A good explanation of the Madoff scandal

No body tells it like Cesame's Street...

More Holograms!! OMG!!! <:o

This, I find mind blowing... Just a while ago I thought project natal was awesome and that holograms were decades away, and these Korean dudes blow it all up. I don't really know how this could be of much practical. I fear we'd use this type of technology to further isolate ourselves from society. However, if you take this technology, give it a pretty impressive Artificial Intelligence motivated opponents and map the entire planet, I believe it would be possible to create the closest thing to a harmless and efficient battle simulator to train soldiers for missions. Imagine the possibilities... (just like the Danger Room for the X-Men, but without Wolverine. Oh well the world is not perfect. Oh! with the right technology, it would even be possible to give us lightsaber duels! lol)

Health care debate in the USA

Here's an interesting video posted on the Huffington Post regarding the debate on health care reform in the USA. As a European I have no first hand experience of what's going on at this time there, and as such these are just some thoughts on what someone leaning over the Atlantic ocean sees from this side. This post is divided in three parts. The first describes what I find interesting about the present shape and content of the health care debate in the USA. In the second part I try to come up with some explanations for this. The last part concludes with a couple of comments on what I'd do if I'd be expected to lead the debate and was able to see things as clearly as I am now that I don't have to lead anything at all. Most these comments are based on chapter 4 of "The Welfare State as a Piggy Bank". A more technical treatment of this topic can also be found in "The Economics of the Welfare State". More information about healthcare in Europe can be found at the European Observatory for Health Care systems, which has a country information index.

I-Present shape and content of health care debate in USA 1) First of all, there seems to be no informed debate what-so-ever on the trade-offs implied by public and private options. In a time when media is accused of transforming complex issues into soundbites, this debate has gone further and turned an amazingly complex issue into 5 words: "good", "evil", "selfish", "communist" and "nazi". In my opinion, "uninformed" or "misinformed" are more appropriate. 2) Secondly, there seems to be no framework of analysis. It's not that people don't structure their opinions in a nice "1500 words essay" format, proposing a range of different opinions. But there should be some structure. I don't expect a unified framework of analysis either. Nor do I expect to see a fully informed debate, with complete information. However there should be some awareness of the multitude of issues involved such as, the consequences of private and public financing in terms of quantity and quality of health care services consumed by medical patients and the price of health care services paid to industry suppliers. 3) As a person who's studied social sciences and is used to the highly stylised methods of theoretical analysis, it is interesting to note how the real world is different from the one studied through the lenses of rational choice theory, even allowing for incomplete and asymmetric information. These models would predict that some form of debate should be taking place, with individuals contributing their personal experiences, specialists contributing their expertise and politicians taking from both sides to understand the issues and explain and implement policy. Instead, what I observe from this side of the ocean is that people who attend these townhall meetings have engaged in a series of collective monologues (not even... monologues at least have an argument, and tend to last a bit longer), dividing themselves in two self reinforcing camps, who seem to find no legitimacy or respect in each other's positions. Moreover the specialists seem to have fled the stage and politicians are doing their best not to be booed off stage. 4) The media is doing a pretty bad job at keeping track of this and at calling it a misrepresentation of facts (whether it be honest or not). The media which is supposed to inform is not.

