The Need for Health Insurance Competition

Following up my earlier post on health care and the Supreme Court's decision, and the very interesting comments of a friend on Facebook (Note: both a Facebook friend and a real friend.  At the same time, even!)

The individual mandate--the requirement that everybody get health insurance somehow--is a solution to one part of the US public's health care dilemma.  That is, the health care costs of the most unhealthy are borne unevenly by those who have health insurance.  In the pre-Obamacare era, people with pre-existing conditions, people with really bad health, people who were old, etc. had a really hard time getting affordable health insurance.  So a lot of them went without, basically because they couldn't afford it.

In a fair world, maybe not being able to get health insurance would mean that you wouldn't get sick.  Of course, that's not what happens--your proclivity get sick makes you less likely to be able to afford health insurance.  So what happens?  You get sick, but can't afford treatment, so you get sicker and sicker until you have to go to the emergency room.  And they don't turn you away, so you get treated there, at the emergency room, which happens to be the most expensive place to get treated for just about anything.  And the hospital has to cover those costs, so what do they do?  They charge everybody else a little bit extra, through those other peoples' insurance.

So what happens?  The insurance gets more expensive over time, and as it gets more expensive, more people can't afford it, so they go off insurance, so they start waiting and going to the emergency room...  It becomes a spiral.

Okay.  So what's the solution?  Well, the individual mandate is one solution.

But there's actually another problem, which goes like this:

Everybody is always trying to make a buck--put their kids through college, put a new roof on the house, put gas in the Explorer, whatever.  So the doctor recommends that you get more treatments, diagnostics, office visits, vitamin injections, MRIs, whatever.  But he doesn't charge you or me.  He charges our insurance company.  And they then spread out the cost and pass it back to you in me, more or less evenly.  Basically, most doctors get paid for doing piecework.  More office visits, more exams, more x-rays, the more they make.  And basically, insurance companies don't care, because they can pass the cost back to consumers.

The solution to this might be greater competition in the health insurance market.  This is where the HIX comes in.  HIX is the new three letter acronym for "Health Insurance Exchange."  This is one of the things that is required under the new health care law in the US.  State governments are required to set up an "insurance exchange," which is supposed to be a clearinghouse for businesses and individuals looking for private insurance.  The idea is that individuals will go to this source in order to shop for insurance.  And the theory is that by having a single place where people will be able to gather information about insurance, there will be more competition in the market, and health care costs will go down (or at least stop rising).

Will it work?  Maybe.  I kind of doubt it, but maybe.  But it certainly can't be worse than the pre-Obamacare system (which, I should add, is the most expensive in the world).  Time will tell, but keep your fingers crossed.

You might think about signing up for an HMO if you have the opportunity.  Kaiser Permanente is a good example.  Those guys get paid a flat fee for keeping you healthy, so their incentives are to provide you health care as cheaply as possible.  Which sounds like a bad thing, but it's not, because the cheapest thing of all is for you never to get sick in the first place.  So prevention is key.  Also, they like to keep you out of the office, so you can do a lot of stuff with them over the phone, including consulting with doctors and nurses.

Couple of Thoughts on Health Care

So, in a bizarre twist of fate, John Roberts joined a Kennedy-less Supreme Court majority to uphold the Affordable Care Act ("Obamacare").  Didn't see that coming.

The argument that the court majority stood behind was evidently that ordering everybody to get health insurance was basically like a tax.  The government can order you to pay for services through taxes, so why not "tax" you by telling you to get your own health insurance.

This makes a lot of sense.  The individual mandate is a solution to a collective action problem (Emily is rolling her eyes as she reads this).  This is because we all would rather not pay for our health care and get it for free (which we usually do by buying insurance).  And nobody (least of all doctors) are willing to let you die in the waiting room, even if you can't pay.  But if I don't buy insurance and then I get sick, you pay for it.  The cost is externalized on everybody else in the system that does have insurance.  

Basically, these externalities make health insurance a (impure) public good.  You all benefit when I'm healthy (and not just because you get to look at my luxuriant moustache all the time), and you all benefit when I have health insurance (because then you don't have to pay for me to stay healthy).  There are other reasons why health care is a public good, too, like the fact that healthy workers are more productive and make our economy productive and make us all richer.  But I don't want to get into that here.

Normally, when there is a public good, it's hard to provide in a market.  That's because the nature of public goods is such that I still benefit if I don't pay for the good.  Radio is a good example.  I can still tune in, so I don't have a really strong incentive to kick in for it.  That's why NPR pledge drives take so long.  Often, when there is a public good that everybody will benefit from, the government gets around this "free rider problem" by forcing everybody to pay taxes, then providing the service with that revenue.  It's not a perfect system, but it works better than the alternative.

In the case of health care, what a lot of countries do is treat it exactly like a public good.  The government collects taxes and provides health care services.  What we're going to be doing under Obamacare is only different in that individuals get to pick what level of insurance coverage we want.

This system has some problems, too, but it is probably a pretty good solution to the free-rider problem.  And I'm sure that it can be made to function much more efficiently than our current system (which is pretty much the worst case scenario).  The individual mandate probably won't help address escalating costs in healthcare--probably there needs to be government regulation to fix that--but it will solve the free-rider problem and make it much more affordable for everybody to get health insurance.

