Emigrants Transform Institutions - For the Better

The potential negative impact of immigrants on American political and economic institutions is the best argument against liberalized immigration and the economic, social, national security, and criminal objections are not convincing.  Michael Clemens and Lant Pritchett dig into this argument, which they call the “Epidemiological Case for efficient migration restrictions,” and find it mostly wanting (their paper is the best I’ve read in a long while).  I’ve co-written an academic journal article, Cato policy paper, and other work about how immigration could affect institutions.  There is more evidence that immigration improves institutions than that it worsens them although there is still much work to be done on this issue and questions remain.

But there is evidence that emigration improves a source country’s institutions.  Fredrik Segerfeldt summarizes some of the evidence in his new book for the Adam Smith Institute in the UK.  In Chapter 6 of his book, Segerfeldt observes:

Mexican migrants play an important role in shaping political atti­tudes in the country, both through social remittances and after returning home. Political participation increases, democratic com­petition intensifies, it becomes more difficult for leading members of the party in power to enrich themselves and the chance that the rul­ing coalition will retain power decreases. In short, Mexico’s exodus makes it more democratic.

Although much of the research above deals with Mexico, there are other results indicating that emigration can strengthen democracy. In a macro study of a large number of poor countries, economists find that emigration increases both democracy and economic freedom in the sending country.

How does emigration improve Mexican economic and political institutions?  By breaking up cronyist and interventionist political arrangements:

Emigration can also help to break up or at least weaken governance based on patronage. In such countries voters tend to vote for the rul­ing party, because otherwise they risk losing the benefits that the power distributes. Entire communities will be dependent on the rul­ing party, which impairs democracy. But when people in a commu­nity receive income that is not from the state or the ruling party, citi­zens become more independent and can therefore vote for the oppo­sition if they want to. In Mexico, remittances reduce the support for the PRI, the party which, with the help of patron-client methods, managed to retain control of the country during most of the 20th cen­tury (between 1929 and 2000).

Migration and remittances may also be a way to break up old hierar­chies based on class and ethnicity. In San Pedro Pinula in Guatemala, for example, residents of the Mayan people, with the help of both returning migrants and remittances, have slowly but surely been able to challenge the ethnic underclass role they had for five centu­ries. In the oases of southern Morocco, the Haratin, poor black, land­less workers, have enhanced their status thanks to remittances from abroad.

Segerfeldt’s summary of that research can help explain the important finding by Joshua C. Hall that the ability to emigrate is correlated with improvements in source country economic freedom: 

Exitability, a variable created by Brown (2014) to capture how easy it is for citizens to “vote with their feet” is related to the change in economic freedom from 1980 to 2010 in a statistically significant manner across all specifications. This provides some indirect evidence to the importance of “exit” versus “voice” with respect to the question of institutional reform.

Emigration benefits governance in sending countries, increasing the returns from liberalized immigration policies in the developed world.  This is an exciting time to be working on how immigrants affect economic and political institutions.   

Pentagon Bureaucracy

Many articles in recent years have expressed concern about Pentagon bloat. Mackenzie Eaglen called for streamlining the Pentagon’s “army of bureaucrats.” Ray Mabus said “Twenty percent of the Pentagon budget, one dollar out of five, is spent on … the Office of the Secretary of Defense and the defense agencies … Pure overhead.”

Robert Gates said the Pentagon is a “gargantuan, labyrinthine bureaucracy,” where 40 percent of spending goes to overhead, and there are 30 layers of staff under the secretary. Fareed Zakaria called the Pentagon “some kind of gigantic socialist enterprise.”

My favorite bureaucracy story is the recent one about the admiral in charge of navy intelligence who has not been allowed to see any secret intelligence for two years. That is pretty absurd, even for a socialist enterprise.

One measure of Department of Defense (DoD) bureaucracy is the number of civilian (non-uniformed) employees, as shown in Chart 1. (Data from the new federal budget and prior ones).

