domestic political advantages, both for insecure incumbents like Napoleon III and flr long-shot challengers, like Islamic extremists in the Middle East, even though it is costly to the nation as a whole. Self-destructive wars can be seen as an agency cost problem where politicians hurt the nation but increase their probability of political success. This problem becomes more severe if the population can be falsely persuaded that another country is a threat."

The paper's analysis uses a political economy model plus the following historical examples: Napoleon III, Bismarck, the European participants in World War I, and the U.S. from 1896 through 1975.

This is not a paper that will be criticized on the ground that extending the period analyzed would change the empirical conclusions.

Designing institutions without regard to agency costs is not an intellectually defensible course.

3 comments:

Anonymous said...

Probably a little lowbrow for this blog...

"Why, of course, the people don't want war," [Hermann] Goering shrugged. "Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece. Naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship."

"There is one difference," I pointed out. "In a democracy the people have some say in the matter through their elected representatives, and in the United States only Congress can declare wars."

"Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country."


Excerpted from Snopes.com.

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