So, yeah.  Health insurance is a "tax".

One wonders if this all occurred to Roberts, and if he decided that the individual mandate was better than the obvious alternative, which is a Canadian-style single payer system.  I don't have a single payer system, though I suspect with some hybrid we can do better.

Makerere v. UAS

Area	Makerere	UAS	Points
Natural setting	Attractive hilled city.  Features crazed boda-boda drivers, traffic jams involving wheelbarrows, storks, and AK-armed security.  Goats on the roadside.  Cows in the road.	Alaska.	+1, UAS
Office	Window, cross-breeze.  Also, bars on the door, bars on the window, two padlocks and two deadbolts.  Has a 2002 HP desktop.	Essentially a broom closet.  Better internet, though.	+1, Makerere
Cuisine	Menu is the same every day.  Chapatti, matoke, rice, beans, greens, beef stew.  Service is immediate and friendly.  Mountain dew in glass bottles.  Has not yet made me sick.	Menu is the same every day.  Service is slow but friendly.  Beverages flavored with corn syrup.  Only occasionally makes me feel ill.	+1, Makerere
Companionship	No family.  Night-time companionship would primarily consist of prostitutes.	Family, poodle who wants a tummy rub.	+2, UAS
Politics	Hybrid regime, formerly a single party state.  Government is a guerilla movement that seized power.  Clientelism is widespread.   “President” sports a moustache.	Democracy.  Government is a guerilla movement that seized power.  Pork barrel politics are epidemic.  State legislators are hirsute.	Draw

Turn of the last century

Just doing some (embarrassingly basic) catching up on African geography (never claimed to know anything about Africa--although now I know a little bit), and I ran across a reference to the Fashoda crisis.  For those of you not of the old school of International Relations, the Fashoda crisis was a diplomatic crisis over a strategic part of Africa that nearly started a war between the British and French. The Brits wanted to build the Cape to Cairo railroad, while the French wanted to draw a line of colonies across the Sahel from West Africa to present day Somalia.  Where these two lines intersected was near Fashoda, in modern day South Sudan.

The French sent troops to occupy Fashoda, so did the Brits.  There was a standoff, and the British won.

For some reason, IR scholars view this as important, even though neither the French nor the British were able to connect the continent end to end in the final tally.

However, what really struck me about the Fashoda crisis is when it happened.  1898.  I realize that this is silly, but that was an eventful time in history!  The British were also gearing up for the Boer War, the Spanish American War was starting, as was the Klondike gold rush in the Yukon.  The Boxer Rebellion was about to kick off in China.  It would also only be three years until William McKinley would be assassinated by anarchists.  No wonder anarchism was gaining ground at such an unsettled time when the world was changing so quickly.

Some First Impressions of Jinja

No doubt my impressions of Jinja as a city are helped by the fact that i'm splurging on lodging here, and staying out of town in a very nice place in the countryside.  Supposedly, the lodging at this joint is "safari tent."  Which might be true, as I've never been on a safari before, but that would mean that safari tents have metal roofs and concrete walls.

Nevertheless, the place really is fantastic, with many genuine safari-like treats, including monkeys running across the metal tent roof, geckos (Do they have geckos here?  Remind me to ask Carl.  Thing could have been a Komodo dragon for all I know) and toads trying to get into my "tent", mosquito coils, solar hot water heating (that appears to actually reliably produce hot water, blessed be!) and an outstanding view out over the Nile river.

So, remember when I said, "trying to get in" a couple of lines ago?  Strike that.  The toad's in.

Also, there is a great restaurant here at which I ate pan fried Nile Perch.  Nile Perch: It's better at the Nile.  Also, like all other fish, it's better fried.  Except Salmon, which is really not that great fried, though I never would have suspected until I tried it once with Zane.

Anyways, Jinja is awesome.  All the good parts of Kampala with out the crap.  Think I might have seen two prostitutes today.  That is a significant decline from Kampala, where the prostitute density is about 900/hectare.

There is also a good café in town, which is a prerequisite for me to consider a place a "great town".  Had a waffle for lunch.  Waffles tend to help my outlook.  In addition, Jinja hosts the Aaswad restaurant (snicker snicker).

Jinja also still has much of its colonial architecture.  Not to glorify the colonial period or anything, but the low, well-ventilated structures the locals were building here in the '20s are a lot better suited to the climate than the steel and glass monstrosities that people everywhere in the developing world seem to think mean "prosperity."  Well, not to pick on the developing world, either, because I can't think of any reason I would want to live or work in a glass-faced building if I could avoid it, including in Denver.  Or Juneau.  Of course, I'm not a lawyer, so I couldn't work in that building in Juneau anyways.

There goes that toad.  He seems to be exploring.

Here's a hint, guys.  Glass windows that you can't open make your building warm.  That's fine if you've got air conditioning, or if you're in the Arctic.  If not, maybe drop that idea.  And you know what?  If you're building a glass-faced building in the Arctic and your name doesn't have like nine consonants in a row, you might want to rethink your glass high-rise anyways.  

The one annoying thing about this place?  Aid workers in the restaurant talking about which compound in Kampala they would like to live in.  Aaswads.