II - Why is this happening? 1) and 3)Bad or incomplete information is normal in such a complex issue. In our efforts to understand things we simplify them. However, it's interesting that, what seem to be, concerned citizens don't take advantage of the opportunity presented by townhall meetings to destroy myths and clarify their opinion. I can come up with 3 inconveniently impossible to test reasons for this: First, there's intrinsic human nature. Once we make up our minds, we don't easily change it. We are generally stubborn and therefore are not good at being contradicted, much less at constructively engaging those who contradict us. Secondly, there's a group think type of behaviour, which implies that individuals of a certain group tend to interact much more with each other and through those interactions reinforce each other's feelings. In my understanding of the application of the Lipset and Rokkan cleavage model to the USA, the political cleavage seems to be reinforced by a polarising electoral system which favours the interaction of hardcore republicans and democrats with others of their group, possibly supporting this belligerant outcome. Finally, there's the argument from Mancur Olson, that minorities will always be more cohesive and easily organised and thus more efficient at voicing their opinion and lobbying for their position than an unorganised majority. This is a well tested explanation and makes sense, given only a limited number of people in the audience were making a fuss. However, given that there was no evidence of organised strategies, it is difficult to really posit that this is the case. However these protests continue to take place in most townhall meetings and its possible that they are supported by each party. Without any more information I would just go for the first explanation that those Americans which have made up their minds are unwilling to change it and just spoil the party for everyone else. Regarding the specialists I think that it's a non-quantifiable issue of skill and courage. Technical specialists tend to live in a world of their own, where their opinions are questioned in an orderly fashion, everybody being given their time to speak. This does not work here. These people aren't coming to these meetings to get informed, but to boo the guys that they think are responsible for the messy change around them. Politicians in america who like to count votes, might feel uneasy with two crowds making a mess leaving it without any safe position to take (a problem easily solved by the self-selection inherent of political ralies). 2) The issue of the incomplete and inaccurate information could be helped by a more honest debate. Obama won the election by showing people that life is not black or white but rather grey. This is a grey issue, if there ever was one, and should aggressively be treated accordingly. A debate about health care reform should is one which is concerned with a trade-off between equality and efficiency. From an analytical point of view it should be divided in two parts. One considering forms of financing and another analysing different arrangements for physical provision. In each of these, there's a choice between a purely public, a purely private or a mixed system. Each has advantages and disadvantages: choice involves a tradeoff. The discussion of financing can be divided in 2 issues. The first issue focuses on the specificities of individual consumers of health care insurance within the framework of medical insurance, and the incentives that this mechanism creates in terms of insurance provision by private companies. Insurance premiums (the money that must be paid by consumers to their insurance company periodically) are calculated according to the following formula:

This implies extremely bad news for the poor who cannot afford it and for people suffering from chronic (untreatable) diseases. Because for them p is 100%, this implies that if they would insure against that loss, it would be more expensive (because of administrative costs and profit margins of insurance companies) to insure than to pay for it themselves. Moreover, if its a chronic disease, it's likely that the cummulated cost of treatments will be quite expensive. The handicapt, those suffering from diabetes and the elderly will not be covered by health insurance, because they represent too high a risk. That why Americans have medicaid for the elderly. Moreover, anyone living in poor conditions or in a dangerous neighbourhood will also represent a high risk (though not a 100%) and will either not be offered plans or will have too pay overly expensive plans. The state on the other hand detaches health care contributions from risk. Either by making it a flat rate or by tapping or incorporating it into the income tax, it implies that if you are a risky individual you will get access to the same public funded scheme as the non risky. This is good because it increases coverage.

However more greys ensue from these observations. Having to be a low or average risk implies that there are some incentives for strict private insurance. I once ran into this American retired gentleman who told me that in order to get insurance his insurance provider required him to loose weight in order to bring his collesterol levels down. This is annoying, but not a bad thing. On the other hand, if one can get insurance despite one's lifestyle, then there's no need to loose weight like that gentleman did. It's like when we go to a "all you can eat restaurant". The tendency is to eat more than normally, because its cheaper. The interesting observation at this stage is that Americans are more obese than "socialised" Europeans are. Therefore the incentives are either not all that good, or they are not stronger than psychologic and biological dependencies on sugar that low self estime and over exposure to fast foods may create. A final consideration about private insurance companies has to do with their impact on investment. Insurance companies accumulate money a bit like a bank. Instead of depositing money in exchange for being able to withdraw it later, the deposit is made in exchange for a promise that under some circumstances we can tap into an entitlement that the company will pay for our health care expenses (car repair expenses, for car insurance). In the mean time, the insurance company takes the money, invests it and collects the interest of this investment. This means that insurance companies are good for the economy (assuming that they invest well and that this investment is good for economic growth in general and not just for the firm). Therefore a balance is probably to be struck between the need to maximise coverage, maximise productive investment potential and minimise bad incentives (moral Hazard and adverse selection), through an appropriate mix of private and public financing. The second issue of demand and supply, is nicely understood through the tools of microeconomic product market analysis. This looks at the aggregate or collective analysis, and crams everyone together as similar in risk, but different in terms of incomes and can be very technical. However, a simple explanation ought to give a fair and accessible understanding of the issue. The difference between publicly and the privately financed options is a matter of quantity consumed/provided and costs of consumption. The public option works as a subsidy. The state comes in, buys the stuff for a high price and sells it back to medical patients at a lower price (figure1).

