Claims

It is easier for a special interest (faction) to manipulate the levers of power at the local level than at the national level, so courts must be especially careful to protect constitutional liberties locally, since individuals are often powerless in the political process and only meet powerful interests on a level playing field in court.

Teachers unions are uniquely politically powerful because teachers are present in roughly equal numbers in every legislative and congressional district (since schools follow population), making them simultaneously dispersed and concentrated—a combination that lets them influence both local and national politics; their power grew as private-sector unions waned.

Major policy reform requires a political entrepreneur who sells a broad vision to the public to head off interest groups; intercity transportation deregulation succeeded not by selling technical details but by framing it during 1970s inflation as a way to increase competition and fight inflation.

Central banking politicizes the money supply, creating circumstances where competing interest groups (such as debtors who benefit from inflation) lobby for inflation or deflation; once money is politicized it becomes harder to return to a neutral system because beneficiaries resist losing their favors.

EU Net Pulls Members Toward Markets

The EU, despite annoying regulations, on net pulls Europe toward markets because countries getting ready to join improve their economic-freedom and laissez-faire scores on the path to accession (and may increase them slightly after joining), nagging less market-friendly post-Germany eastern members toward greater economic freedom—like a Rocky training montage.

Governments Are Shaped by Their Citizens

Governments and productivity are shaped by the citizens of a nation even under authoritarian or totalitarian regimes, because rulers can only diverge so far from the masses on average, as recently seen in China where even a strong dictatorship had to listen to the people.

Successful Monarchies Are Really Oligarchies

Neoreactionaries romanticize monarchy mistakenly, because in equilibrium kings are almost always 'king and council'—something more like a corporate board than either a sole entrepreneur-owner or a stationary-bandit monarch—so the successful so-called monarchies aren't really monarchies but oligarchies.

The Fed Works Because It Has Real Independence

The Fed functions as a non-corrupt technocracy because its officials have guaranteed long terms and it prints its own money to spend, forcing Congress to make a real effort to change anything—'a room of their own'—whereas the FDA and CDC must come to Congress for money annually and serve at the president's pleasure, leaving them in a realm of slack and reflecting Congress's muddled disarray rather than a culture of raw technocracy.

China Poor Because Communism Is Dumb

China is the poorest majority-Chinese country primarily because communism is a major mistake with decades-long negative effects on institutional quality, leaving China stuck in an institutional cul-de-sac; the issue is not non-linear ethnic composition effects, and North Korea would be an even bigger deep-roots outlier than China.

Make the FDA and CDC More Like the Fed

Rather than increasing presidential power, the power of independent committees should be increased: FDA and CDC reform should make them more like the Fed, with appointed experts on long terms who feel free to ignore Congress and build their own technocratic culture.

Elites Below Rich Democracies Become Rent Seekers

Handing power to elites works well in moderately-or-more democratic rich countries (Amartya Sen's definition: competitive parties, free press), but below the level of rich democracies, empowering elites tends to produce old-fashioned Gordon Tullock rent seekers who steer everything toward themselves and ignore the masses—which is why '10% Less Democracy' targets only rich democracies.

Politicians Mediate Voters' Contradictory Demands

America is more libertarian than the median voter's stated preferences because politicians facing reelection trade off between what voters say they want and the economic growth that actually helps them win, mediating voters' contradictory demands—'I don't want you to pull off the bandaid, but I want my wound to get better'—so delegating authority to elected politicians yields some benefits of elitism even within a democracy.

Independent Central Bank Faces Political Pressure

People have forgotten political economy, wrongly assuming that if a central bank says inflation will average 2% it will; political pressures on monetary policy are important and underappreciated, which is why Rogoff is returning to the topic he pioneered with the first paper on why central banks should be independent.

Partisan Debt Ratchet Theory

Debt keeps piling up because of a partisan dynamic (per Alesina-type models): when the liberal party is in power it spends and borrows because it may lose control in the future, and when conservatives are in power they cut taxes and build up debt—so whoever is in power says don't pay attention to the debt, producing the ratchet we see today.

