Monthly Archives: November 2016

New Link for Our Panel At IPPA Conference, Singapore 2017

Dear all,

the link provided in my previous post on our panel was gated. Here is a direct link to all panels at IPPA in Singapore 2017:

http://www.ippapublicpolicy.org/conference/icpp-3-singapore-2017/panel-list/7

Browse to Topic 3, Panel 3.

Apologies

Achim Kemmerling

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Why the US and Europe Grow Unequal for Differing Reasons: A look at inequality among football teams

In my blog and in my classes, I frequently use sports as a prism to understand larger social trends. Now I have stumbled upon the Global Salary Report Survey 2016 by www.sportingintelligence.com. It contains information about the highest paid sports teams worldwide. Among the best paid teams most are from the US football, basketball and hockey leagues, as well as from the European football/ soccer leagues.

For this blog I have just picked two pictures which seem to me remarkable: one from the US, one from Europe. The first one is the US football league. It shows the differences between average salaries of each team. The spread between the highest paid team, Green Bay Packers, and the lowest, Cleveland Browns, is not even 2:1. This is incredibly low.

nfl

For the US many economists have shown that inter-firm inequality has increased tremendously in the last decades and that it is a significant reason for higher overall levels of inequality and some extreme forms of management pay. Some have called it the winner-takes-it-all markets. So what happens in NFL? It is well-known that the US political economy regulates little with the exception of professional sports. Politicians struggle with pay caps for CEOs, the tax system becomes less and less progressive (especially in effective tax burdens), and overall the population and the political apparatus seem to have developed a leniency for a great deal of inequality.

Not so in football. Apparently the hyper-commercialized breed of football allows itself much lower levels of inequality. In many professional US leagues there is a wage cap for top players, weaker teams sometimes preferential access to new talent, the worst teams are not relegated etc. All these are protectionist ways to guarantee a level playing field. So why do people cheer for ‘communism’ in football, but not in society? I can only think of a very strong and deeply entrenched ideology to be capable of allowing for this level of cognitive dissonance. So Democrats, next time you need an argument for progressive, redistributive forms of policy, look no farther than the capitalist world of high-end sports.

Traditionally speaking the problem has been the reverse in Europe. We don’t tolerate high levels of inequality for anything else but sports. Major sports leagues are much less regulated than in the US. There are no wage ceilings for football players, there is little in terms of guarantee a level playing field, and if you are unsuccessful on the pitch you are out. The neoliberal dream. I just pick one example from La Liga which shows a veritable duopoly of Barcelona and Real Madrid with all others trailing behind. As sportingintelligence reports the difference between the first and the last is a jaw-dropping 21:1, ten times as much as in the US case. And we know that this has real results such as very little competition for the top prize: the two times won almost 60% of all national championships.

laliga

But again, the inequality in football gives reason for concern for the whole of the European society. Unlike the US, in which more progressive forms of policies could be implemented politically if it weren’t for ideology, in politically fragmented Europe it is much harder to implement Europe-wide redistribution. The attempts of the EU at doing so are pitiful, and the workings of economically stronger governments such as Germany make matters worse. Hence, the problem seems to be more of a traditional political economy one: rich countries don’t want to pay poor countries and the institutions don’t make them do so. In this sense football shows which way Europe is heading. Perhaps European Social Democrats should ask their voters in the future if they are really content with having a handful of powerful economic players dominating the European market in the future.

But the real upshot of using the football analogy for excessive economic inequality is following: excessive inequality is not only tremendously unfair and counterproductive, it is also mind-boggling boring.

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Panel at IPPA Annual Conference in Singapore

Pls. distribute widely this call for papers:

Topic : Policy and Politics

Panel Chair : Achim Kemmerling – Kemmerlinga@ceu.hu

Panel Second Chair : MIchael Howlett – howlett@sfu.ca

Submit a paper for this panel

OBJECTIVES AND SCIENTIFIC RELEVANCE OF THE PANEL

The policy literature has long acknowledged the problem of output instability in policy making. Policies which are adopted and implemented might not last long and may be reversed immediately. Cases that come to mind are the introduction and often immediate abolition of private pension schemes in developing and emerging markets, industry nationalizations and privatizations, attention cycles in environmental policy making or swings between benefit cuts and expansions in welfare state policies. These can result in large problems in so far as vital economic, social and political resources are wasted in over and under-reacting compared to a more ‘proportional’ response to social, political or other kinds of concerns.

