Shomron Center for Economic Policy Research

In Search for an efficient Institutions

July 27, 2023
by Moshe
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Long shadow of historical events

The failed socialist ideology is reemerging, finding resonance among “caring” social bureaucrats (Friedman, 1994) coalescing with power-hungry Left politicians. This resurgence is evident in the implementation of new, burdensome regulations and a significant decline in the quality of private property protection (evidently manifested in measures like Proposition 47, which effectively prevents the prosecution of thefts below $950 in California, the growing burden of ecological end “anti-discrimination” legislation). As socialism gains ground, the world becomes increasingly inhospitable to independent private businesses.
In the face of this trend, one might wonder if it is still possible to find a business-friendly environment. Studying local rules and rulers (institutions and policies respectively), can shed light on the situation and provide factual data for making informed choices.
Understanding the local institutions and policies can help entrepreneurs make informed decisions, seeking places where they can operate with greater autonomy, protection of property rights, and tolerable business environments.

Institutions matter as well as the historical background thereof

National and regional differences are often deeply rooted in history. Major historic events and phenomena can have very long shadows so sometimes differences they made last for centuries. It is true for Northern America and some other countries (European colonists’ mortality rate as a measure of adaptability of European traditions/institutions in the Western offshoots – Acemoglu, Johnson, Robinson, 2001). It is true for Austria (Ochsner. Roesel, 2017). It is true for Romania (Mendelski, Libman, 2014). It is true for Russia (see Mau, Yanovskiy, 2002 and more our relevant papers on regional studies). These differences could be of incomparably higher significance than famous legal origin and differences between common law and civil law in established democracies (La Porta, Lopez-de-Silanes, Shleifer, 2008). That is why analysis of institutions shaping actors’ (households, firms, elected and unelected governmental officials) incentives should be built on the basis of relevant studies of Economic and Political History.
So, our methodology (Yanovskiy, Ginker, 2017; Yanovskiy, Shulgin, 2013) exploits a range of indicators from the past (like elections and court statistics in 1990-ties – early 2000-ties in Russia) and currently observable (visible manifestations of independent civil activities in the same regions of Russia, to say nothing on other post-socialist countries). These insights can be particularly useful when standard tools like election outcomes are marred by widespread falsifications and even public opinion polls are compromised by fear.
This methodology holds even greater promise for countries and territories where elections are conducted more or less honestly, where the media market is more or less competitive, and where there are minimal Habeas Corpus-type protections against arbitrary arrests.

In contemporary times, even reputable experts evaluating institutional qualities, especially economic freedom, often overlook widespread government assaults on freedom of contract under the pretext of “anti-discrimination” or “positive” discrimination. Few economists nowadays distinguish between truly immoral and illegal governmental discrimination and private discrimination (Block, 2010; Sowell, 2019)—both of which infringe upon personal freedoms (“to make it apply to every act of discrimination which a person may see fit to make as to the guests he will entertain, or as to the people he will take into his coach or cab or car, or admit to his concert or theatre, or deal with in other matters of intercourse or business.” – Civil Rights Cases, 109 U.S. 3 (1883)), freedom of contract, etc. By learning important lessons from modern history, we aim to stay alert to significant developments in this crucial realm of regulations.

Considering the lasting consequences of significant historical events can help businesses make more informed choices when selecting a location for establishment and operation. Our expertise lies in guiding you to avoid excessive risks and ensuring a smoother journey for your enterprise.

Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation.” American Economic Review, 91 (5): 1369-1401. https://doi.org/10.1257/aer.91.5.1369
Block Walter. (2010). The Case for Discrimination. Auburn, Alabama. Ludwig von Mises Institute. https://mises.org/library/case-discrimination

