Shomron Center for Economic Policy Research

In Search for an efficient Institutions

June 27, 2014
by Moshe
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Elections as a choice between terrorists’ gangs

The paper originally presented at Public Choice 2006 conference just updated and uploaded at SSRN: Democracy: a Conflict Extinguisher or a Fuel for Terror?

Cases of Arabian (“Palestine” Autonomy (Israel) and Chechen Republic (Russia). What kind of change one could anticipate as outcome of free elections if voter’s life and property costs almost nothing?  See our paper  at SSRN here.

Implications for Iraq, Egypt, Algeria, majority of Sub-Saharan countries look quite obvious.

It doesn’t means one shouldn’t build Democracy. It means, one should start to build it on the basis of old, well-known and well tested “technologies”, not to invent new and accelerated ones.

April 22, 2014
by Moshe
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The Evolving Priorities of the Israeli Left: From Social Justice to Security and Back

New paper has been uploaded at SSRN site.

The present article traces the dynamics of the priorities chosen by leading leftist parties in Israel vis-à-vis the functions of the state. During the period of the British Mandate they, like all leftist parties, maintained anti-militaristic views. Leaders of the Left more than once accused their rightist opponents of militarism and even fascism. Beginning in 1948, Israel’s Labor Party members become vividly pronounced “pro-defenders.” But during 1977-1982, their views begin to drift toward the original position typical of all leftists: the precedence of social spending and goals rather than defending the country and maintaining the security of its citizens.
A study of the motives for change in the leftist stance supports the hypothesis that the period of leftist “patriotic-defensive” priorities depended on perceiving the state as a party-“corporate” asset of the Left; the state needed to be defended in all ways, including defense from enemies from the without. The loss of leftist leadership in the elections was the undoing of this perception of the state, returning the Israeli Left to the classic leftist stance of “Guns or Butter” in favor of social spending. As historical data bear out, mixed public goods and unlimited opportunity for discretional rule are a priori more attractive for the Left and the majority of bureaucrats than is historically limited spending on the production of “pure public goods.”

Here is few stories and citations, illustrating the path of Israeli Leftist parties priorities’ changes.

Ever since the British Mandate period in Palestine, leftist Zionist Labor leaders have “perceived militaristic militant nationalism of the revisionists as fascist.” (Aronoff 1989, p. 20)    Ben Gurion called revisionists fascist, referred to his rival  Jabotinsky “Il Duce” (Mussolini’s title) and compared him to Hitler…” ibid., p. 20

 In economic terms, they “perceived,” or, more precisely, interpreted as “fascist” the idea that providing pure public goods (defense and security for the people) is a political leader’s highest priority and responsibility.

On December 23, 1954, Jordanian Arabs killed Shoshana Har-Zion and her friend Oded Wagmeister (both aged 18). Their bodies were discovered hidden under some rocks six weeks later. The brother of the murdered young woman, the well-known special ops unit fighter Meir Har-Zion (Unit 101) together with three friends infiltrated the area east of the 1949 truce line without authorization. There they attacked the men of the clan to which, as was supposed, the murderers belonged. They killed four men, returning safely. They were arrested, but thanks to Ben Gurion’s personal interference, they were not even tried in court. Ben Gurion invited Meir Har-Zion to join his party list during the 1965 elections as a candidate for the symbolic 101st slot.
The Sinai War broke out on October 29, 1956. Many of the residents of the village of Kfar Kassem (Qfar Kasim) did not manage to return home in time for the curfew, which had been made especially stringent just a short while previously. 48 violators were shot at a number of different checkpoints. The servicemen held responsible for the bloodshed were tried in court and sentenced (with prison terms ranging from 7 to 17 years). Within a year after beginning to serve their terms, all those sentenced were amnestied by President Yitzhak Ben-Zvi. The authorities had good reason to fear creating an undesirable impression on the army. First and foremost, measures of this kind (similar to the amnesty granted by President Nixon to Lieutenant William Calley) prevented the proliferation of fear among military officers and officers’ refusal to take charge in complex situations.

“You can’t go waving two banners at once, both of defense and of social reform,“ Defense Minister Moshe Dayan was fond of saying in 1971.