The difference between the high price paid and the low price of consumption is paid for by government revenues and debt. If health care is provided for free, then it's completely paid for by the government, which would imply higher taxes and/or debt (area A+B in figure 2).

What this means is that medical companies will not make more or less profits because of a private or public scheme. On this issue the difference is only in the level of taxes or debt and in the number of people who get health care services.

A mixed system like the one France has mixes the best of both worlds. Everybody is covered by the national public healthcare plan. Only people above a certain level of income contribute and people above another, higher, level of income have to purchase insurance from a limited number of highly regulated insurance companies. This creates a situation where richer individuals pay for their own insurance (though they are able to use the public programme) which gives them easier access to private hospitals, thus bypassing some of the cues caused by the public scheme. This on the other hand decreases the cues of the public scheme. One the other hand, everybody can get treated at a private hospital. 4) The issue of the role of the media is completely distinct. My opinion is that we only have our own very voyeuristic nature to blame. Fights are more exciting than their absence and thus get more attention for the same reason that I would be more interested in the people talking outside of my class in secondary school than in what my teachers were saying. I don’t know many people who’d bother to read this entire post. And those who would probably don’t have the time to do so. A sober thorough news channel would be forced to hire extremely well versed specialists to discuss at length issues which few people would watch. This would decrease their ratings, make them loose advertising revenues, decrease the value of their publicly traded shares and ultimately lead to a more or less hostile takeover from some competing conglomerate.

Comparing news casters with Walter Conkrite does very little to help this debate. Walter Conkrite was a bigger anomaly in terms of providing good information as the British political system is good at providing good governance. First of all there were no 24 hour news networks, who needed to entertain audiences all day long. Secondly, he had very little competition, as at the time there were very few syndicated TV channels broadcasting across the USA. Finally it was good luck. Walter Conkrite and Edward Murrow were two giants in a small pool of normal journalists. They could as easily have been very bad reporters. Obviously the great ones were remembered as they operated in an environment that allowed them to shine. Newspapers seem to not be doing to bad a business at discussing some of these issues, but who bothers to actively read a newspaper, when one can passively be bombarded by the news as a couch potatoe? The system is built in such a way that it makes it much more difficult for anyone to shine.

III – What would help?

I think that 2 things could be done very easily that would help the general tone of the townhall meetings. I also propose 2 more widespread ideas for reforms that would help healthcare reform, its debate and the debate of other issues.

First, before the speaker comes to the stage, have a member of security read the rules of the talk. Ensure that anyone speaking without having been given authorization or otherwise disturbing the session will be politely removed from the premises. Might look bad on camera, but that’s just tough. Looks worst for the guy getting kicked out and it looks worse for the speaker if he stays as he is made to look like he cannot control his audience. If he does indeed say anything that is dauntingly stupid, don’t worry if it is that offensive people will rebel en masse and no amount of available (and reasonable for such an event) security will stop them from kicking him out. Finally if he does say anything stupid the camera is there to capture it. My hunch us that nothing bad will happen. Bush did that for 8 years and nothing bad happened.

