Mark Mazower's take on Social Science, and Communist attempts to explain
away youth resistance to the regime through materialism.
Finally finished the book, and now I'm on to reading Jeff Frieden's
_Global Capitalism_, which is a little bit more engaging as far as I'm
concerned. Mazower started out well, but after a while, it got to be a
little tiring. I have to say, as well, that his stabs at social science
(like the one above) rubbed me the wrong way a bit. Don't imagine
Frieden will make too many stabs at Political Scientists or economists.
One of the important theories which my dissertation will wind up
addressing will be a theory of decentralization based on
"inter-jurisdictional competition." In normal English, that's "race to
the bottom" dynamics (where municipalities compete for investment by
cutting tax rates and services, leaving their residents worse off.
Sometimes, in American politics, this is called the "Delaware Effect,"
because Delaware supposedly has all those credit card companies and
banks in state because of their permissive tax structure and
regulations. A contrary story is told by some advocates of
decentralization which posit that, rather than a "race to the bottom,"
there is a "race to the top," in which municipalities compete for
investment by working to improve efficiency, and to make life more
comfortable for businesses and residents by providing services. This is
also sometimes called (by Americanists) "The California Effect," because
California has supposedly attempted to attract business by providing
better services.
I might note that I say "supposedly" here, because although I've read
some academic work that brings these characterizations into question
(does Delaware really attract investment because it actually provides
better services--like legal services--to credit companies?), I've never
seen these characterizations made in an especially rigorous or
systematic way. And I'm no Americanist, so I don't know anything about
Delaware or California (except that their capitals are Dover and
Sacramento--thanks to Mrs. Steinnagle, my 3d grade teacher)
One of the ideas that I've had while starting out this dissertation
research is that the idea of comparative advantage--that countries are
better off when they trade freely with others because they can
specialize in the things that they produce most efficiently (so the
Japanese make cars, and US firms make... mmm... movies? genetically
modified beef? spoiled children?)--might apply as effectively to local
communities as to countries.
I've been thinking a lot about this the last couple of days...
Actually, that's a lie. I've been thinking about comparative advantage
and its effects on government spending for at least a year as a result
of a paper I've been writing with the brilliant and well-dressed David
Brown.
But in any event, I've been thinking about comparative advantage at the
local level since getting down here to Guatemala. It seems like pretty
much common sense that towns will possess comparative advantages in
particular types of industries (Santa Catarina Barahona, the
municipality I'm doing now, will have a comparative advantage in
industries that use a lot of land--like agriculture, which uses up about
90% of their municipal area). In places like this, these
comparatively-advantaged industries will have a lot of political clout.
For example, since most of the families in Sta. Catarina are engaged in
agriculture (because agriculture there is relatively more efficient
than, say, the production of polyester leisure suits), farmers will have
a lot of political clout than leisure-suit tailors or weavers (they have
more money than other industries in town, and more votes).
As a result of this, government will have two compatible incentives to
spend more money on agriculture.
First, if the government wants to build up its tax base, they could work
to make agriculture more productive than it already is.
Second, if the government wants to please its citizens, they can provide
services that the dominant industry can use.
So, in brief, the theory goes like this...
1. Municipalities will have comparative advantages in industries that
use a lot of the factors of production which are most abundant (relative
to one another) in town.
2. Those comparatively-advanaged industries will be wealthier and more
powerful than other industries.
3. Those comparatively-advantaged industries will also be the
municipalities' best chances to improve their tax bases, by making those
industries more productively (and helping them generate more income that
the government can tax).
4. Therefore, governments will spend more money on services which will
help out the industries in their boundaries which enjoy a comparative
advantage.
5. Finally, Glenn's moustache is awesome.
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