The number of DoD civilians soared from 659,000 in 2007 to 771,000 in 2011, but then declined to 738,000 by 2016. The peak and fall generally followed the peak and fall in the numbers of uniformed service members over those years.

However, Chart 2 shows that there has been an upward trend in the ratio of DoD civilians to uniformed. In President Obama’s first year of 2009, there were 703,000 civilians and 1.54 million uniformed, for a ratio of 0.46. In 2016 there were 738,000 civilians and 1.34 million uniformed, for a ratio of 0.55.

The relative increase in the civilian bureaucracy is a concern. One might think that Pentagon productivity would have increased because of advances in technology. Shouldn’t procurement be more efficient these days, as we’ve moved from paper forms to electronic databases? Apparently, such gains from technology have been dissipated elsewhere. John Lehman says: “With so many layers and offices needed to concur on every decision, it now takes an average of 22½ years from the start of a weapons program to first deployment, instead of the four years it took to deploy the Minuteman ICBM and Polaris submarine missile system in the Cold War era.”

Aside from wasted cost, the more bureaucratic bloat there is, the more it saps the energies of our uniformed service members. John Lehman estimates that “roughly half of all uniformed personnel serve on staffs that spend most of their time going to meetings and responding to tasks from the hundreds of offices that have grown like mold throughout the vast Defense Department.” The fault, of course, lies not with the service members, but with the complex and top-heavy system that Congress and Pentagon leaders have built over the decades.

Decline in U.S. Greenhouse Gas Emissions Overestimated by More Than a Third

Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

First China. Now the U.S.

It was big news last November when it was revealed that China had been under-reporting its coal consumption by nearly 20 percent. The big implication was that China’s greenhouse gas emissions were also much larger than being reported, complicating the (then) upcoming U.N. climate negotiations in Paris.

Now comes evidence that the U.S. has been underreporting its methane emissions—a potent greenhouse gas—by some 50 percent or more.  And what’s worse, is that over the past decade or so, instead of methane emissions having declined by about 10 percent as reported by the EPA, they have in fact grown by more than a whopping 30 percent. Not only would this information also have (had it been available) complicated the U.N. Paris talks, but it would have taken a lot of the shine off the U.S. emissions reduction efforts that President Obama was touting at the conference last December.

The new evidence is presented in a just-published paper in the scientific journal Geophysical Research Letters by a team led by Harvard PhD candidate Alexander Turner. Turner and colleagues examined several measures of methane emissions occurring in the U.S. (including in situ measurements and remote satellite observations) and concluded that EPA estimates were way off. They wrote:

National inventory estimates from the US Environmental Protection Agency (EPA) indicate no significant trend in US anthropogenic methane emissions from 2002 to present. Here we use satellite retrievals and surface observations of atmospheric methane to suggest that US methane emissions have increased by more than 30% over the 2002-2014 period… This large increase in US methane emissions could account for 30-60% of the global growth of atmospheric methane seen in the past decade.

The implications are huge—at least when it comes to our advertised role as a supposed leader in climate change mitigation efforts.

Bernie Wins and Super PACs Continue to #FeeltheBern

The Seattle Times reports that more super PAC money has been spent in express support of Sen. Bernie Sanders than for either of his Democratic rivals, including Hillary Clinton. For the record, Sanders would happily abolish super PACs by working to overturn one of the two major court rulings that gave rise to the super PAC:

Of course, that’s not quite how it works, but you get the idea. A President Sanders would do his level best to make sure that he becomes the last candidate to receive the benefits of supportive speech facilitated by the super PACs.

The fight for free political speech is a regular topic on the Cato Daily Podcast (subscribe!: iTunes / Google Play / CatoAudio). I recently spoke with Paul Sherman of the Institute for Justice about Bernie’s massive support from super PACs and common misconceptions about how the groups actually function.

