tag:blogger.com,1999:blog-3829599.post115532950850987904..comments2024-01-28T00:20:40.933-08:00Comments on Agoraphilia: The Expected Value of Governmental QualityUnknownnoreply@blogger.comBlogger6125tag:blogger.com,1999:blog-3829599.post-1155755691679117642006-08-16T12:14:00.000-07:002006-08-16T12:14:00.000-07:00I found Tyler's post baffling. He didn't explain h...I found Tyler's post baffling. He didn't explain how your post committed the "libertarian vice." The fact that even the best-case scenario of policy X is likely to be worse than not pursuing X doesn't in any way deny that policy X can be carried out in better and worse ways.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1155418064488858582006-08-12T14:27:00.000-07:002006-08-12T14:27:00.000-07:00Vorn -- Yes, it's certainly possible to shift the ...Vorn -- Yes, it's certainly possible to shift the curves one way or the other. I didn't say so specifically, but that was the point of Alex's post that I linked. Also, notice that most of the institutional devices for shifting the curve work by <EM>restricting</EM> the power or scope of government: federalism, separation of powers, enumeration of powers, bills of rights, and so on. <BR/><BR/>Thus, you can't make a simple leap from "we can improve the average quality of government" to "we can therefore trust government to do more things." Why not? Because we improve government quality in large part by constraining the government to do less.<BR/><BR/>And yes, the private sector has problems, too. Hence the existence of a left tail on the market curve. But at least market actors have a bottom-line incentive to solve their problems that government actors typically lack. The principal-agent problem that afflicts national government is far worse than the principal-agent problem that afflicts corporate governance. That is one among many reasons I think the center of the market curve lies to the right of the center of the government curve.<BR/><BR/>You are correct, of course, that a more sophisticated model would say the curves differ issue-by-issue. That's why many (most?) libertarians, myself included, admit a limited role for government in some areas.Glen Whitmanhttps://www.blogger.com/profile/01425907466575991113noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1155414639656463722006-08-12T13:30:00.000-07:002006-08-12T13:30:00.000-07:00Vorn said, "Why can't we improve incentives for go...Vorn said, "Why can't we improve incentives for government actors, just as corporations will improve incentives for their employees?"<BR/><BR/>Maybe I'm not as economically literate as I should be, but isn't this the same as asking for the government to adopt market principles?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1155398338110090932006-08-12T08:58:00.000-07:002006-08-12T08:58:00.000-07:00You could also import from Mathematica.You could also import from Mathematica.Jeff Brownhttps://www.blogger.com/profile/00708682858926029668noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1155337955911905482006-08-11T16:12:00.000-07:002006-08-11T16:12:00.000-07:00First, let me compliment you on your graph. I thin...First, let me compliment you on your graph. I think visual aids are very helpful to clarify the discussion.<BR/><BR/>That said, I do have some problems with your assumption that government must have poor incentives. There, are of course, problems with the means that we make government accountable to voters, just as there are problems with the ways we keep corporate executives accountable to shareholders. Certainly, the incentives of government officials are not always aligned with voters, just as the incentives for corporate executives are not always aligned with shareholders. Some amount of inefficiency is inevitable in both the government and the market. At the same time, surely actions can be done to improve incentives.<BR/><BR/>Overall, your diagram illustrates Tyler Cowen's criticism of you quite well. You are assuming that the ex ante distribution is fixed (even if the ex post results vary). You apparently believe it is impossible to create incentives in government so that the outcome curve for the government shifts to the right. (At least, you do not mention a shift as a possibility.)<BR/><BR/>Why can't we improve incentives for government actors, just as corporations will improve incentives for their employees?<BR/><BR/>A large corporation does not function much differently with respect to its employees than government. Both function mainly by command and usually individuals employees do not get any profit to incentivize them. Often corporations fail to consider employee incentives and that is at least in part (among many other reasons) why it might be smart to have McKinsey or another management consulting firm examine operations. It should be clear then, that you can change the incentive system for government employees, just as you can for corporate employees. In other words, you can shift your outcomes curve to the right.<BR/><BR/>Shifting the outcomes curve to the right was just what Madison and the others were doing when they designed seperation of powers, federalism, etc. into our system. While those are Constitutional changes, surely it is perfectly possible to make changes to the incentives of government actors to shift your outcomes curve to the right without constitutional changes.<BR/><BR/>I should further note that your outcomes curve arbitrary. Obviously something you made up rather than drew from empirical experience. May I suggest that one outcomes curve is not enough, but rather many. It doesn't make sense to have an aggregated outcomes curve, but rather, you need one for each possible government activity. May I suggest that the exact location of these curves will vary with function, and that sometimes the government curve will lie to the right of the market curve, while in other instances the reverse will be true.<BR/><BR/>Overall, your post vindicates Tyler Cowen's criticism. You have taken the quality of government as fixed. You did not illustrate the possibility that the outcomes curve for government could shift to the right. Furthermore, it illustrates my criticism, which is that libertarians have a tendency to simplistically assume that the market outcome curves lies to the right of the government outcomes curve in all circumstances, which is clearly false.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-1155335834907101732006-08-11T15:37:00.000-07:002006-08-11T15:37:00.000-07:00Plot in Excel, then importPlot in Excel, then importJim Huhttps://www.blogger.com/profile/14144904929556201074noreply@blogger.com