Political Business Cycles Are Empirically Overwhelming

Politicians everywhere who have the power try to goose up the economy before an election, and the empirical evidence for this is overwhelming; the paradox his 1987 paper addressed is why this fools anyone, modeling it as a signaling game where voters know they're being manipulated but vote for the incumbent anyway.

Catalan independence is overrated 19th-century nationalism

Catalan independence is overrated because it is driven mainly by a 19th-century sense of nationalism and resentment at being treated badly by Madrid, with no clear upside; in a thriving European Union regions can achieve more than on their own, and breaking up Spain would not serve the larger goal of a politically richer, deeply democratic Europe.

Liberalism before democracy is easier than the reverse

In Western Europe and Britain, liberal ideas developed before the franchise became a mass franchise, making it easier to embed tolerance, separation of powers, and rule of law; in the Eastern Mediterranean and places like Turkey, nationalist mass mobilization and mass-franchise regimes came first, so trying to build liberalism afterward is much harder, though not impossible.

Geography matters by enabling transfer of ideas and benchmarking

Geography mattered for development not deterministically but by enabling the transfer of ideas, competition, and benchmarking; France had initial conditions resembling Central/Eastern Europe but became a Western democracy because its proximity to Britain and the Netherlands shaped what kind of country it aspired to be, and Vietnam's post-opening success owes much to being located in Asia rather than Latin America.

Social transformation, not growth, built liberal democracy

What enabled the rise of the middle class and liberal democracy in archetypal cases like Britain was not high growth rates (which were modest by modern emerging-market standards) but the qualitative transformation of the economy and social structure: the spread of bourgeois liberal values and restraints placed on what the state could do.

Possibilism: outcomes are 50% structure, 50% agency

Following Hirschman's notion of possibilism, deterministic theories of development (industrialization then urbanization then bourgeoisie then democracy) overstate inevitability; much of development is maneuvering around constraints bequeathed by geography and history, so even if 50% is driven by exogenous conditions, 50% remains in one's hands.

Rapid growth can aggravate rather than ease social tensions

Rapid growth would not necessarily have eliminated the ethnic, regional, and tribal tensions afflicting countries like Nigeria, and may even aggravate them; the Arab Spring uprisings arose not in the least-developed Arab states but in the most rapidly developing ones like Tunisia and Egypt.

Liberal democracy needs restraints on the median voter

Democracy has two things we care about: reflecting the median voter's views, and preventing the median voter from doing whatever it wants to the rest of the population; the rise of electoral democracies worldwide (now outnumbering autocracies) has delivered the first but lacks the liberal element of rule of law and minority protections, allowing election winners to trample the rights of non-majorities.

Euro crisis was interdependence, not Greek profligacy

European integration was always an elite project sold to populations rather than demanded by them; the euro crisis was fundamentally a crisis of interdependence, with German banks as much a source as Greek or Spanish borrowers, but elites framed it moralistically as North disciplining a profligate South, a political failure that now makes the situation hard to undo.

Kurdish conflict is solvable, not structural

There is no deeply structural barrier to resolving the Kurdish question in Turkey (formal border redrawing is very unlikely and Kurdish nationalists realistically do not seek full independence); the realistic demands could be met, much as the Basque problem in Spain was resolved, but the cleavage is currently being exploited by Erdoğan to build his nationalist base rather than resolved.

Erdoğan deliberately aggravates cleavages to stay in power

Turkey's failure to develop habits of regular power rotation and compromise stems from successive leadership mistakes—first repeated military interventions short-circuiting the process, and now Erdoğan's tactic of doing anything to remain in power, including deliberately aggravating cleavages of sect and nationality such as exploiting the Kurdish problem to build a nationalist base.

Cross-cutting cleavages produce tolerance via repeated-game incentives

Pre-1975 Lebanon functioned as a quasi-liberal democracy because so many cross-cutting cleavages meant no single group could expect to rule forever; lacking that expectation, groups struck bargains and stayed moderate out of fear of what others would do in power. The system collapsed when the influx of Palestinian refugees let one group see itself as a permanent majority, removing the incentive to compromise.

Turkey's underdevelopment is 50% structure, 50% agency

Why countries like Turkey remain relatively poor is roughly 50% structure and 50% agency: unfavorable initial conditions (starting on the wrong side of the 19th-century division of labor, British imports decimating craft industries, defeat in war) combined with leadership agency, where Atatürk's brutal, narrow top-down modernization produced both Turkey's secular middle class and the lasting problem of having pushed out conservatives and Kurds from the polity.