Secondly, hand out panflets at the beginning of each session. Small, key word panflets briefly explaining the pros and cons of the public the private and the mixed scheme. They should be 2 pages (1 paper both sides) long and as a rule of thumb it would be smart to not let there be more than two panflets. These should be drafted by a non partisan group such as the CBO (Congressional Budget office) and endorsed by both of the major parties. This should enlighten the audience and improve the debate.

More complex proposals intend to change the rules of the game. Specifically regarding healthcare, regulate the restauration business with particular emphasis on fast food joints. Governments are there to provide good incentives. Meals that cost less than a certain price and provide calories above a certain threshold of healthiness should be taxed. Foodstuffs that comply with the health and safety concerns and targets endorsed by specialists and the government agencies should be given subsidies or tax cuts. Incentivise eating to optimise it, rather than maximise it.

Secondly, pass a law forbidding people from carrying guns. No one needs to carry automatic riffles. Why not carry a bazoola? It’s threatening and not appropriate for a debate. I don’t care what they say, this is the 21^st century, not the far west. There’s law enforcement. That is a fairly tricky thing to do in the USA just on its own… Thirdly, there should be regulation of the 24 Hours news networks. As any (social ) scientist will tell you, more information is not necessarily good. Whu not force them to follow a pattern of coverage which requires that 24 hours news networks must report on geographical areas by time zone? So say when its 9o’clock in a certain place, one obtains the news from that place. Then every so periodically, one gets a roundup of news from a collection of places, so that the news is news worthy!

Finally, pass the god damn legislation relatively fast. Yes liberal democracy is great and there should open debate about these issues. However debate must end at some point. There’s just so much that can be said about anything for so long. If you have the majority, and if it delivers you the votes, than pass the legislation that seems the most plausible, while you can, particularly when public debate becomes this silly. If the electorate does not like it, they can dismiss you at the next election and the next guy will either keep or reform the system. That’s the real beauty of liberal democracy.

PS: Oh by the way, there are some pretty well informed specialists (Krugman, Stiglitz, Mankiw, Roubini,etc) who are skillfully active in the debate. Some politicians (McCain, Barney Frank, and who else?) have demonstrated a very solid moral backbone in the debate. It's not ideal, but while it is imperfect, it is far from helpless.

Continuing with Interfacing and Interacting: Holograms

Here's some more food for though about what our technological future reserves us:

video holograms with tactile recognition and sensation. For your own sake, please do check the other videos available.

New methods of interfacing

What does the future hold for us once this microsoft natal thing evolves into an organic part of our environment an how we interact with the world around ourselves.?.. What potentials for daily life from miniaturization?

Also, check this google wave thing... I haven't watched it all, but there seems to be some hype about it.

Anyway, here's a little essay by Dan Bricklin about these issues.

We (gen Yers as we seem to apparently have become denominated by the press) seem doomed to become the hyperconnected unemployed of the future...

Reconstruction, Transition and all that mess

The period of the USA's history known as reconstruction (fairly decent review of it in Wikipedia and a rather thorough introduction to it in Yale Open University Lecture Series)is extremely interesting and should probably be put into a discipline of its own, together with, the Japanese Meiji Era, the handling and the consequences of the great war, the Armenian Genocide, the German, Italian and Japanese reconstructions after WWII, transition from communism to capitalism in Eastern Europe (CEEC - Central and Eastern European Countries and Russia's Glasnost and Perestroika), post 1979 Communist China opening to the world, post-Franco Spain, the aftermath of recent post WWII genocides and atrocities and other civil wars in Africa (Sierra Leone, Rwanda, Liberia Somalia, Eritrea, Congo, etc), Southeast Asia (mainly Cambodia and its infamous Khmer Rouge), the Balkans and the transition from military or otherwise fascist looking and sounding régimes in Latin America (Argentina, Brazil and Chile come to mind, but I'm sure there are others). It's possible that I'm being unfair by leaving out Oceania, but it seems that these were rather uncontested situations, where the majority crushed the minority and there was no reconstruction, only annihilation. There was no contest.