I once did an interview in a municipal building down in the jungle in Peru.  Had a translucent, corrugated roof, and the same un-openable glass windows on all sides.  I don't know why the government employees didn't strike.  I suppose that it's a good thing that it was otherwise concrete, because that would make it relatively difficult for a municipal forestry official to light on fire.  I started sweating so profusely, I was afraid I was suddenly running a fever.  But nope.  It was just 120 in there, at 99% humidity.

Okay, time to sign off.  And it looks like the toad wants to go out anyways.

Boats! (Dories, actually.)

As many of you know, I have somewhat different standards for what makes a research project successful or prestigious than most other political scientists (indeed, most researchers in general).  Specifically, I have one condition that needs to be met for me to consider a research project important, worthwhile, scientific, or useful.  That is, it has to get have a boat.  Doesn't matter what kind of boat.  And doesn't really matter what kind of condition the boat is in or how expensive it is or anything like that.  Just.  A boat.  A. Boat.  J-boat, sneakbox, dugout canoe, whatever.

So far, therefore, my research career has basically been a failure.

Nevertheless, I did see a whole bunch of boats today.  I'm in Jinja, East of Kampala, which is at the source of the Nile--where the Nile river comes out of Lake Victoria.  There's boats here.  Lots of them.

The boats here in Uganda have flat bottoms, conical sides, with a transom and a slightly raised bow.  Basically, they're dories.  Amazonian riverboats are usually dories, too.  Wooden, planked dories.  Usually, they're carvel planked, but sometimes they're lapstrake.  Whatever their planking construction, they're awesome.

Dories are great boats, and tremendously versatile.  The famed Grand Banks cod-fishing dories could carry thousands of pounds of fish (in fact, didn't feel stable without them), Swampscott dories were great pleasure rowing and sailing craft, and Maine Bateaux's are dories that were used for logging.   John Wesley Powell, one-armed Civil War vet and pioneer used the dory to explore the Grand Canyon.  They're very seaworthy, can carry a huge load, and they're cheap.  They're also easily driven, and can be moved by oars or by an outboard motor--the presence of a transom is one of the things that keeps the design alive.  Dory hulls are one of the more popular designs in Southeast Alaska.  

The boats here are planked with wide, rough-cut planks.  Not quite as wide as the ones you see in Peru (some of which are 3 or 4 feet wide), but these here are still planked with lumber that would be very expensive to buy in the US.  If you could even find boards that wide.

Regular (propeller) outboards are moving most of these--as opposed to Alaska, where dory-hulls are often moved by jet outboards, and Peru, where they're driven by long-shaft motors.  Nary an oar to be seen.

Dories are awesome.  I want one.  

 

Coffee

Ugandan coffee?  Awesome.  Very bold taste, but not very acidic.  Very similar to Andean coffee.  I would call it my second favorite, after Bolivian coffee beans, before both Peruvian coffee (uneven quality) and Guatemalan coffee (milder taste and a little rougher on your stomach).

Though my favorite place ever to get coffee remains the shack in San Pedro La Laguna, Guatemala, where the beans are being roasted over burning wood chips on the counter, coffee bushes are growing out back, and you drink your espresso out of a tiny paper cup, as all the hippies, Israelis, and hippie Israelis wander up and down the street, scratching their bedbug bites, buying Bob Marley apparel and pot and trying to ignore all the signs saying "Jesus Loves You" in Spanish.

It also seems to be much easier to find cafés here that provide good quality coffee than in Peru or Guate., where most of the good stuff is exported.  Though I gather that Ugandan coffee exports are also huge.  So maybe it's just that I'm in the capital.

Drinking coffee here is also a joy, because they typically serve the coffee "English Style" which usually means that they bring you a little pot of coffee with about 24 ounces worth, a sugar bowl, a teacup and saucer, a little pitcher of milk, and two spoons.  I much prefer this to the German approach that they take in Guate. (and also Chile), where the coffee comes on a saucer with a cookie and with a little glass of seltzer water.  Highly acidic coffee + seltzer ≠ classy.  Highly acidic coffee + seltzer = heartburn.  But then, Guatemalans, who eat refried beans for all three meals apparently have ceramic-lined, cast iron stomachs.

When I can, I've been drinking two pots of English coffee, which is enough to get me good an wired.    

Coffee in Chile is the worst.  Their idea of a classy coffee joint is a place where they serve you coffee German style, there's no place to sit down, and all the bariastas (waitresses?) wear hot pants.  Though there is even Dunkin' Donuts in Santiago, you can't get a regular coffee--only little tiny take-away cups of espresso.  And all the coffee is "French Roast" (read: burned).  Note also that chileans like avocado on their hot dogs.

On the other hand, in Hungary, the waitress looks at you in disbelief when you ask for multiple shots of espresso.  ("You mean he wants four espressos?")  Absinthe?  No problem.  But four shots of espresso and you might as well be trying to buy heroin.  Although you probably would have less trouble buying heroin, and there would be less social stigma.

Conservatism and Conservationism

This is a bit of a soap-box of mine, and no doubt many readers of this post will be familiar with my rant on this, but for one reason or another, it's come to the forefront again.

For whatever reason, Alaskan politics seem to show the same links between pro-conservation policy and the left wing.  Of course, in Alaska, nobody is really anti-oil, so it's mostly a question of how quickly to drill and how much to tax Exxon.

