September 4th, 2021

Red Coyote

ODIOUS DEBT

Haiti won independence from France in 1804, but in return for recognizing its formerly enslaved colony, France later forced Haiti to pay an indemnity of 150 million francs and give preferential treatment to French exports. The debt was equivalent to 270 percent of GDP—Haiti only paid off its debt in 1950.

Considering the absence of Haiti in larger conversations around sovereign debt, a new paper by Kim Oosterlinck, Ugo Panizza, Mark C. Weidemaier, and Mitu Gulati argues that Haiti’s debt should be seen as odious. The authors make the case that Haiti paid an exorbitant cost on an illegitimate debt, and that the nation is entitled to reparations.

From the paper:

"By any reasonable definition, the Haitian Independence Debt would seem to be odious. The circumstances suggest coercion, as does the fact that the agreement obliged Haitians to pay compensation for the freedom they had already won. The amount has been reported at around 300% of Haitian GDP (270% in our estimates), and it was understood that Haiti could pay only by borrowing vast sums from French banks, thus transforming the indemnity into a debt burden that would persist for generations. The debt cannot reasonably be characterized as in the best interest of the Haitian people. Yet we see little mention of it in the literature on odious debt or, indeed, in the larger literatures on sovereign debt or debt and development. To be sure, authors writing in French examine the intertwined history of Haiti and France and often discuss the Haitian Independence Debt. Likewise, articles in the popular press occasionally ask whether France owes compensation to Haiti for the episode. But these discussions have not yet made their way to the general sovereign debt literature or into the sub-field examining the doctrine of odious sovereign debt. Nor have they prompted a deeper examination of whether that doctrine should extend to debts imposed by former imperial powers in the context of independence and decolonization.

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May 12th, 2020

The Giant

GREATER SHAPE

Public opinion and policymaking

Covid is changing popular attitudes towards the public sector, prompting many commentators to anticipate a new period of welfare expansion. Others are more skeptical, noting that public opinion undergoes rapid fluctuations, which rarely resolve into a new equilibrium.

Like its forebear in debates over the 1981 Meltzer-Richards model, the present discussion assumes a strong relationship between public opinion and policymaking. A 2012 book by political scientist MARTIN GILENS demonstrates the flaws underlying this assumption.

From the book:

"Democracy is commonly understood to entail a substantial degree of political equality. This ideal of political equality is perhaps impossible to fully achieve in the face of economic inequality—in every democracy citizens with greater resources are better able to shape government policy. But the degree of political inequality in a society tells us much about the quality of the society’s democracy. I aim to document and explain patterns of representation in the United States over the past few decades by examining the relationship between the policy preferences expressed by the American public and the policies adopted by decision makers in Washington. To do so I have assembled a dataset of survey questions reflecting the policy preferences of hundreds of thousands of Americans at different income levels on all sorts of government policies—from raising the minimum wage, to restricting abortions, to sending U.S. troops to Bosnia.

When preferences across income groups diverged, only the most affluent appeared to influence policy outcomes. Representational inequality was spread widely across policy domains, with a strong tilt toward high-income Americans on economic issues, foreign policy, and moral/religious issues, and only modestly greater equality of responsiveness to the middle class and the poor in the social welfare domain. Even this partial exception to the dominance of the affluent was accounted for by the fortuitous confluence of preferences between middle-class citizens and powerful interest groups on issues like health care, education, and Social Security. Yet the importance of political conditions in shaping responsiveness means that our political destiny is not predetermined. The obstacles to enhancing representational equality in America are considerable, but the costs of not doing so are considerable as well."

Link to the publisher's page.

  • Jacob Hacker and Paul Pierson's much-cited Winner Take All Politics outlines the mechanisms of policy influence in the US. Link.
  • A new paper by Matias López et. al examine the economic and social factors which shape elite attitudes towards redistribution in Brazil. Link. h/t Paul
  • "In 1893, the historian Frederick Jackson Turner famously argued that the American frontier fostered individualism. We investigate this thesis by tracking the frontier between 1790–1890 and constructing a novel, county-level measure of total frontier experience (TFE). Long after the closing of the frontier, counties with greater TFE exhibit more pervasive individualism and opposition to redistribution." Samuel Bazzi, Martin Fiszbein, and Mesay Gebresilasse on the historical roots public opinion. Link.
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