One thing that becomes quite evident from the reconstruction period in the USA is the problem associated with the concepts of formal and informal rules, as described by North here (for almost all he ever wrote see here and here), that in order for rules to be credible, they need to enjoy enforcement credibility, which can only be guaranteed by a synchronicity between formal laws passed by legislations and informal rules predominantly present in social conventions, or what he refers as the mental models which help us understand the world. I thought at first that it might have been possible to support ungrounded (in public support) legislation through coercion or incentivizing side payments (North does not actually mention these two), but I guess that in such circumstances no one is determined enough to enforce the first and the side payments are not sufficiently large to be effective.

[On a side note, if anybody has ever read the biography of Franklin Delano Roosevelt, it may become apparent that he was acutely aware of this problem as he always feared to be ahead of public opinion, which caused his delay in entering in WWII )].

This is a big field, which is concerned with understanding the transition from instability to more calm states of nature. In this specific context my interest is larger. It encompasses not mere economic and political instability but also institutional instability as well as the possibility of economic, political, social and institutional stability as the means to achieve North's adaptively efficient economy/society. In this specific case I am very interested in the transaction costs specific to war as well as general economic, political and social strife. I am interested in how societies change their minds or fail to change their minds, and how they move on and deal with prior opposition. How did the unionists deal with the confederalists? How did the Tutsis deal with the Hutus? How did the allies deal with the Germans? How did moderate Germans deal with Nazis and the previous generation? How did Cambodians deal with the Khmer Rouges? How did moderate Spanish deal with the phalangists? How did capitalist Eastern Europeans, Chinese and Russians deal with their communist counter parts (and by the way, vice versa should also be interesting to know)? and more importantly, to which extent did this process of national healing or lack thereof affect economic performance and social and political stability?

Anyway, one thing seems certain, reconstruction failed, and depending on your view of the American Civil war (my apologies to Latin American sensibilities), it probably hindered the unionist war efforts. Now the interesting thing is to understand where and when it failed, and what about the USA made this possible, and whether this was inevitable.

I've got to finish this dissertation so I can get down and do some reading...

In the mean time, here's an interesting look at contemporary KKK. The little subtitles are at least as interesting as the photos.

Potential output in the EU and a EU AD response

check this out...

The Lisbon Treaty, National Politics and the potential backlash

The Lisbon treaty is an annoying little monster which may be messing around the normal path of domestic politics... This is the case in the Czech Republic, Poland, Ireland and the UK. In the latter, this may be particularly strong. I'm not sure about this and it is only a hunch. However, if only on the surface of it, the story takes turns which seem to plot to make me believe I am right. Here's what we know:

If Gordon Brown had called an election just around the time he came to power, he would have probably won it. At least so everyone said in the summer of 2007. Certainly he would have had a better shot at it than what it seems he will in june 2010. He was deemed as politically unable for not having done so. I really ought to know more about British politics, but I think that the Lisbon treaty might have had something to do with it. Could it have been that Brown feared having to address the issue during the election and that that would have exposed the issue and made it more salient raising even more problems for the EU? Could it have been the looming financial crisis which kept on growing? Could it have been the bad polls? its hard to say... It also hard to understand why no one has yet made a decent leadership challenge. Really Brown is a fairly lame duck prime minister. Many things would change if the Tories came to power, though may be not as many as people would want to. Anyway, may be I am not cynical enough, but one thing I do suspect would happen would be a referendum on the Lisbon treaty, which if the media and the last European elections are at all representative would result in the reversal of the British position on the Treaty. This would make a mess for everybody. Who is holding the boat for labour? I believe it is Peter Mandelson, who was a EU trade commissioner and is just about the only person aside from Miliband with a decent knowledge of politics and of the influence of the EU, and most, likely no significant ambition for the premiership. Could he be protecting Brown in order to protect the EU treaty, or could I have the causation all wrong, and despite rivalries, he is protecting Brown in order to aid himself and as a result that protects the EU treaty. Its difficult to untangle these causalities, but the matter of the fact is that at this stage the UK is an extremely important player.