This isn't even interesting to most people--of course conservatives are anti-environment, right?  Except it really doesn't make much sense, when you think about ideology, history, and so on.

First off, the Republican party was the party of conservation right from the get-go (almost literally... Ulysses S. Grant created our first national park in the US), and was strongly associated with conservation right on through.  For example, Teddy Roosevelt was a strong conservationist (created the Forest Service, for example).  And even as recently as the 1970s, Republicans were pro-environment (Richard Nixon, after all, created the EPA).

Further, conservatism and conservation are ideologically compatible.  If we assume that frugality and living within our means is a key conservative value--and you can question this when you look at which recent presidents have run up the deficits and which have cut them, but most Republicans would argue that fiscal conservatism is a key component of their ideology--it's hard to see how conservation of resources is any different.  Oil, coal, timber, fish... these are all resources that can't be used up too fast, or they go away, in just the same way as government revenues can't be spent too quickly without creating problems.  Frugality in resource use is not very different from frugality in government spending.

Nor is it clear that anti-conservationism is a key value of important Republican demographics.  Commercial and sport-fishermen and hunters are more often Republican than not, and these are groups that have important reasons to be pro-conservation (though their discourse sounds a little different from that of the average member of the Sierra Club).  And even though there are many conflicts between users of public lands, snowmobilers and off-roaders all favor more public land for recreational purposes.  These groups also tend towards conservatism.

Which, of course, raises an interesting empirical question--why exactly are republican politicians so anti-conservation?  But that is a question for another time.

Small Arms and Civil Wars

Okay, so I know that I've kind of been on this gun kick recently.  I'll be over it soon.  Sorry.

But in the meantime...

There's sort of this long-running debate in Political Science between people who think that grievances are an important cause of civil wars, and there's another group of people who think that civil wars are all about opportunity--that there are always grievances in any society that are strong enough to cause a civil war, but they only break out when rebellion is likely to be successful.  This is characterized (caricatured?) as the "Greed v. Grievance" debate.

So, I'll go on record here in saying that I think grievances matter, and there are places where grievances are stronger than others, and there are places where there are more grievances than others, and I suspect that will eventually be shown to be associated with civil war outbreak.  Or I could be wrong.  Whatever.

Setting that aside, there's pretty good evidence that factors which lower the cost of rebellion, or increase the rewards to rebellion, are associated with civil war outbreak and duration.  So, where it's easy to start and fight a rebellion because you've got favorable terrain (mountains, jungle), you get more and longer wars.  Also, when you can pay for your rebellion easily because you've got "high value, low weight goods" (cocaine, diamonds, shrunken heads) you get more and longer civil wars.  So, Colombia has the FARC (cocaine, jungle), and Afghanistan has... well... you know, like the whole Afghani population (mountains, opium poppies).

It occurs to me that one of the major costs of an irregular rebellion (a guerilla war) is probably small arms and ammunition.  When we talk about the Viet Cong, or the FARC, or the Afghani Taliban these days, we're not talking about armies with tanks and jets and artillery.  Or uniforms.  Or even very nice clothes, or food, a lot of times.  We're talking about dudes with rifles and rocket propelled grenades, and maybe a mortar or something.

Anyways, if high-value, low weight goods make it more likely that you'll get a civil war because you can buy guns, won't it also be more likely that you'll get a civil war because those guns are cheaper?

If that's true, won't it also be true that you'll get more civil war where you've got more small arms?

So, basically, I'm wondering if civil war is going to be more or less costly in the future, if this dynamic is true.  There are a lot of people making guns these days.  But the truth is, there are probably going to be fewer small arms on the global arms market in the future than there have been for the last fifty years or so.  It's no coincidence that when we think of a guerilla fighter, we think of a guy with an AK rifle.  That's because the Russians and Chinese basically relied on the same grand strategy for defense, which was something along the lines of "if we have more guys with guns, we'll win."  Basically because they knew that, in terms of population, there aren't too many other places that could compete with them.

And of course, everybody else knew that too.  So the US didn't have an enormous standing army like the Russians did.  Instead, we made lots of nuclear weapons and other sophisticated technology.

Anyways, a lot of those AK rifles have been banging around out there in the mountains and jungle for a long time now.  Some of them, like 65 years.  And those rifles are pretty tough, but they're getting old.  And a lot of them are wearing out, and don't work very well anymore.  As time goes on, that's going to be the case more and more.  Because the Chinese and the Russians no longer are keeping up the huge ground armies they once were, and they're not making as many guns as they were, I think.

Or am I wrong?  Are there more rather than less guns out there these days?  Or is this whole idea silly?

Couple of Random Thoughts

1.  Changed where I'm staying in Kampala.  It was a little too far away from the action (and by "the action," I mean this one café that I really like).  Also, the "hot water" I was paying for was not reliable (By "not reliable", I mean nonexistent.  Hell, I felt lucky when I didn't have to bathe with a bucket and a cup.)  Prostitues coming to the door didn't help, either.  Or the maintenance dudes coming in without warning when I was walking around with no pants on.  So yeah.  New place.  A little bit more expensive.  But, there's free wi-fi.  Which appears to be working at the moment.  And even though I'm now in the heart of the city, it's a lot quieter.  Except when the evangelical church in the building is having services.