 

There are numerous approaches explaining this kind of policy instability. Rational choice scholars, for example, have long analyzed cases of problematic preference aggregation of individuals and groups and the cyclical policies of partisan-electoral pandering that may follow (Riker 1982; McFarland 1991). Valence issues have also been a long-standing topic in political science research (Beland and Cox 2011).  Institutional researchers have been concerned with when and why policy instability is more likely than stability in outputs (Tsebelis 2002). Many researchers have also detected cycles in issue attention which culminate in ups and downs of policy making (Downs 1972; Vries 2010; Jones and Baumgartner 2005). Public policy scholars have long illustrated the structural and psychological roots that lead to well known of patterns of punctuated equilibria (Jones and Baumgartner 2004). Moreover, this instability is often found in combination with excesses in terms of amplitude, i.e. they are signs and consequences of instances of disproportionate policy responses (Jones, Thomas, and Wolfe 2014; Maor 2012, 2014). Important examples are bubbles in financial markets or any other form of excessive under- or over-addressing of policy problems.

 

Yet, much is to be desired in our understanding of such phenomena. The panel seeks to engage these different literatures with each other and to better understand when and what types of output instability are most likely to emerge in which circumstances. What types of excessive instability do we see in public policy making and how are they related to each other? What are the context conditions of, say attention cycles, and how do they interact with other forms of cyclicality? Are they major causes or often mere consequences of deeper rooted structural problems? What real-world consequence do we see in important issue areas such as environmental policies, the welfare state or regulation? And what solutions do we see in mitigating excessive forms of instability and the prospects for more ‘efficient’ policy-making?

 

Beland, Daniel, and Robert Henry Cox, eds. 2011. Ideas and Politics in Social Science Research. Oxford: Oxford University Press.

Downs, Anthony. 1972. The issue-attention cycle. The Public Interest 28:38-50.

Jones, Bryan D., and Frank R. Baumgartner. 2004. A Model of Choice for Public Policy. Journal of Public Administration Research and Theory 15 (3):325-351.

———. 2005. The Politics of Attention. How Governments Prioritize Problems. Chicago: University of Chicago Press.

Jones, Bryan D., Herschel F.  III Thomas, and Michelle  Wolfe. 2014. Policy Bubbles. Policy Studies Journal 42 (1):146-171.

Maor, Moshe. 2012. Policy overreaction. Journal of Public Policy 32 (3):231-259.

———. 2014. Policy Bubbles: Policy Overreaction and Positive Feedback. Governance 27 (3):469-487.

McFarland, Andrew S. 1991. Interest Groups and Political Time: Cycles in America. British Journal of Political Science 21 (3):257-284.

Riker, William. 1982. Liberalism against populism : a confrontation between the theory of democracy and the theory of social choice. Prospect Heights: Waveland Press.

Tsebelis, George. 2002. Veto Players. How Political Institutions Work. New York

New Jersey: Russell Sage Foundation/ Princeton UP.

Vries, Michiel S. de. 2010. The Importance of Neglect in Policy-Making: Palgrave/ Macmillan.

 

 

CALL FOR PAPERS

This panel revisits an old problem of public policy, cases of chronic, excessive forms of instability in policy outputs. Chronic and excessive forms of output instability pose serious problems for policy making in numerous areas: economic reforms, climate change, regulation etc. While some of the theories and approaches addressing this kind of policy instability date back in time, our systematic understanding of what makes public policies fluctuate is still underdeveloped. We seek contributions from diverse policy areas dealing with theoretical and empirical problems of output instability. Leading questions this panel wants to address are: When and how do we see and define pathological instances of instability in public policy-making, such as severe over- and under-reactions? What forms do they take (long stability plus abrupt changes, boom-or-bust cycles, pendulum swings and oscillations etc.)? What are the driving forces of these forms of instability (punctuate equilibrium models, attention cycles, problems of preference aggregation etc.)? And what consequences does this instability have?