Nonetheless, I must say that if Ireland rejects the Lisbon Treaty for a second time there really isn’t any precedent to throw around. Normally countries and treaties get a second chance, but not a third. It is either unnecessary (because their vote does not stop others from moving forward: Norway, Sweden, Denmark) or undesired (because national politicians refuse to call a second referendum: France potentially the Netherlands too). There's never been talk of a third referendum. Not even now. The idea is that Ireland will pass the referendum. There is no plan B.

So now we know when Ireland will hold its second referendum: 2 October 2009. In the most optimistic of scenarios, Ireland approves the treaty, the Czechs and the Poles deposit their treaties in Rome sometime before the British election is held and then no one cares any longer about what happens to Gordon Brown. But what if either or all of these 3 things happen:

1)What if the Poles decide to delay the deposition of the treaty?

2) What if the Czechs decide to delay the deposition of the treaty?

3) What if after the treaty is passed in Ireland, the House of Commons withdraws support from Brown and the election does not happen in June 2010, but in January? What if everyone else does everything right, but Brown is kicked out too early?

If any of these things happen, on retourne à la case zero as the French say...And here is where it gets interesting. Imagine that either one of these countries fails to ratify the treaty and effective puts an end to the process, with 5 years waisted in meetings, votes and referenda and no advancement made... Can you imagine the backlash? Whoever makes a mess out of this won't get a thing from the other countries, particularly from France. the one who has a better chance is Ireland, but still there, if the treaty fail, Sarkozy is going to beat the Taioseach into a gruesome rotten peach for not campaigning better. It won't be pretty. If it's one of the two Eastern European countries, they will be so heavily pounded they will be sorry for joining the EU... The same applies for England who might actually decide to do that, under Cameron.

So what happens then? European academics like to say that countries join because of each other. The UK joined because the EEC(read France and Germany) was growing faster. This made Ireland and Denmark join too, because they were heavily dependent on the UK for trade. This coupled with the fall of the Soviet Union also incentivised the rest of Scandinavia to join in. Would Denmark and Ireland leave if the UK left and become simple members of EEA, like Switzerland and Norway? Would Sweden and Finland also leave?

que sera sera

German Ruling on the Lisbon Treaty's Constitutionality: Legitimacy and Shared Sovereignty

Interesting days for European Integration...

Ireland sets a date for its referendum (2/10/09), the German Supreme Court ruled on the constitutionality of the Lisbon treaty ( check here for the full but only preliminary version of the ruling. BTW kudos must go to the German Supreme court for publishing its rulings in English as well as in German) and I, for lack of imagination and choice, seem to continue to engulf myself in the economic effects of budget deficits and their implication in the analysis of the credibility of the Stability and Growth Pact (SGP). It's fiscal policy analysis with budget deficits, cyclical budget deficits (the potential output version, please...) and their determinants and their effects on Repo rates, flying all over the place.

Here's an interesting article about the German ruling and it's potential consequences. I haven't yet had the opportunity to read the entire ruling and I doubt that I will have the time until September, but based on this article, here's what I its seems to say:

1) That sovereignty rests with the state according to article 23 of the Basic Law

2) That the European Parliament is not a genuine legislature

3) It clearly states what policy areas should not be covered by European Integration, one of which is fiscal policy (ie:fiscal policy is national not European)

I know nothing of Common or Civil Law, much less of the specificities of the German Basic Law, but here's what one can make out.