But at least pentecostals here sing on key.  Unlike Guatemala.

And "a little more expensive" is still like $15 a day.  I can afford that.  I'm an assistant professor.

2.  For the last couple of days, I've been drinking this locally manufactured instant coffee.   Don't ask my why I'm drinking instant coffee in a place with such excellent local beans.  But the stuff doesn't taste too bad for instant, but man, it is weak on the caffeine.  Although it almost makes up for it by coming out of a package that looks like homage to Mao and the CCP.

3.  A couple of days ago, I tweeted about the security guard I saw with the street sweeper.  That is, the fully-automatic 12 gauge shotgun manufactured in the 1980s, called the "Street Sweeper."  Most of the security guards and police here are armed with old Russian rifles (AKs and SKSes), with the occasional (really beat up) pump shotgun thrown in for good measure.  And every once in a while you see some guy with an old M-16.  But today I saw a security guard with a genuine Springfield 1903-A3 bolt action rifle.  That was unexpected.

Mostly, the security guards with guns make me nervous.  Those Kalashnikovs are fully automatic, and I have no illusions that those guys know how to operate them, let alone handle them on full-auto.  In a crowded city with hundreds or maybe thousands of people in the immediate vicinity at any moment, any security guarding that involves a magazine full of 7.62x39 is not going to be good news.

Okay, I know that there are a lot of Ugandans who have been soldiers.  In fact, there are a huge number of military contractors in Iraq and Afghanistan that mostly hire East Africans.  Still.  It's freaking scary.  Does Barclays bank really want those guys lighting the whole city up when somebody comes calling with their own assault rifle?  

When I was walking into the new lodging today, one security guard was heading off his shift, and handing the 12GA pump over to another guy.  Which apparently involves reading the serial number and writing it down in a book.  Which, of course, you do while holding the shotgun horizontally, pointed at the little shop at the back of the building, right?  At least his finger wasn't on the trigger.  I hope he didn't have a round in the chamber.  Actually, I kind of hope he didn't have any ammunition at all.

On the amusing side, many of these old AKs and SKSes still have the spike bayonets attached.  I will leave it to your imagination how that would work.

4.  There's another Westsail 32 in Juneau, up on Craigslist.  A little tempting.

A Ugandan Bookstore

Very quickly after I arrived in Uganda, I had gone through my recreational reading.  And although I do a lot of reading on my phone these days, you can't exactly haul out the iPhone in your average Ugandan greasy spoon without attracting a lot of attention.  As I'm alone most of the time here, and therefore spend a lot of time reading while I wait for my food to arrive, I took a hike down to the "biggest bookstore in Uganda" to pick up some new reading material.

"Aristoc," this bookstore, is probably about the size of the smallest bookstore in Juneau, smells mustier than my folks' basement, and requires a security pat-down to enter that rivals the one you apparently receive when visiting the Dalai Lama.  Those people who complain about airline screening procedures in the US have never visited a Ugandan bookstore, supermarket, or tourist café.

One advantage, by the way of being a white guy with an ostentatious moustache in a place like this is that, after the first couple times of checking your bag, they recognize you and just wave you through.  So, tip to potential terrorists: two words.  Handlebar.  Moustache.

Surprisingly, the bookstore is filled with (what else?) titles in Political Science and Economics on development, state-building, and civil war.  Sachs, Easterly, Huntington... All the popular junk, plus enormous tomes like "The Solder and the State."  That's the first sign that there are too many aid workers in this city.  Second sign is that the people in the forestry department at Makerere University refer to my teaching stats as "capacity building," but that's another story.

Had a hard time locating the non-Civil War Africa books (sorry, IR folks.  Not my cup of tea) and ultimately picked up V.S. Naipaul's The Masque of Africa, which is sub-titled, Glimpses of African Belief.  Naipaul clearly doesn't have a good understanding of the way oil distorts economies and has a weird thing about not wanting to pay cash when there are religious connotations to an activity, but the book is interesting and engaging, if a bit depressing.

Sort of focuses my attention on religion here.  Will blog more about that later.

Some thoughts on Elinor Ostrom

Just heard about the passing of Elinor Ostrom, one of the greatest minds of our day.  Only met her once.  I am happy to report that at least I wore my good suit that day!  I knew she was not well, but it never occurred to me that she wouldn't be around at some point.  I always assumed I would bump into her again at some point.

My meeting--I was introduced by my PhD advisor--was brief, but memorable.  It involved a fawning group of political scientists (most of them accomplished scholars in their own right, but who reminded me of eager elementary school kids trying to get their teacher's attention), an exploding LCD projector, and a purple sweatsuit.  She gave a talk which started out poorly, weighted down by powerpoint slides, that made a sudden and remarkable turn for the better when, in a flash of light and a puff of smoke, the projector bulb popped, forcing her to riff the rest of the talk.  Which went from terrible drudgery to deeply entertaining.

When Krister, my advisor, told her what I was working on, she said, "You're doing very important work."  I said, "I'm glad, but mostly I'm just having a lot of fun."  She smiled and said, "I've been doing this for forty (did she say forty?) years, and that's what's kept me going."

