Shomron Center for Economic Policy Research

Here is our mini-library (collection of references), filling some gaps in the current discussion of the COVID-19 crisis.

“Intellectually, the greatest benefit I derived from the experience [of working in the office of President Ronald Reagan] was to be able to observe at close range how political decisions are made at the highest level. … I thought that high politics resulted from a careful, inductive process by virtue of which all the information available to the government is conveyed upwards and there subjected to judicious analysis, with all the pros and cons weighed until a decision is reached…. Reality turned out to be quite different.”

Richard Pipes, Ronald Reagan’s adviser

“Vixi: Memoirs of a Non-Belonger”. New Haven: Yale University Press, 2003, p. 208

The presented material contains numerous references to articles, papers, data, and books relevant to the current discussions around COVID-19 medical and political responses to the pandemic.  The principal purposes of this collection of references are:

1. To fill (at least, partly) considerable gaps in current discussions on COVID-19, often based on never proven assumptions, like the feasibility of stopping a respiratory infection by means of lockdowns.
2. To present and highlight some crucially important factors that had been discussed in the scientific literature for decades, but totally ignored by most governments in their decision-making – for example, the very strong dependence of healthcare progress on economic progress, and the very strong dependence on both economics and healthcare on safeguarding personal rights and property.

We find an astonishingly strong leaning of politicians and public healthcare officials to never-tested responses, potentially more dangerous than the disease itself. In our opinion, the special interests of decision-making groups may provide a partial explanation of this phenomenon.

We will greatly appreciate our readers’ criticism.

Our paper “Universal Suffrage: The Century of Corrupting Incentives?” has been published (at long last) at Volume 14 of the New Perspectives on Political Economy (now on-line) – see pp. 63-89.

The paper could be downloaded from the SSRN web site also (separately from the whole NPPE Volume).

Conflict of interest of welfare dependent voter creates wrong incentives. These incentives inherent to universal suffrage, yield consequences, as predicted by John Adams back in the 18-th century. Historically the rise of the modern welfare state might be traced to the emergence of mainstream left parties, which promoted government care “from the cradle to the grave”. This paper will address the damages to Democracy caused by conflict of interest, which led to irresponsible leadership and permanent peacetime budget deficit. Historical examples from the 1990s show possible escapes from the trap of universal suffrage.

Here is the updated version of the report, presenting current state of our studies in political economy of the Family institution crisis. The family was targeted (actually, picked for destruction) by totalitarian intellectuals since Plato. Acute need to destroy it was declared in the Communist manifesto 1848 (as the Family and the Private Property institutions are strengthening each other). Modern politicians standing with Big Government and civilian bureaucrats are permanently in search of new opportunities to extend the budgets and discretionary powers. So our principal hypothesis looks quite reasonable, almost “natural”.

Government interventions into the traditional functioning of the family became an important factor in the recent family crisis in developed countries (fewer marriages, more divorces, and lower birth rate). This hypothesis has been tested statistically for the period from 1800 to 2010 with data from 17 established democracies.

We show that mandatory pension insurance might contribute to the reduction in fertility, with a lag of 40 years. Legislation encouraging a high level of female employment and mandating no-fault divorce rules is tested as an additional factor contributing to the divorce rate hike and birth rate fall. In addition, the concept of “the best interests of the child” encourages children to challenge parents’ authority; the latter reduces “demand” for children (and birthrate) even further.

The reason behind this effect is the rise of the welfare state, crowding out male and parental responsibilities.

The paper was originally presented at the Public Choice annual conference (New Orleans, 2012 “The gender role of the government: some explanations of family crisis”).

Political Factors Behind Cuts and Surges in Government Spending:  The Effects on Old Market Democracies and Post-Communist Countries

We tried to explain surges and cuts in governmental spending of Democratic countries by some of the political factors affecting governments’ abilities to balance the budget broadly discussed in the literature. We focus on territorial separatism, minority government, grand coalition, single party government, and the ruling party’s ideology. Special attention is paid to the phenomenon of universal suffrage, which has caused the rise to power of modern left-wing parties and strong special interest groups within the bureaucracy.

Most political factors turn out to be time- and case-sensitive except for universal suffrage. A severe crisis can open the window of opportunity to cut public expenditure, while favorable economic conditions stimulate claims for redistribution and spikes in government spending. The most effective way to curb the instability of public finance is to strengthen pro-reformist political coalitions, claiming defense of national identity and moral values, that encourage austerity and are market-friendly.

The paper has been published by Problems of economic Transition, (Tailor and Francis)  vol. 59, no. 4, 2017, pp. 294-320 2017,  doi: 10.1080/10611991.2017.1321418

Early and unedited version of the article  you could find at SSRN site.

We are currently preparing a few courses based on our researches’ outcomes and data collected for our researches.

Syllabuses, tests and other materials for the courses will be presented at the specialized page at this site.

Currently you could find there two syllabuses:

Introductory course of Economics for non-economists  (Hebrew version  )

and

Political Economy of Defense and Security: priorities, budget, legal framework

For more syllabuses and more study materials visit the above mentioned page.