 

Protectionism Wins in New Hampshire

Last night, Bernie Sanders and Donald Trump won their respective parties’ presidential primary elections in New Hampshire.  There’s a lot that can be and has been said about this outcome and what it means for American politics.  One interesting thing I’d like to point out is that these candidates are by far the two most protectionist candidates running for either party’s nomination, and they are the only candidates that have made opposition to free trade a part of their campaign’s message.

The conventional wisdom is that good trade policy fares poorly during election season.  Foreign trade is an easy scapegoat for complex economic problems, and restricting trade is a simple “solution.”  It’s no surprise that the two most populist candidates are also the ones trumpeting an anti-trade message.

At the same time, however, trade is rarely ever an issue that animates voters.  Regardless of their preferences on trade policy, other issues almost always take precedence in voters’ minds when they go to the polls.  It’s endlessly frustrating to free traders that, even though it doesn’t help politicians get elected, they consistently promote harmful myths about international trade during their campaigns.

I’m not sure that was the case in New Hampshire.  During last night’s news coverage, I watched a reporter from one of the cable news networks interview voters.  When asked why they supported Donald Trump, one couple said their biggest concern was that jobs were going to Mexico.

I suspect we’ll hear more anti-trade rhetoric from both Trump and Sanders in the coming weeks as they try to differentiate themselves from their competition and cash in on nativist sentiments.  We’ll have to wait and see if it drives the other candidates toward more illiberal trade policy positions as well, or if it gives them cover to stake out more moderate positions.

Supreme Court Stops Obama’s Latest Power Grab

Last night, while everyone was focused on New Hampshire, the Supreme Court issued an order that is likely to end up being more consequential than the primary victories of Donald Trump and Bernie Sanders: By a vote of 5-4, it stayed the implementation of the so-called Clean Power Plan. A group of states led by West Virginia challenged the regulation, and eventually sought a stay from the high court pending resolution of that lawsuit in the lower courts. 

As I described in a recent op-ed:

In June 2014, the Environmental Protection Agency proposed a new rule for regulating power-plant emissions. Despite significant criticism, on August 3, 2015, it announced a final rule. It gives states until 2018 — it “encourages” September 2016 — to develop final plans to reduce carbon dioxide emissions, with mandatory compliance beginning in 2022. EPA cites Section 111 of the Clean Air Act as justification for the Clean Power Plan, but that section can’t give the agency such authority. Section 111(d) doesn’t permit the government to require states to regulate pollutants from existing sources when those pollutants are already being regulated under Section 112, as those deriving from coal-fired plants are.

The Supreme Court’s stay is a welcome development. The regulations constitute an unprecedented assertion of agency authority, so the Court had to step in to prevent irrevocable harm to the energy sector. As we saw last term in Michigan v. EPA, often it’s too late to fix administrative abuses judicially after the fact. Lawlessness must be nipped in the bud.

And this move may have foreshadowed the death knell of the Clean Power Plan altogether; the only question is whether the justices will have a chance to strike it down for good before the next president reverses it.

For more commentary, see Jonathan Adler.

In Africa, Institutions Matter More than Infrastructure

Washington Post article recently highlighted the impressive but uneven progress that Africa has made in its struggle against poverty. The article looked at questions pertaining to material wellbeing, including “the number of times that an average family had to go without basic necessities.” On that measure, Cape Verde saw the most rapid improvement. And so the article asks, “What did Cape Verde do right?” 

Cape Verde’s superior infrastructure, the Washington Post explains, is partly responsible for that country’s economic progress. Surely that cannot be the full answer. The United States did not have an interstate road network till the Eisenhower Administration – decades after the United States became the richest and most powerful country in the world. Similarly, Germany was the most powerful and richest country in Europe a long time before constructing its famous autobahns. 
  
In fact, it is Cape Verde’s policies and institutions that we should look to as reasons for that country’s superior performance relative to, say, Liberia, where poverty increased the most – according to the Washington Post. According to the Center for Systemic Peace, Cape Verde is a democracy. Liberia, in contrast, is far behind.