The Law and Economics Association of New Zealand (LEANZ) is hosting an interesting seminar in Wellingotn next Monday on the free trade deal with China. It is being presented by some people in MFAT who were involved the behind the scenes economic and legal analysis of the deal. I (Agnitio) went to this seminar in Auckland and enjoyed it.
Seminar and RSPV details below
So you’ve probabaly read with great interest Matt’s post on the NZ election political quiz. I also noticed that the same quiz has a verison for the US presidential election so I thought it might be fun for us to repeat the exercise.
You may be surprised by the results:)
Agnitio: Obama (79%), Nader (72%), McCain (72%).
Agnitio Comment: Given I voted for Obama (I also hold US citizenship) I’m not surprised by this. I’m also not particularily surprised I have a high rating with McCain given I generally lean a little to the right economically.
Goonix: Barr (73%), McCain (59%), Nader (53%), the other candidate (53>x>38%), Obama (38%)
Goonix Comment: Consistent with my results of the NZ version of the quiz. There is no way I could vote for the economic policies of either major parties’ candidates (especially Obama). Similarly, I could never vote for the archaic social policies of the Republicans, or their pro-war stance (one which Obama seems to be pretty keen on now too). But I still can’t believe Barr is standing as the Libertarian candidate and is anti-choice!
Matt:Nader (68%), McCain (63%), McKinney (60%), Barr (60%), Obama (60%)
Matt Comment: Although my results were in a narrow band the politicians did very differently in the individual components I choose. Overall, this gives me the impression that US politicians are inconsistent “between-issues” at least in my little slice of reality. Thank goodness I live in Aotearoa – where politician’s inconsistency is equally spread between all the facets of governance 😉
Today National released their corrections policy, which would allow the private sector to tender for the management of prisons.
Although not a completely ‘new’ concept for New Zealand (Auckland Central Remand Prison was privately run under the last National Government) it nonetheless raises the issue of when is it appropriate for such services to be ‘contracted out’ rather than provided ‘in-house’ by the government.
Hart, Schleifer and Vishny’s “The Proper Scope of Government: Theory and Application to Prisons” asks the question when should a government provide a service in-house, and when should it contract out provision? (Anyone interested in the full article may be able to locate it here).
The authors’ develop a model for asset ownership (in this instance a prison), which can be owned by the private sector, who contract back to the government, or alternatively can be owned outright by the government.
The central finding of the paper is that the private sector has relatively stronger, but seemingly contradictory, incentives to both reduce costs (driven by a profit motive, which comes at the expense of quality) and increase quality (to get a higher price from the government, who is an ongoing buyer of the service). In this instance the quality of a prison entails order in the prison, amenities that prisoners receive and rehabilitation.
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Often in New Zealand we bemoan the fact that so much of our “skilled labour” is heading overseas.
This concern is fine – however, looking at this factor by itself does not tell us anything about the change in our skill base domestically.
In a paper by Satish Chand and Michael Clemens it is claimed that skilled migration out of Fiji has been caused by the same factor behind the increase in the stock of skilled labour in Fiji (ht Market Movers) – namely an increase in the return on skills overseas.
This makes sense, an increase in demand for skilled labour overseas increases the return for skilled labour overseas – with an open labour market skilled labour will then bugger off. This in turn will reduce the supply of skilled labour, increasing the wage and increasing the incentive for people to train in these specific skills – increasing the long-run supply of this labour type.
I find the perceived result that the skilled capital stock INCREASES (which is what they find) a touch implausible, as if domestic demand for those skills does not change and a higher return on labour exists overseas (holding the wage rate up) surely the equilibrium level of employment for that skill is lower. Still I do not know what mechanism they use to explain this – as I have not gone through most of the paper. Once I have I’ll correct myself in the comments 😛
Still it is a valid point that we have to look at why people are leaving before making judgments – instead of merely stating that people leaving is a bad thing.
A while ago (after the Pre-EFU) Brian Fallow discussed the upcoming “twin deficits” New Zealand is likely to face.
Fundamentally, the private sector in New Zealand has been borrowing a lot from overseas while the public sector has been saving. His fear is that, once the public sector starts borrowing again our debt levels will rise and we’ll be in big trouble.
However, there is a nifty little thing called Ricardian Equivalence which we can call on to state why this may not be such a problem. In the case of Ricardian Equivalence, when households see the government borrowing, they know that the government will have to increase taxes in the future (as they assume that government spending will itself grow at some rate). As a result, private people save a bit more in order to cover there future tax liability. In this case, it is the national level of debt that is the concern – not the idea of “twin deficits”.
Family First and Rochester divorce lawyers have just released a report on the costs of the breakdown of the family unit. I might not have given it a second glance save that it is written by Dr Patrick Nolan, the more qualified sibling of our Dear Leader.
The thrust of the document, as you might expect, is that costs of having fewer intact marriages are very high. The report points to a bunch of private and social costs, such as increased risks of poverty, mental illness and infant mortality, and tries to put a dollar value on them. It ends up suggesting that the fiscal cost of the reduction in the number of marriages is about $1 billion per year.
I don’t have a sociology background or the knowledge to challenge any of the assertions made by the report, and I trust that Dr Nolan has calculated his costs in as objective a fashion as possible. However, it’s what the report doesn’t monetarise that is most concerning. Read more