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Experts and Real People: Three Lessons for Experts in the Age of Post-Truth Politics

Recently, I was invited to an interesting INET conference organized by the Young Scholars Initiative YSI. One interesting and recurrent topic that came up during the discussions was that even if economists show objectively that migration is not a real problem on objective grounds, people rarely believe this story. Instead the expert opinion sounds counter-intuitive in most people’s ears and hence necessarily wrong.

Ironically enough many experts and pundits have thus now diagnosed the end of policy making informed by expert opinions (e.g. here). The age of Brexit and populism is an age of post-truth politics, in which people cannot easily distinguish between facts and fiction any more.

Unfortunately, this makes the expert the lone hero, a prophet in the dessert which, if only listened to, would know how to fix all problems of humanity. This heroic stance is sometimes noble, but often very misleading. Instead, experts should ask themselves, if the problem lies on their side. The lessons to be learned from this recent crisis of expertise are more complicated than most experts admit. In my own work on the lump of labour idea I have realized that experts suffer from three different problems when dealing with what the public thinks.

First, experts routinely understate their own uncertainty about policy issues. Expertise creates tunnel vision, and experts very often prefer technical fixes over messy political solutions. They also overestimate their own predictive and analytical powers.

Just as an example, Paul Krugman was, for a long time, the champion of those who saw the dangerous potential of the lump of labour fallacy. For most economists the idea that our society runs out of jobs, and that jobs can only be created by taken them away from those who already have a job, is a fallacy. Krugman perhaps feared more the consequences of this belief – for instance a reemergence of protectionism – than the actual veracity of his opinion, but he recently jumped ship to some degree. In the wake of digitalization and automatization processes he recently admitted that problems of transition from job to job are greatly intensified by technological advances and that even very flexible labour markets have a limit in relocating millions of people in a short time span. While one has to applaud a scholar’s flexibility to change opinions, it is also a worrisome sign that scholars engage too much in the publicity game and form too strong positions which, one way or the other, turn out to be wrong.

Lesson 1 to be learned is hence, experts should never overstate their claims and understate the uncertainty around certain claims. They should be more humble.

Second, even if the lump of labour fallacy was a clear fallacy from the perspective of economic experts, ordinary people have every reason to see, perceive and realize the problem way differently. If workers become redundant, or fear that, once they lose their jobs they would have severe difficulties finding a new, similarly paid job, it is very easy for them to see the labour market as a zero sum game in which some workers take other workers’ jobs away. The business cycle, labour market institutions and other factors further enhance this impression.

Lesson 2 is hence that truth operates on very different levels of cognition and perception. It’s simply not enough if experts only focus on quite artificial ‘objective’ facts such as the ‘macro level’, the ‘long run’, or easily measurable outcomes.

Third, once experts acknowledge the uncertainty of their own opinions and the gap between their opinions and those of ‘ordinary’ people they need to develop a strategy for bridging this gap. As a political economist the simplest solution that comes to mind is paying off those who are (or think to be) losers of processes such as globalization, digitalization etc. But in times of severe budgetary problems this is not a feasible, and perhaps not even efficient strategy. For the better or worse, experts need to understand the psychology of public opinion better. In many instances, the real issue is not one of money, or only partly so. The psychological consequences of joblessness or similar seemingly existential threats are much deeper and lead to much hostile reactions against innocent bystanders (refugees, migrations, good citizens). Hence, in a deeper sense experts must learn how to convey a message of meaning to people who think they are losers. For instance, it is well known among psychologists that scarcity tremendously increases demand for something, much more than a market-driven price mechanism could handle. If our society (temporarily or permanently) runs out of jobs, people paradoxically value the remaining jobs much more highly, and enhance the already existing level of ‘objective’ competition. Instead, people need to learn how to cope with job scarcity in many ways, and they need to learn how to define alternative livelihoods not exclusively built around standard work arrangements.

Hence lesson 3 sounds somewhat esoteric, redefining the meaning of life, but it is essential for winning back the masses of disgruntled people.

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