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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Why no EU-wide Compensation Mechanism for Brain Drain?

In Each Crisis Lies a Chance: The British referendum is a tremendous crisis for the European Union. It won’t be enough to merely pass the blame onto uninformed poor or alienated voters. We need to go deeper and understand that the European Union offers very little visible benefits to them. Rather than reacting defensively, for instance, making compromises in immigration or even devolving competences to the nation state, we should discuss how to reform and improve the current set of EU institutions and policies.

While doing so, it is very important to highlight two things: First, such an attempt is not necessarily about deepening the EU further making it a gigantic super-state. It is mainly about fixing some parts of the institutional set-up which seems to be ineffective or broke. Second, the populist equation of integration and loss of autonomy is a fallacy. To the contrary, in an open economy integration in areas such as tax revenues or social policy may be the only way to bring some form of autonomy back.

What could be an example of improving the existing institutions? I know very little about monetary policy, but a bit about EU-wide structural and regional policies. While I don’t agree that these policies have had relatively little impact or are highly inefficient, I do think they often target adhocratic or outright second-order issues. Moreover, there are serious issues channeling the resources to where they really belong. Finally, they often substitute policies at the national level, which creates all sorts of problems. I would suggest that part of this money, or perhaps some more of this money should be used for a specific problem only a union can tackle: compensating externalities.

Externalities, as every econ 101 textbook would show are situations in which either someone produces something for which he or she doesn’t reap benefits (positive externalities) or someone produces something for which he or she doesn’t have to pay costs (negative externalities). It is well-known that international brain drain can be such a source of externalities: some countries (especially those with public education systems which are for free or subsidized) educate their young, but then the young decide to move to other countries to get better earnings and better job prospects.

The best example of such brain drain comes from the field of medical staff. Each year thousands of doctors and nurses move from one country to another within Europe. This creates tremendous liabilities. Medical training is expensive; countries which lose a lot of doctors need to train even more. There are many solutions for this problem. One is to stop public funding is one and replacing it with private education. Yet, for various good reasons, this is not necessarily a politically desirable solution. Another solution would be to introduce fees even in public education. Again, many people find this unacceptable.

But there is a solution, and we only have to look to a field which is very much deregulated, fairly darwinistic, and totally capitalist: professional football. In many professional football leagues in Europe, clubs which train a lot of young players, but regularly lose them to richer clubs, get compensation. This might not be the full costs incurred in training these players, but some smaller clubs have successfully established training academies and have become specialized in this. (a link here?)

What works for the Bundesliga should also work in for Europe. Why not give, say, Hungary, monetary compensation for training doctors who move to Sweden or Germany? The system would be relatively easy to implement. For professions in which training is either very costly, or for society very important (or both as in the case of medical professions), ‘training’ countries should receive compensation for each emigrant they lose. Structural funds could be used for this purpose. They could be earmarked to the very purpose: being channeled back directly to the education system or even the universities or the schools from which the migrating professionals graduated.

I think such a scheme would have many benefits. First of all, rather than damaging the educational institutions in the sending countries, compensation would allow them to turn training doctors into a ‘business’. It would allow strengthening higher education systems in countries which are on average poorer than the other member states. It would also give some more regional balance to the EU and reduce the increasing regional disparities among member states.

Second, it would breathe new life into the rationale for giving structural funds. Dealing with externalities is precisely the kind of task which goes beyond individual member states. Even in football, FIFA has regulation in place for such compensation fees. In general, brain is a huge problem, and the European Union has a lot of money that otherwise goes into projects many of which do not have a clear economic rationale or purpose. And last, but not least, it would not damage national autonomy. To the contrary it would strengthen both receiving and sending countries, as well as the relations between them. It’s time to think big again.

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Another football blog: why the shot-on-target is too harsh

Watching the European Cup is not great fun for those whose standards are the Barcelonas of this world. How could it? These are national teams barely playing together and most of the teams know something about defending and little about attacking.

In former times people always invoked the number of goalless draws or goals scored per match as indications of (un-)attractive matches. With the advent of big data, we all have become more sophisticated and talk about possession statistics, PDOs etc. One often heard metric is shots on target, i.e. how many shots either go into the net, or would hadn’t the keeper or a defender deflected or stopped the ball. Football experts everywhere now use it as a tool for bitching: in this game there wasn’t a single shot on target for X mins. Just as an example, yesterday’s match Portugal vs. Croatia only saw two shots on target and only very late in the game. While I agree that this match was a bit dull except for the extra time, using this metric also shows what’s dangerous in relying on one statistic only, and especially considering the arbitrary decisions that lie underneath it.

manuel-neuer-post

If you think about it: Isn’t a free kick hitting the bar or just going slightly wide much more exciting than a lame long-distance shot easily plucked out of the air by the goal keeper. As in all human activities there is a margin of error which is acceptable if you look not for the final result (a goal), but for the attractiveness of the game (number of exciting opportunities created). In this sense, the shots-on-target metric, as useful as it may be for other purposes is too harsh if you talk about how attractive a match is.