Nuclear proliferation analogy to cleavages fails under anarchy

The cross-cutting-cleavages logic that more groups create stability does not extend to nuclear proliferation, because that logic operates within a well-ordered polity, not the global state of anarchy with no government; more nuclear states is dangerous chiefly because the probability that at least one acts irresponsibly rises with the number of holders.

Voter Recruitment Expresses Preference Intensity

Voting systems already capture some preference intensity informally: people who feel strongly devote their own time, energy, and volunteerism, and recruiting another voter to your side effectively doubles your vote, so intensity gets expressed through effort even without formal mechanisms like quadratic voting.

Limited vs Open Access Orders Framework

Following North, Wallis, and Weingast, societies are either limited access orders—where a ruling coalition holds all political rights and economic opportunity, stays stable by collecting monopoly rents while everyone else is powerless—or open access orders, where everyone has some access to economic opportunity and political rights; a key test is whether anyone can form an organization to compete against incumbent political or economic interests, which is forbidden in limited access orders and open to all in open access orders.

Rulers May Be Too Smart for the Ruled

Freedom may decline because people fear other people's liberty ('fear of others' liberty'), and if politicians can manufacture enough public fear of others' liberty they can sustain a regulatory state and a vicious cycle in which regulators become so powerful that no one dares challenge them; the open question is whether political and economic entrepreneurs can still overcome this manipulation, or whether the rulers have become too smart for the ruled.

A Race Between Freedom and Regulatory Entrepreneurs

There is a race between technical and political entrepreneurs on the side of freedom (Uber was both a technological and political innovation that mobilized 10,000 voting millennials to get around the taxi lobby) and political entrepreneurs on the other side, who have a wonderful opportunity to use the regulatory state to ensure big businesses support their campaigns—so the outcome depends on which kind of entrepreneurship prevails.

Regulators Are the Barons of Our Era

The chief threat to rule of law and economic and political freedom comes from the regulatory state, whose vast and increasingly politicized power already silences opposition—no bank dares speak against Dodd-Frank, no health insurer against Obamacare—making regulators the 'barons' of our era who use their power for political support.

Open Access Orders Are Hard to Destabilize

Open access orders tend to remain stable and are hard to destabilize because, by definition, everyone has a stake in the system, and reaching such an order requires building up layers of individual norms, cultural beliefs, and formal institutions—where documents like Magna Carta matter not for what they did in 1200 but for the cultural reverence they generate centuries later—so one must be brave to forecast that such an order will degenerate.

Sovereign Debt Crisis Could Birth a Dictator

A pessimistic scenario for losing the open access order: chronic deficit spending and unfunded liabilities create an inevitable conflict between promised benefits and promised bond repayments; the US, being too big to find enough other people's money (unlike Greece), could suffer a sudden sovereign debt crisis amid frayed politics where people no longer see legislators or executives as legitimate, leading to street violence and a public willing to turn to a dictator to resolve it.

Two-Way Capture Corporatist System Emerging

An emerging system of 'two-way capture' is replacing simple regulatory capture: businesses are carved into cartels of large firms protected from competition, but it is not a cozy relationship—they must do what the administration and regulators want or face criminal prosecutions and multi-billion-dollar settlements, making the regulatory structure ripe for a corporatist system that threatens political freedom.

Layering Uncertainty and Commitment Shrinks the Deal Space

When uncertainty and the commitment problem are layered on top of one another, they create impersonal situational forces that drastically narrow the space for a peaceful agreement; leaders' mistakes and foibles—which observers tend to overestimate—then become crucial only because the room to find a deal was already so small.

Putin's First-Order Question Is Holding Power

For Putin, the first-order consideration is not the commitment problem or sanctions but whether he believes he can hold onto power by fighting versus settling; if continued fighting is more likely to preserve himself and his cabal in power, the war can continue regardless of national interest, making this private incentive the thing Blattman worries about most.