1) seems to be self evident in explanation, ie: sovereignty rests with the national state because it is said so in the German basic law. The ruling does not specify that all sovereignty rests with nation-states, but only specifically in Germany and as far as stated by article 23 (which for lack of knowledge I will just assume that it is absolute within the boundaries of common sense, ie: as absolute as it is permitted and more or less customary in a developed liberal democracy). This is interesting because all that seems required to change this is to change article 23 of the Basic Law. If it is changed in a manner that ensures that sovereignty can be "pooled" or that recognises European legislative mechanisms as not jeopardising German sovereignty, it shouldn't be much more difficult to solve this problem in the future, than to get the necessary super majority to change the German Basic Law. I don't know why probably because of Munchau's sentence: “Power may be shared, but sovereignty may not", I keep on remembering that sentence I heard about the competing views of the EU. Proponents say that the EU pools resources while opponents claim it uproots sovereignty by sharing it with other nations, and allowing them to have a say in their decisions.

This then brings us to the second point, the EUs lack of legitimacy. I will limit the discussion as the court itself did to input legitimacy, as only that rightly seems to make sense in judicial decisions (however the Chinese would probably like to see this included, at least if they want to legitimise their state on anything else than brutality and raw ability to keep u quiet...). 2) is justified on an interesting basis. One point that keeps on creeping up is the fact that the EU legislative process is not legitimate because of the electoral rule guiding the European Parliament and the assignment of seats. There seems to be a problem of "electoral equality" (II.cc). This is interesting... I've spent the best part of the last 2 years trying to learn about the EU its perks and its problems and I swear to god this never showed up... at least not in any relevant manner. The only time I heard a discussion about it was during the discussion itself of the Lisbon treaty where the Polish president or his brother wanted an electoral rule that accounted for the dead poles of WWII... The courts talk is in exactly thr opposite direction. The other two problems of legitimation are indeed more common. the complainants argue that the Commission is not a representative body, that there is no European political competition and that the commission's monopoly of power to initiate legislation is unconstitutional. I wonder what the court has to say about all this.

I still havent come accross the reason for the different reasons of all policy areas. However it seems plausible that the court goes through all of them individually and at length.

For the decision it really gets interesting only from heading "C", which is about half way through the paper. But again, I'll go through it later.

Finally I must say I do like the mess that it might have created with the SGP and how there might be some problems coming up...

Here's what's interesting: Munchau complains that everybody is cheering that the Lisbon Treaty can be ratified, but nobody realises the constraints that have just been put on future European integration. I believe that this is true, but quite irrelevant for now. The truth is that right now the priority is to get the treaty ratified. It's been 5 years, closer to 6, everyone is fed up with this and its about time to get things moving! We keep on talking about process, not substance, and really process, unless it is corruption, bores people. It's too technical, too confusing. (I just witnessed this today when I tried to explain to a friend the application process for jobs at the EU). Anyway, to go back to the point, European and National officials just want to get this over with. The motto is: "tomorrow, we'll worry about tomorrow". This approach is actually benefitted from this ruling and its meanders. As a matter of fact it helps that someone came along and said: "listen, the EU has problems. It's decision making is not ideal and actually parliaments ought to have a bigger say. Moreover if you want to delegate more powers, to the extent that a delegation of legitimacy will occur, you can't do through the back door. The UK and France won't simply leave one day the UN security council and be replaced by a EU rep due to backstage plotting. If you want the USE (the united states of Europe), you have to do it right. You have to change the constitutions and to properly address issues of where sovereignty lies." Specifically this helps the case of pro-Lisbon in Ireland a lot. Here's a ruling from a pretty pro-European country, saying explicitly that the Lisbon treaty does not delegate power in all those policy areas which spooked the Irish electorate, with images of Irish soldiers fighting and dying for Italy (god forbid), while their one-night-stands were forced by Brussels to abort their unwanted children, and their unwanted children were taught Esperanto in school, so that they could fill up their Esperanto European tax revenue form. According to Cerniglia and Paganni (2007: 12-14), there is a pretty decent match between present delegation of policy areas to the EU and the preference of Europeans for such delegation. Actually, it would seem that there is even some room left for further European integration in defence, humanitarian aid, the environment research and development and foreign policy. But I lose myself... The point here is that this ruling may help the cause of the Lisbon treaty for the reasons that Munchau thought it would hurt European integration. If only the Irish pro-Lisbon side can get properly organised and if their dumb politicians can shut it, we might get a chance to have this thing over and done before David Cameron comes to power and messes it all up for everyone (him included)...