Friedman Milton. (1994). Cooperation Between Capital-Rich and Labor-Rich Countries. http://fff.org/explore-freedom/article/cooperation-capitalrich-laborrich-countries-part-1/ “By now everybody agrees with two propositions. Proposition one: “Socialism is a failure”. Proposition two: “Capitalism is a success”. To judge from what goes on in Washington, the conclusion that has been drawn is: “Therefore, the U.S. needs more socialism”.
La Porta R., Lopez-de-Silanes F., Shleifer A. The Economic Consequences of Legal Origins. Journal of Economic Literature. 2008. Vol. 46. No. 2. P. 285–332. https://doi.org/10.1257/jel.46.2.285
Mau V., Yanovskiy K. (2002) «Political and Legal Factors of Economic Growth in Russian Regions” “Post-Communist Studies”, Vol.14, No. 3, 2002; https://doi.org/10.1080/1463137022000013403
Mendelski, M., Libman, A. Demand for litigation in the absence of traditions of rule of law: an example of Ottoman and Habsburg legacies in Romania. Const Polit Econ 25, 177–206 (2014). https://doi.org/10.1007/s10602-014-9158-y
Mises Ludwig von. (1949). Human Action: A Treatise on Economics. Edition: Auburn, Alabama, Ludwig von Mises Institute, 1998 has been used for citation, 1st published by Yale University Press, 1949.
Ochsner Christian, Roesel Felix. (2017). Activated History. The Case of the Turkish Sieges of Vienna. CESifo Working Paper Series No. 6586. https://dx.doi.org/10.2139/ssrn.3023816
Sowell Thomas. (2019). Discrimination and Disparities. NY: Basic Books.
Yanovskiy Moshe, Ginker Tim. (2017). A Proposal for a More Objective Measure of De Facto Constitutional Constraints” Journal of Constitutional Political Economy, Volume 28, Issue 4, December 2017 pp. 311-320 https://doi.org/10.1007/s10602-017-9242-1
Yanovskiy K., Shulgin S., (2013) “Institutions, Democracy and Growth in the very Long Run” Acta Oeconomica, Volume 63 Issue 4 2013 pp. 493-510 https://doi.org/10.1556/AOecon.63.2013.4.5. https://www.jstor.org/stable/24857649

June 25, 2023
by Moshe
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The military capacity of Ukraine in the Long Run. Scenarios and Factors

The article ‘Probability of Development of Nuclear Weapons by Ukraine. Scenarios and Factors‘ have been published by ‘Obrana a Strategie’ (Defence and Strategy) – Czech Military Journal (Volume 23 Number 1 – June 2023).

The threat of the use of nuclear weapons by the aggressor is a significant factor in the ongoing war. Also in future, the Ukrainian government (any leadership) will be interested in its own nuclear weapons at least as long as Russia is ruled by an ill-predictable authoritarian regime. Nuclear arms could be helpful for Ukraine both for deterrence and to increase the attractiveness of the country as a military ally. However, due to many economic, political, and legal factors discussed in the paper, the likelihood of development of Ukraine’s own nuclear arsenal should be considered as extremely low. The unlikely scenario, in which Ukraine could nevertheless develop such weapons, would require such a significant improvement of political and economic institutions, that the risk for third countries from the new nuclear actor will remain minimal.

The paper is available also at Academia.edu, ResearchGate, and SSRN.

June 18, 2023
by Moshe
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Lessons from Iosif Rapoport’s life

Article by Yehoshua Socol and Moshe Yanovskiy ‘Geneticist Iosif Rapoport: the Scientist vs. the State‘ just has been published in the Journal of American Physicians and Surgeons (JPandS) Volume 28 No 2, (Summer) 2023.

The purpose of the review was to analyze the life and contribution to the science of Iosif Rapoport (1912-1990) in light of the relationship between science and power, science and society. Through the dramatic twists and turns in the history of genetics in the USSR, Rapoport and his colleagues—some of whom paid with their lives for their commitment to the truth—worked for a long time under extreme conditions. Rapoport’s story also mercilessly reminds of the responsibility of many scientists, who have learned to build and exploit special relationships with authorities—but have ceased to be scientists. Rapoport was not merely an outstanding scientist nominated for the Nobel Prize, contributing to science despite very unfavorable conditions. Throughout his entire life, he demonstrated outstanding courage, both military and civil. Due to the latter, by the way, he was not awarded the Prize. While everyone should try to follow his way, an ordinary person will hardly replicate his behavior. Society cannot rely on the personal heroism of a few; it should strengthen rules and institutions that preserve the culture of scientific discussion.

March 20, 2023
by Moshe
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Biden and Israel Judiciary Reform

One old guy failed to win elections honestly (so he needs voting w/o ID, postal voting, and more – see H.R.1 ). He disrespects his country’s constitution, he disrespects his Supreme court and he is searching for ways to bypass SCOTUS’ verdicts, he heavily invests in a new project to organize terrorists’ Army against Israel (at US taxpayers’ cost, of course). At the same time, he is eager to intervene in Israel Judiciary’s reform.
Is it just a case of “hutzpa”?