War Is Costly So Bargaining Usually Wins

War is so costly and ruinous that it very seldom makes sense to fight; rivals can look at relative strength and find a bargained split of the 'pie' that makes both sides better off than destroying part of it in war, so most of the time peace prevails and sustained fighting only happens when something rips actors out of that gravitational pull toward peace.

Five Buckets Explain All War

All explanations for why rivals fail to find a peaceful bargain fall into five buckets: (1) uncertainty/imperfect information combined with incentives to bluff, (2) commitment problems such as preventive war when one side will be much stronger later, (3) unchecked leaders who don't internalize war's costs or have private incentives to fight, (4) intangible or 'stable' preferences like status, vengeance, or ideology that aren't in the material pie, and (5) misperceptions—persistently wrong beliefs about the other side.

Unchecked Leaders Don't Internalize War's Costs

The third cause of war is unchecked leaders: when the decision-maker does not bear the costs of war—or has private incentives to fight, such as preserving an apparatus of control threatened by democracy, capitalism, or NATO—the normal deterrent of war's costliness is weakened, and the private benefit to the ruling cabal can overwhelm the costs they personally bear, making war attractive even when it would harm the population.

Over-Centralized Power Is the Deepest Root of War

Over-centralized power is arguably the most fundamental root of all conflict and warfare, not merely because it insulates leaders from the costs of war, but because it systematically accentuates uncertainty, commitment problems, and the psychological misperception problems—making it a deep and systematic driver that helps explain where conflict will appear in the world.

Malawi overstates food production to keep aid

Governments have incentives to overstate food shortfalls to qualify for aid and to overstate food production to show aid is working; Malawi has for years seriously overstated maize production to justify continued funding for fertilizer and maize subsidies, yet Malawians are neither gaining weight rapidly nor exporting large amounts of maize, so the statistics must be wrong.

Statistical priorities set by donors not states harm accountability

In many poor countries the statistical agenda is determined by outside donors providing ad hoc funding for particular projects to prove their own policies, rather than by the state's own priorities, so data are not collected for the state itself; this prevents fostering domestic political debate (e.g., Tanzania has had no labor survey since the 1980s despite candidates campaigning on employment), which undermines the public record of trust, accountability, and good governance.

Uninterested leaders neglect rather than distort statistics

Rather than leaders deliberately distorting numbers downward to keep receiving aid, the relationship runs the other way: leaders genuinely interested in growth (like Ghana's and Nigeria's seeking middle-income status) push to update GDP, while leaders not interested in economic growth are simply not interested in GDP statistics either, so the figures do not enter their calculus.

Centralized vs Dispersed Authority as Research Question

The deep significance of Greek prosperity is that Greece is the major counterexample of a highly dispersed-authority society (hundreds of independent states with no central palace) against the centralized imperial societies of the ancient world; testing whether dispersed authority can perform economically well or is doomed to poverty illuminates how economics works generally.

Imperial Wealth Came From Force or Ideological Coercion

The great ancient wealth-amassers like Croesus and Darius were not innovators or entrepreneurs but acquired wealth through force or ideological force (e.g., Egyptians surrendering produce to a Pharaoh believed to be a god), and the resulting insecurity of property rights in such societies, plus the disincentive to invest in oneself, partly explains why the Greeks did comparatively better.

Democracy Failed to Spread Beyond Greece Due to Elite Incentives

Democracy did not spread beyond Greece because it requires rare cultural presuppositions (equality among native males, value of liberty) and because entrenched narrow elites who efficiently extract a small surplus from many people prefer a guaranteed large share of a small pie over a smaller share of a larger pie, so they resist democratization at all costs.

Inter-State Competition Drove Institutional Innovation

The second major explanation for Greek prosperity is constant institutional (and some technological) innovation driven by high competition among hundreds of city-states combined with easy cross-state transfer of institutional technology due to shared language and culture, so successful innovations like coinage and democracy spread rapidly across the Greek world.

Institutions Express Economic Power Cycling Into Politics

Following a classical political economy tradition (which Faguet characterizes as a revived, non-Leninist Marxism), institutions are at some level the expression of economic power applied to politics, which then feeds back into economic power in a continuous cycle; treating economic and political spheres as distinct, as much North American political economy does, risks missing the key dynamic of how the world works.