Ostrom is commonly described as the scholar who recognized that common property--what we call common pool resources--which are things which can be used up but which anyone can extract--could be effectively managed by small-scale, informal governance arrangements that do not require the heavy hand of the state, or the creation of property rights.  That is her most well recognized insight, but more important than that, perhaps, is that she spawned a large, well-organized research program that has succeeded in disentangling much that was mysterious about why people often fail to conserve their resources.

Ostrom's most famous work is her book, Governing the Commons.  But her CV would stretch to the moon and back seven times.

A sad day, but her students, friends, and colleagues continue her work through the institutions and norms she fostered.

Education Policy and Dutch Disease

So, as I tell my students, Dutch disease is not carried by windmills and wooden shoes…

In related news, Anchorage is, by at least one (admittedly pretty strange) measure of intelligence, one of the most intelligent cities in the country.  See here and also here.

Leaving aside for a moment the weird measure of "braininess," which troubled me less once I read that it correlates well with levels of education and other, similar, more typical measures, this brings me some hope for Alaska.

Although I am no economist, I believe there are strong reasons to believe that Alaska faces what is called "Dutch disease."  This is an economic phenomenon by which economies with valuable resources experience a gradual economic decline in their non-resource extraction sectors.  The reason is that, as they export oil (could also be gold, diamonds, cocaine… whatever…) all of this money flows into the local economy.  Some money flowing in is good, but if you get too much coming in, the inflow of currency tends to drive up prices for other economic inputs, including raw materials and labor.  This inflation makes it difficult for non-oil industry firms (for example) to stay in business.

Take, for example, Alaska's tech industry.  There is no Alaskan tech industry, you say?  Well, of course, that's correct!  Why is that?  Alaska has much to offer tech firms, including a stunning outdoor environment (smart people love the outdoors), a location which is, paradoxically, very close by air to most Northern cities, and beautiful summer days with endless sunlight.

Also, we have icefog.  But forget that for a minute…

Because there is so much cash in the Alaskan economy (because of cash inflows from oil), prices for everything are very high up here.  This makes it hard for tech firms located in Alaska to attract talented people (they have to pay them more to keep them, because the cost of living is so high), and when they do attract them, they're so expensive that whatever goods or services the firm is producing get sold for higher than their competitors.

Ultimately, they leave the state, or they go out of business.

This idea is counterintuitive, because it seems like, if you've got oil, your economy should be doing better, not worse.  But Dutch disease has been documented in a number of economies around the world, including in the Netherlands, after the Dutch discovered oil in the North Sea in the 1970s.

If I'm right (and I'm no economist, so I certainly could be wrong), what do we do about it?

Well, I think the answer is, "for the moment, not much."

Because we're so far away from so many places, most conventional industries (manufacturing, etc.) are probably not what we can do well.  Nor is agriculture, and there probably isn't enough non-oil resources to keep our economy humming once our oil starts to run low.  So the options that are left to us are high value-added industries.  Banking, technology, engineering, etc.  Stuff that requires really smart, educated people.  But even these industries aren't going to take off until the oil is gone, and that won't be for a while, probably.  Ten years at a minimum, probably much longer.

Fortunately, we've done some smart things with our money--we've got all this money squirreled away in the Alaska Permanent Fund and the Constitutional Budget Reserve, and if we're smart about it, that should help us have a soft landing when our oil gets cut off.

In the meantime, the best thing we can be doing is investing in things that will help us develop and attract a smart, educated workforce once the oil slows down and the symptoms of Dutch Disease start to go away.  As an individual with a vested interest in sinking more money into the Alaska higher education system (so take this with a grain of salt, perhaps), we should be spending more on the University system, and we should be seeking to reform our secondary and primary schools so that we're no longer middle of the pack (compared to other US states) when it comes to math, reading, and science testing scores.  We want to be at the top.  This may mean more spending, but as a former high school and middle school teacher, it doubtless also means introducing stronger incentives for teachers to do a good job.  Things like vouchers, merit bonuses, and greater supervision by administrators.  And if those things are too controversial, any other evidence-based reforms that have been shown to improve student achievement!

 

Private Security and the State

One of the interesting things that I notice here in Kampala is the prevalence of agents of the government (like police and the military) playing a role doing the kinds of things you normally think of police doing.  Like policing.  And hanging around.  No donuts here, but there do seem to be a lot of police checking their cell phones all the time.

I'm still sort of getting ahold of all the uniforms here and what uniform is associated with which organization, and my observations are purely impressionistic, but it seems to me that there are many fewer private security officials here in Uganda when compared to Latin America.  Especially when compared to middle class and upper class neighborhoods in cities like Guatemala City, Lima, and La Paz.  There, every city block, coffee shop, bank, and grocery store seems to have its own private security firms.  Here, you see some of that, but you don't see (for example) private security guards driving around in cruisers that are not distinguishable from police cars.

Latin Americanists have often framed the rise of private security as a problem: private security as a response to the State's inability to control crime.  And because only the rich can afford private security, it means that the poor are hit harder by crime (which is typically the case anyways, but this is just widening the class gap).  Of course, that may be true--although it's also an empirical assertion that I've never seen tested.