February 24, 2023
by Moshe
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We are the champions… and this is the reason for the shame

When one narcissist – third-rate official of the Biden administration steals females’ luggage in order to parade in stolen woman’s outfit in front of the Media and at official receptions, this dude gets fired from the super-tolerant administration which was proud of him and he becomes the subject of conservatives’ mockery.[1]

When the bunch of provincial-level lawyers stole the power which not belong to them (see for more details books penned by Simcha Rotman and our, just a published book, both in Hebrew), when they were humiliating the very idea of the rule of law and Justice, more specifically: they claimed that self-incrimination extorted by torture is a legitimate way of investigation[2]; they call deregulation “unfair competition”[3], they numerous times prevented infliction of damage to terrorists and more … all these facts mean that this bunch of people had stolen their judge’s gowns and even very name of the Court, they stole very name of “Justice” and despite all these easily checkable facts, there are many thousand (not hundred thousand but still many) idiots who are ready to destroy their reputations, to cut off their connections to their friends and colleagues not in order to save the thieves from their well-deserved punishment but in order to prevent a return of just a piece of the stolen stuff.

Yes, we are the champions and this is the reason for us, to be ashamed.

[1] https://www.youtube.com/watch?v=vb0z4WpHBc8

[2] תפ”ח 16-01-932 מדינת ישראל נ’ בן אוליאל(עציר) ואח’

The verdict is available here and here (in Hebrew only).

Attorney Yitzhak Bam, for the defendant, said, “After the court accepted the confession and reenactment made following my client’s torture, the conviction was simply a matter of judicial acrobatics.”  https://www.israelhayom.com/2020/05/18/duma-arsonist-convicted-of-3-counts-of-murder/     …  Once the court overcame the acrobatic task, it opened our path to appeal to the Supreme Court for the very acceptance of a confession given under torture.”    “The only point of light in the verdict is the court’s reluctance to convict Ben Uliel of membership in a terrorist organization,” Bam said. https://www.jewishpress.com/news/israel/religious-secular-in-israel-israel/court-jumps-through-hoops-to-convict-amiram-ben-uliel-of-duma-village-arson-murder/2020/05/18/

[3] Supreme Court cases ## 1030/99; 1031/99; 1050/99; 1053/99; 1201/99; 1119/99, see the verdict: https://bit.ly/3XVvwRb  (Hebrew).

February 6, 2023
by Moshe
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Jewish Analysis of the COVID-19 Crisis

The article by Yehoshua Socol, Moshe Yanovskiy, and Yair Shaki “Judeo-Christian Analysis of the COVID-19 Crisis and Its Management” has been published in the University of Valladolid Journal of the Sociology and Theory of Religion last month. (to cite: Socol, Yehoshua, Yanovskiy Moshe & Shaki Yair Y. 2023. “Judeo-Christian Analysis of the COVID-19 Crisis and Its Management”, Journal of the Sociology and Theory of Religion, 15 (2023): 131-154).

The present coronavirus crisis caused major worldwide disruption. Numerous experts admit now that crisis management was far from optimal from the very beginning. In the paper, we first digest the available information on the crisis and its management. We then list factors that led to the chosen way of crisis management. Afterward, we question whether religious leaders could have gained enough information for them not to have supported lockdowns, etc. back in March 2020. In our opinion, they could have if they would have addressed trustworthy experts with a list of reasonable professional questions. We then analyze the question if hypothetical coercive measures are justified in the case when they are effective in decreasing the overall mortality but cause the death of several people. Our conclusion is that such measures are not justified ethically, and implementing emergency powers is justified only in the case of war. Finally, we formulate several important problems highlighted by COVID-19 to be discussed in the future.

The reader is highly recommended to compare this paper to the prominent libertarian Scholar Walter Block article “A Libertarian Analysis of the COVID-19 Pandemic” penned and published in 2020 on a way how to approach the intellectual challenge of the pandemic and how to assess the Government’s response.