As to the rest, I'm sure that the nation state will be as less fashionable in 25 years as it is today in comparison to 25 years ago...

BTW, another interesting issue for me is the idea repeatedly (6 times) stated of "the will of the people". This is interesting for someone like me who has studied political economy for a while because we get used to talk about majorities and minorities, not "the people" and much less "the will of the people". Obviously I suppose that it is implied in the courts language that "the will of the people" is proxied by "the will of the majority of the people". A Rousseauian reminiscence...

Economic Development and Political Stability: Africa Vs South East Asia

Why is Africa less developed than South East Asia?

Because it is less stable? (remmember both were colonies)

Fair enough, but why is South East Asia more stable?

Aha! That's where the crumbling of the cookie gets interesting...

Here's some food for thought:

Because ethnic tensions were stonger in a Africa as a result of the more artificial division of borders. By the way, South East Asia was pretty unstable in the early years of independence... China, Laos, Cambodja and Vietnam went at it pretty hard. There's always Myanmar (or Burma... how did that name change happen anyway?) and I don't know how developped these countries are. Hum...

Ok it seems I'm stuck in the typical Social Sciences conandrum... I'm stuck with more questions than answers and it's likely that my question might simply be fallacious and based on a wrong assumption. "Scientific methodology... Ah, What a pain you are!"

So ok... I guess that now I need to check if my basic assumption is correct and focus the analysis.

New question: "Is Africa more or less economically developed than South East Asia? , and if so why?"

Not that it wouldn't be interesting to check whether it is more or less legally, politically or socially developped, but one must start somewhere...

This should make my life easy. I pick a number of economic variables and then look at their determinants and understand what caused the differences in values between Africa and South East Asia.

Potential Variables:

1. GDP and its growth (Capital stock and its growth, Size of labour force and its growth, depreciation of capital stock and its growth and their productivity, for a Solow growth approach to the issue; or initial GDP, social and political stability measured as number of murders, terms of trade, and human capital for a New [ie endogenous] growth theory approach à la Barro; finally for just the GDP I may wanna compare the accounting variables: Y=C+I+G+X-M)
2. GDP per capita and its growth
3. Gini Index (for some idea of the income inequality) and its growth
4. Inflation and its growth
5. Unemployment and its growth

so I guess I'll have to look into it...

By the way, I should mention this all started because someone told me they had studied many things during their master's, one of which had been conflict resolution. The question seemed relevant at the time, but I feel like I'm not really running towards it... It seems as though the issue started as one of political stability and now, by refocusing the question I've completely removed it from its original purpose... Oh well! What are you gonna do?

But the original question is still relevant and probably easier to assess... "Is South East Asia more politically stable than Africa? If so why?"

Political stability

1. number wars in a certain period of time
2. number of governments in a certain period of time
3. level of control/authority projected by the government throughout its geographical jurisdiction
4. number of politically motivated aggressions (from the simple vandalism to political assassinations)

Causes

1. Heterogeneity of population (this kind of fits into the Cleavage structure)
2. Lack of functional institutions to mediate conflicts and legitimise decisions from the majority This is a huge heading: incorporates the recognition of specialization and sphere of influence of one institution by all the others (Executive, Legislative, Judicial, Military, Police, Central Bank), has to do with number of veto players (Horizontal executive power sharing through the electoral system and cleavage structure and vertical executive power sharing presidential vs parliamentarian and federal vs unitary), possibility of exit and of exercising voice, legitimation (input or output) processes,
3. External interference
4. Geography and the geographical organisation of resources/capital (physical and human)

Fortunately I don't have a dissertation to write...