On July 6, 1976, in a speech made at the funeral of Yonatan Netanyahu, an outstanding fighter, military commander, and hero of Operation Entebbe, then Defense Minister Shimon Peres said, “This operation necessitated the taking of an enormous risk, but a risk that seemed to be more justifiable than the other one that was involved — the risk of surrender to terrorists and blackmailers, the risk that is inherent in submission and capitulation.”

in July 1982, Peres wrote in support of putting an end to the existence of the PLO: “Our argument with the PLO is not about the past, but rather about the future. I do not foresee any substantive Israeli mandate being given to anyone in its name, to [accept the PLO’s demands of returning to] pre-1967 borders, to divide Jerusalem and to establish a Palestinian state that will attempt to overthrow Israel at one moment, and to take over Jordan the next.” (Lord, 1998).

***

During the last few decades, Israel’s government has been giving up one after the other all the elements of the strategy which had formerly yielded military achievement and established the high reputation enjoyed by the military and the special services of the state. The government avoids tried and proven effective decision making, from large-scale military action to private individual self-defense. This is due partly to that the security agenda has lost its priority status for the special interest and political coalitions (Labor-led leftists) traditionally preserving their control over the executive authority’s bureaucracy, activist court system, police, public media, and education (i.e., a collection of state non-elected means of control).
To clarify the machinery of security agenda deactualization we tested two hypotheses:
1. Labor’s long-term control over parliament and government, state bureaucracy, courts and police, public media and education created an encompassing interest and some incentives for providing pure public goods. The mixed public goods share in government spending surged since Labor Party (the leftist coalition’s) lost its control over parliament and government (while preserving its control over the unelected governmental positions) because the encompassing interest had been broken.
2. The national consensus concerning security collapsed at the time of the First Lebanon War. Labors clearly manifested their resolution to subordinate pure public goods provision to mixed public goods provision. Since that time the Left shifted to the most radical form of opposition to prioritizing pure public goods and even harms their quality. Leftists initiated and pushed the new military justice, causing the threat of punishment for “excessive use of force” etc. instead of victory’s reward. New institutions promoted by leftists, effectively prevent Army from decisive victory targeting

Once tested, both hypotheses should be considered more closely based on the availability of significant data and background facts.

The full text of the paper is acceptable ar SSRN web-site

March 30, 2014
by Moshe
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Selected notes on political economy of Intl Relations: US aid for Israel

We plan to start and promote a series of micro-projects on Political Economy of International Relations: Alliances and Sanctions.

First draft of very first paper already uploaded at SSRN.

Historical data on US aid to Israel illustrates incentives of political leaders and special interests, first and foremost in Israel. As on the early stages of Alliance Israel military capabilities could provide valuable services to USA, undermining USSR influence in the Middle East, the current relations are hard to explain by mutual national interests.
The paper focus on the political actors’ personal incentives, provides explanation for growing exploitation of US Aid by the special interests in Israel, while significance of the aid is approaching to insignificant level and contributes negatively to the country Defense capacity because of political conditionality imposed.
The data presented could support a new vision of US-Israel alliance: ceasing of the US Aid programs for Middle East could contribute both countries Defense needs.

The paper contains short review of factual data, official statistics prepared to show real significance of US Aid at every stage of mutual relations.

We paid special attention on incentives of the political actors’ causing alliances efficiency. We are recommending the reader to pay attention on comparative history of Czechoslovakia and Finland 1939-1940 for better understanding the factors of demand for military ally.

 

 

February 16, 2014
by Moshe
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New Papers for Public Choice Conference 2014

Moshe Yanovskiy and Sergey Zhavoronkov are going to attend coming (march 2014) annual conference of Public Choice Society.

Two papers would be presented March, 9.
Democracy of ‘Taxation-Redistribution’ and Peacetime Budget Deficit

The Limits of Governmental Intervention: Some Ways How Government Belongs in the Bedroom and Nursery

The papers are available at SSRN.com (use the links provided).

February 14, 2014
by Moshe
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Unequal partners: Your marriage is probably making inequality better

Matthew Yglesias –  the “Slate” Magazine’s business and economics correspondent published article headed “Unequal partners. Your marriage is probably making inequality worse“. Sure, Inequality caused by real differences is great thing. As that  the point of liberal (leftist) journalist is?

The Point is  – the greedy rich WASPs are less and less ready to marry poor Cinderella since 1960-ties. The liberal guy quite seriously advises to marry poor. Let marry to redistribute your wealth!

The problem is, as a result of liberal activities to marry poor turned to be more and more risky. One should get risk to lose his savings, house, children as a fee for mistaken choice.