It’s also important for football data scientists to understand that the social use of statistics differs from the experts (nerds’?) intention. There may be ‘objective‘ problems with shot on target measures. But the real issue is a sociological, or perhaps even psychological one. What does the metric do to us, and how does it makes our perceptions of the game change? As with any metric used as a objective target it looses some of its value, once implemented.

I would therefore argue that a more sensible shots-on-target measure should change the definition: include a reasonable perimeter around the goal (say 1 extra meter, or use a standard deviation of the average difference from goal) which counts as effective shots on target. I think this would be a good metric to see how many times in a match a football fan’s blood pressure significantly rises. After all, this is the real measure we want to come close to with match statistics, don’t we?

If you don’t believe me you should watch this short motivational video.

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The European Football Championship 2016: Give Small Nations a Chance?

These are trying times from Trump to Farage. What better route to escapism than watching football? Yet, even watching the European Cup in France there is a lot of moaning. UEFA dared to increase the number of teams. How could they? Football is ruled by an iron cast rules of rules except when profit making is at stake. Hence enter UEFA’s decision to expand the tournament to 24 teams. It’s not the first time, and it won’t be the last. Graph 1 shows that both the World and European Cups have been gradually expanded over time.

Graph_noteams_over_time

This has drawn a lot of criticisms. Some people argue that the ‘minnows’ only know how to defend and the number of goals per tournament drops. I am not sure whether this is the real reason, goals per tournament indeed drop over time, but so be it.

The bigger nations, in particular, moan that they have to play against these tiny nations. (And some of them even dare to win or draw with them.) Moreover, the draw has produced a quirky pairing in the knock-out stage of the tournament. In the upper half there is only countries with no World or European Cup titles, in the bottom half there are all the favourites. Arguably, this was in a large part accidental (why did Spain loose against Croatia?), and most of the problems of large countries’ teams are home-born. But, hey, why would facts ever should keep us from complaining.

More importantly, in the periphery from Iceland to Hungary the new system has seen waves of euphoria. And once Albania’s mood has settled they see that they have far more achieved, despite having been kicked out at the last breath of the group stage.

So it all seems fair and square: UEFA is helping the little nations. But is this true?

Yes and no. I think expanding the number of teams, and hence the number of matches a team needs to win to become champion works rather in favour of larger countries. Just think of it: the European Cups have produced 9 winners in 14 tournaments, the World Cups 8 in 20. World Cups have been dominated by a lucky few, relatively big countries (Brazil, Italy, Germany,…). Just like in national leagues it seems to be increasingly difficult to break these ranks.

The European Cups are (were?) different. You had the Czechoslovak penalty kings in 1976, Danish dynamite in 1992 and Rehakles’ Greek style of catenaccio in 2004. Small nations can win this tournament. To be fair, in some World Cups smaller nations were just unlucky or unfairly treated (the Netherlands in 1978?). But it is still intriguing to ask what makes the differences between European and World Cups.

Well you might say it’s just Argentina and Brazil, but I think a key difference is the number of teams participating which has expanded in the World Cup much earlier.

Why should this matter? The more teams the less likely become upsets. If big (and wealthy?) countries on average are more likely to win, more matches mean the odds turn against small countries. I hasten to add that it is for sure not enough to be a large country to win a cup, just ask the US. But it might be hard for smaller countries to break through.

Graph_lpop_noteams

Graph_lgdp_noteams

The graphs 2 and 3 illustrate this. They show how the number of teams ‘correlates’ with either the size of the cup winner’s GDP or its population (both in natural logarithms to compress the enormous differences between countries.) We see that for all cups the more teams there are, the larger, on average the winner will be. This is clearly no proof. There is a time trend in both data, and there is a lot of variation. But it is also not implausible to assume that more matches means less surprises.

Maybe this year will be different, given the draw of the knock-out stage. Maybe it won’t. But it might well mean that in the future, we see more underdogs participating while the top prize still goes to the usual suspects. But the romantic in me hopes I am wrong.

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