However, the absence of private security here makes me wonder if that story is only part of the picture.  Maybe Kampala has so few private security firms because the state is unwilling to permit the possible threat to power that private police forces might create.  Does the absence of private security reflect the state's tendencies to resist pluralism and democracy?

Gold!

The BBC is reporting a "gold rush" by independent miners in the Amazonian lowlands, and something similar seems to be going on in Nome, Alaska.

Although Alaskans often believe themselves to be on the global periphery--Alaskans define their identity in part through their remoteness from the rest of the US, and indeed from the rest of the world--Alaska often finds itself in the middle of global economic and political currents.  A good example is the current commodity boon that is driving up the prices of things like oil, copper, gold, and other resources.  Similar dynamics drove the 1898 gold rush, and other resource-based industries in the state throughout its history. We may be far away from the source of this boom (economic development in places like China, India, South America, and even here in Africa), but globalization brought the effects to Alaska in the 19th century, and they continue to bring them in the 21st.

As an Alaskan conservationist, what to do?  On the one hand, I'm no big fan of mining, in Peru, Alaska, or anywhere else.  I don't like the environmental costs.  Of course, I use metal stuff (and other stuff that's mined).  So it's a little inconsistent to be opposed to mining across the board.

Intuitively, I sort of like the idea of wildcat miners--like those in Peru who are seeking precious metals in the lowlands.  These guys are typically poor and under-capitalized, and they really could use a hand.  I hate to see the Peruvian government cracking down on activities that might make poor people richer.

On the other hand, these "artisanal" miners are a total environmental disaster--a major cause of water contamination and deforestation, and they hurt other local people in those areas where they operate, but they also hurt the rest of us (for example, by preventing rainforest carbon sequestration).

Alaskan mining isn't great (and you won't hear me advocating for Pebble mine any time soon), but I often wonder if it's better to permit or encourage mining in places where governments are more able to regulate environmentally risky practices.

By the same token, I wonder if it's better to have large mining firms operating large, well-capitalized mines (which can remain safer and less environmentally harmful more easily) than having lots of wildcat miners dumping heavy metals into the Amazon in a very dispersed way that's very, very difficult to regulate.  Large mining firms are not saints, and they have certainly seen their share of environmental and human disasters, but my suspicion is that poor, unregulated, independent miners are even less interested in public health and environmental conservation than firms like Anaconda, Rio Tinto, and Barrick.  And they're more decentralized, harder to regulate and control, and they care less about international concerns for health and conservation.

Dress and Modernization

In my office in Colorado, I started keeping a collection of pictures of ugly political scientists.  To see who's on the board, you'll have to come to my office in Alaska now, but I will note that it's easy to find pictures of poorly dressed academics.

One of the scholars who I longed to get a picture of to post was Ron Inglehart, who is sort of a famous scholar of economic development and culture (famous in the nerdy world of Poli. Sci., at least).  Although Inglehart is not himself particularly ugly, he does have a reputation for having an enormous head.   That is not to say that he is arrogant, just that the size of his head is quite large, physically.  Fun fact.  More importantly, he also has not-particularly-impressive, Amish-like facial hair.  Truthfully, I would place my moustache in the top .1% of Political Science facial hair.  Not that that's saying much.

Inglehart has made a career out of publishing a series of books and a long list of articles that argue that economic development and values are intrinsically linked--that particular types of social values tend to produce economic growth, but also, economic development (or rather, the stages of economic development) tend to produce different types of economic growth and types of economic activity more generally.

Basically, there are three types of values that favor particular types of economic activity.  These are called "traditional" values, "materialist" values, and "post-materialist" values.  One way of thinking about traditional values is that they are inherently risk-averse and conservative.  People who hold these types of values tend to resist change and innovation, because they fear the risks that come with it.

When societies have traditional values in abundance, they tend to be poor and stay poor (so goes Inglehart's argument).  Once they start to develop values that encourage risk-taking and the accumulation of wealth, that's when they start to develop.  Inglehart would argue that the Latin American countries have these types of values--materialist values--in abundance these days, and so do India and China, and that is one of the reasons why the economies of these places are growing so fast.

Once countries develop to a certain point, they start to experience diminishing returns from economic development and wealth, and at that point, people start to develop post-materialist values, where they are worried more about quality of life, and less about income.  Maybe Boulder, Colorado, and Denmark are places where post-materialist values are particularly common.

Anyways, it strikes me as relevant that places that I would consider likely settings for a lot of materialist values--places like Lima, La Paz, Santiago, and now Kampala, are places where people really make an effort to dress up.  It's hard to believe how many guys wear jackets and ties here!  While other places that are more developed--Europe, the US, Canada--are often very fashionable, but the fashion is much less formal.  For example, in the US, cell phone salesmen wear polo shirts, while they often wear three-piece suits in Latin America, and there are hardly any t-shirts visible on the street here.  Is dress an outward sign of materialism?  I don't mean this in a pejorative way--Lord only knows that they need some material things here!

I'm not aware of any economists that take Inglehart's account of economic development seriously, so all this needs to be taken with a grain of salt, but perhaps it is a good sign for Uganda's economic development that people dress so nicely?  And perhaps there is a way to forecast economic growth based on ties and jackets?  Conversely, perhaps Alaska is headed for the economic trash heap, as we are evidently the US' largest fashion emergency.