So, our advice is pretty opposite to liberal one: marry, marry unequal (I mean, marry nice, kind, old-fashioned -conservatively minded girls) and read our papers: “The Gender Role of the Government: Some explanation of Family crisis” and “The Limits  of Governmental Intervention: Some Ways how Government belongs  in the Bedroom and Nursery

to get, how Liberals kill the Family and Marriage Institutions and why they so eager to do it.

November 7, 2013
by Moshe
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Public TV journalists’ personal experience: nothing personal

Norwegian public TV journalists turned to be victims of “asylum -seekers”-burglars. After all, journalists concluded, that they deserved their troubles.  Some could say that a morons! Some could say – it about emotions, not about rational behavior.

The public TV is a classical example of the project run by a State, which “… designs to promote happiness”, not “simply to prevent evil” (see Humboldt W.). So, Public TV is socialist on very essence of this idea. To promote more spending, more discretion is equally good both for civilian bureaucrats (say officials, caring about asylum-seekers) and for public TV management.

Norwegian “public” journalists proved to be so “sensitive”, demonstrating their “anti-racism”, most probable, to prove their loyalty to the corporative needs and interests. So these journalists’ behavior is “just a business, nothing personal” (for more cases and arguments see the books’ Introduction and Chapter 2; Policy Advice).

To break “to promote happiness” by means public TV would mean that current ruling coalition in the Norway (Conservatives and Progress parties) – it is about classical liberal (conservative, politically speaking) policy, not just about conservative (classical liberal) phraseology. Privatization and licence free entrance to the media market is the key precondition for classical liberal  economic reforms’ success.

 

November 1, 2013
by Moshe
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PRC Governmental investments’ risks are soaring

In our books’ special chapter we addressed the problems and risks caused by entrepreneurs’ discretionary and unlawful prosecution in PRC.

Huge financial reserves causes the governmental officials’ wrong perception, that Government  could substitute direct foreign and local private investments. Chinese Government really tried to fill this gap, encouraging high growth rate.

Some experts pointed out efficient empowerment of local authorities  causing strong incentives to earn more in order to spend more. Under new challenges,  this power to borrow and to invest on local (provincial) level turned to be source of big financial troubles.

On one hand, policy to go borrow local, to go spend / to invest local, to shift debt burden from central to local government, looks reasonable, restricting risks of default in the Beijing.  On other hand, attempts  to support high growth rate by provincial governments’ activities, could cause aggregate governmental debts escape out of control.

February 14, 2013
by Moshe
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Obama’s 2013 State of the Union Address

Pres. Obama’s 2013 State of the Union Address could be easily reduced to the simple Declaration: “Here I am, and I’m left-wing political leader”.

Senator Rubio delivered the GOP’s answer. The latter could be summarized as: “And here we are, and we are still right-wing, conservative…”

The GOP’s supporters reactions on the both speeches almost mirrored Obama’s supporters reactions. They stressed inability of the economy burdened by huge debt and budget deficit to bear more and more spending programs (“Nation can’t afford Obama’s wish list“).

“Liberal” scientists rediscovered  for themselves that “The Party interests subordinated” science (“Party approved” science) is. So, they have re-publishing presidential address in the manner fitted for Soviet Academy of Science.

Liberal political commentators outraged by inability of GOP and Rubio to make “U-turn” quickly.

All – American left-wingers’ Chieftain slams GOP congressmen for their willingness to cut education spending for the sake of military spending (see his Address).

Well, if so, it means the real political cleavages and real political competition still observed in the USA. A number of conservative politicians’ willingness to take responsibility for the Armed Forces and to return the parents responsibility for education (educational choice) means they are simply not ceased to exists as right-wing politicians.

Anyway, the comment’s author’s ambition is pretty small: to exploit both leaders speeches to stress relevance of our definitions of leftist and rightist (conservative) politicians. The leftist politicians’ priority is mixed public goods provision (all kind of “free stuff), the rightist politicians’ priorities are defence, security, justice (pure public goods in economic terms).

 

November 26, 2012
by Moshe
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Officials instead of politically incorrect parents

Our forecast made in the book (Chapter 11) regarding officials’ moral erosion; governmental claim for intervention power and priority in parents-children relations is approaching to the practicies.

Politically motivated interventions started in Israel (2005) occured in the UK too. Being precedent, the case has got an icy welcom now.

Question is could the public opinion be converted into political will to prevent the social worker power abuse or just slightly delay the precedent convertion in everyday practicies in the UK?