Few of our papers relevant to the issue of assessment of Government response to the virus pandemic:

(1) COVID-19 Library. Filling the Gaps
(2) Are lockdowns effective in managing pandemics? (journal Int. J. Environ. Research & Public Health
(3) supplemental to (1) Coercive Policies and Some Reactions to the Coercion in the Time of COVID-19 Pandemic

January 29, 2023
by Moshe
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The Ethical and Religious Implications of Covid-19

Dr. Marilyn M. Singleton (US Doctor and Lawyer) interview with my colleague and co-author Dr. Yehoshua Socol: “… As my guest put it, the mindset behind the Covid-19 response will lead to “government expansion, ultimately ending in the establishment of full control and ‘one payer’ financing of medical services, is turning doctors to be de facto parts of a bureaucratic machinery.”

January 22, 2023
by Moshe
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The welfare state – for whom?

Who is the principal beneficiary of the welfare state? This issue was discussed during the dispute hosted by “Students for Liberty” an international non-profit organization on January 11 at Ben Gurion University (in Hebrew).

Here is the introductory speech by Ilia Zatcovetsky who asserted, that the real (principal) beneficiaries of the Welfare state are social bureaucrats and allied politicians.

For a detailed explanation of this assertion (in Hebrew) see our book Socializm Haziri (Pig Socialism) just published by Kineret Zmora-Bitan Dvir Publishers.

November 15, 2022
by Moshe
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“Socializm Haziri” – Pig Socializm

“Socializm Haziri” – Pig Socialism – the book written by Ilia Zatcovetsky and Moshe yanovskiy just starts to make its way to the reader. Kineret Zmora-Bitan Dvir Publishers have published the book.

This book represents our endeavor to challenge the ‘Living Dead’ of Socialism from a fresh and significant standpoint. Many talented authors have sought to demonstrate the merits of a free-market economy using ‘universal’ models, cases, and arguments not tied to specific historical periods or countries. However, we firmly believe that historical context and political and legal institutions are of great importance and cannot be overlooked.
As early as 1994, Milton Friedman identified the ‘illogical’ resurgence of Dead Socialism: “What happened in Europe with the collapse of the Berlin Wall? By now, everyone agrees with two propositions: Proposition one – ‘Socialism is a failure.’ Proposition two – ‘Capitalism is a success.’ To judge from what goes on in Washington, the conclusion that has been drawn is: “Therefore, the U.S. needs more socialism.”
Our book sheds light on the well-known incentives of left-leaning politicians (advocates of ‘Big Government’ providing comprehensive care from cradle to grave) and welfare state’s bureaucrats within the realms of Economics and History. Why do they persistently advocate for higher taxation, stringent regulations (often presented as ‘anti-discriminatory’ or ‘ecological’), and more?
Ultimately, our book illustrates how the Welfare state tends to evolve into full-fledged socialism and elucidates why even ‘light socialism’ is exceedingly perilous from a long-term perspective. The book is grounded in data and numerous case studies drawn from Israel and the historical and contemporary experiences of old democracies.

Full references with clickable links and some supplemental materials the reader can be found in the

סוציאליזם חזירי. נספחים Pig Socialism. Supplemental Materials

September 28, 2022
by Moshe
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Italy: noteworthy post-pandemic Elections

General Elections on September 25, 2022, bring to power a conservative coalition led by Giorgia Meloni (Brothers of Italy). After 99% of votes counted, the coalition has already secured at least 235 seats out of 400 in the Chamber of Deputies and leads in the battle for the Senate (112 of 189; the general number of senators is 205).

Brothers of Italy (Fratelli d’Italia – FI) was the only political party represented in the previous Parliament that decisively challenged COVID-19 mandates as a threat to personal rights and liberties.
Nicholas Farrell, historian, and journalist had speculated about the probability of FI victory more than a year ago (August 3, 2021): “How remarkable, then, that such a quintessential conservative Englishman as Sir Roger Scruton should have been so powerful a cleansing influence on Italy’s post-fascists and inspired their young leader – who could well become Italy’s next premier – to transform their small, big state, big brother post-fascist party into a vote-winning patriotic, conservative party founded on the sacred principle of individual liberty.” “Why are only Italy’s ‘far right’ opposing vaccine passports?”
By the date (September 28, 2022) Italian voters had manifested the highest demand for their rights and liberties protection, delivering the highest reward to the party, leading the anti-mandates movement. Look for a comparison to the other cases of elections influenced by COVID-19 mandates agenda: “Coercive Policies and Some Reactions to the Coercion in the Time of COVID-19 Pandemic“