All of that said, I miss my Xtra Tufs.

Traffic and Coordination Games

When I teach my students about collective action--cooperation--I teach about two basic types of problem, one which is easy and which is hard.  For you political scientists out there, you know these real well:

The hard one is the so-called "prisoners' dilemma," in which two individuals both have an incentive to cheat one another rather than cooperating, because they'll both be better off, no matter what the other person does.  I won't belabor this, because there are a million places you can look up "prisoners' dilemma" if you're not familiar with it, including, I'm sure, wikipedia.

But the other kind of problem is a simpler coordination problem sometimes called "the battle of the sexes," in which cooperation is always better than cheating, because cooperation always brings about better results.  The story:

A man and a woman go on a date.  She wants to see Must Love Dogs, and he wants to see Grosse Pointe Blank.  OK, bad example, because Grosse Pointe Blank is a romantic comedy about professional killers, and it has Dan Aykroyd.  So everybody wins.  But still.

If they split up, date's off, which sucks.  And even though the guy gets more pleasure out of seeing professional killers and the gal gets more pleasure out of seeing the chick flick, they can relatively easily decide on one of the other, because they'd both rather go on a date together than be losers and go to separate movies.

Obviously, this is a stylized explanation of a (common) problem.  But another example that I often use of the same kind of problem is having people in a country decide what side of the road to drive on.  If they all pick the same side, they're good.  If they pick different sides, they have accidents, and maybe die.  So the Brits and their colonies (like Uganda) drive on the left, and everybody drives on the right.  And it works great.

Except you don't have to spend too long in places like Uganda to realize that it isn't such a simple coordination game, because in Uganda, the side of the road they really drive on is the wherever-they-damn-please side.  Everybody would be better off if everybody could stick to their lane and drive on the correct (left) side of the road, but people drive on the left, right, the median, the sidewalk, whatever.  The only place they don't drive is through the enormous potholes that are deep enough to swallow 18-wheelers hauling doubles.  

I don't know if there's a point to this.  Just that the example I usually use to illustrate this dynamic is wrong.  Which sort of suggests that even simple acts of cooperation and collective action are often pretty difficult, contrary to our expectations.

Research in Uganda

I am currently in Kampala, Uganda, for about a two month stint which will include some fieldwork, some office time, and some coursework.  I am primarily here as part of a research project I'm working on with my dissertation advisor back at CU as well as an ever-increasing number of scholars from an ever-increasing number of institutions.  These, at present, include UAS, CU, UCONN, U. Michigan, Indiana U., IIASA in Austria, and research institutes in Poland, Bolivia, and Uganda.  Here, in Kampala, I'm working with a group of foresters, environmental scientists, and geographers at Makarere University.

The research project itself is an investigation of (among other things) the conditions under which institutions (that is, for you non-Ostromites, rules, norms, and patterns of behavior) emerge that can permit effective resource management.  Of course, the resource we're focusing on is forests, but we hope our findings will be applicable to a range of other types of resources.  In particular, we're interested to see if (a) communities with greater diversity have a harder time managing resources, (b) if communities with greater inequality have a harder time managing resources, and (c) if communities with greater familiarity with forests will have an easier time managing resources.

There is also another major component of the project, which is (d) if payments for ecosystem services will tend to promote forest conservation, or if they won't make any difference.  This last one deserves a little bit of explanation:

Basically, the UN and other international organizations, as well as some governments (Costa Rica comes to mind) have taken up this idea that if people who own or control forests are paid for the benefits that those forests provide (by doing things like cleaning water and taking carbon dioxide out of the atmosphere), there will be more of an incentive for people to conserve forests. Sounds like a simple idea that is likely to work, but the devil is in the details.  One argument is that unless payments are very large, they are unlikely to motivate people to conserve for economic reasons alone, and there's a concern that when you start to pay people, other motivations (like love of the outdoors and altruism) might get pushed into the background.  So if payments aren't big enough, or if they start big and then go away, and if they encourage people to stop thinking about how much they love nature, then plans like this could really hurt over the long run.

Our research plan has a number of components, but we basically have two big things that we're doing.  The first is that we're using behavioral experiments to test peoples' behavior in a hypothetical environment in which they receive payments for conserving forests.

We're also using survey data to try to link these abstract experiments--basically games rural Ugandans and Bolivians will play--to reality on the ground, although there are some things that we can only do in the experiments, or (conversely) we can only do with survey data.

Blogging Again?

So, I haven't been blogging in quite a while.  It really has been since my fieldwork (in 2009) that I last blogged consistently.  Somehow seems like, between facebook and twitter and between the pressures of day to day life (and to top it all off, the fact that I seem to have much less to say that I think is interesting), it sort of went by the wayside.

So I'm going to give this a stab here, and perhaps I'll stick to it.

If you're reading this on facebook, by the way (the blog and facebook are linked), you can get to the actual blog at http://moustachewax.blogspot.com.  Note that moustache has an o.  As I always write, a "mustache" is what Hitler had.  A "moustache" is what Mexican Revolutionary Emiliano Zapata had.  And of course, a "moustachio" is what Victor Emmanuel, King of Italy had.  That dude had some badass facial hair.

If I post any pictures on the blog, it may not be possible to see them on facebook...