How to import modern Western Institutions Suppresses Economic Growth?

The Guide to the Book “Institutional Constraints on Modern Economic Growth” uploaded at SSRN and at RePEc. The Russian edition was published in 2011 in “Delo” publishers. Projected title of the book English version is “How to import modern Western Institutions Suppresses Economic Growth?” The “Guide” contains shortened version of Introduction and the chapters annotations (with relevant references on SSRN / RePEc for chapters already translated to English).

“I believe that the United States today is not an appropriate model for Mexico or other low-income countries…. There have been no summits about how you privatize governmental activities. You have seen summits about how to raise taxes, about spending more of the taxpayers’ money, about how to impose more controls on the people. That is the sense in which I say, take as your model the U.S. in its first 150 years. We can afford our nonsense now because we had so long a period during which to build a base. You can’t.” wrote Milton Friedman in 1994.

The book contains specification of the principal cases of “nonsense”. The authors are searching for historic records of “damaged” institutions, their roots and causes of the damages, tracking them to universal suffrage rising and to the earlier, pre-capitalist institutions, in order to develop policy advice for new generation of reformers.

Posted in Data Economic Growth in Very Long Run, Institutions preventing economic growth, Private property and private owners' rights, Public choice, Pure & Mixed Public goods | Tagged , , | Comments Off on How to import modern Western Institutions Suppresses Economic Growth?

Why some minorities are more equal than others?

Why not all minorities are “minor enough”; why unfair enforcement is fair for somebody: here is 1st draft of the new paper “The Puzzle of Selectivity in Fighting Discrimination: A Public Choice Approach”. Advocates of the war against discrimination and affirmative actions’ supporters claim it all is necessary to set up additional regulatory procedures that will defend interests of minorities who, previously, were not given enough chances to succeed. Because there is no set definition of a minority who suffered from discrimination in the past (Historically Excluded Groups [HEGs] consider all women to be a minority), law-enforcement practices are to a large degree dependent on precedence (judicial authorities) as well as the behavior of bureaucrats who have the authority to defend people against discrimination. Incentives and the true criteria for choosing minorities will be analyzed in this report.

There are practices in the USA and Israel, as well as statistics of EEOC practices (a committee on equal rights in hiring, that is a kind of specialized public prosecution office) supporting the hypothesis that the main anti-discriminatory activity aims to mobilize groups who traditionally voted against a limited government, to vote for a nanny state that provides cradle to grave care. See the paper The Puzzle of Selectivity in Fighting Discrimination: A Public Choice Approach at SSRN.

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What these parties stand for, really? XX Knesset Elections

Why people less and less interested in the parties’ electoral platforms? Why Leftists in spite of numerous failures in security (“Peace Process”) and in spite of poor performance in economic issues are going on in pushing their radical ideas and Rightist so easily surrender their positions?
In proposed short paper we propose our explanation to this phenomena and provide short review of party positions on 11 issues:
1. The judicial / court system reforms
2. Private property, including Real Estate safeguards
3. Taxation / new Governmental spending (mandatory), budget balance / deficit
4. Business climate / business regulations
5. Arabians, Arabian autonomy, Judea, Samaria and Jerusalem statute solution,
6. Freedom of speech, freedom of press and media-market
7. Education
8. The IDF statute, tasks, functions and responsibilities, “new military justice” and politicized prosecutions problem;
9. Self-defense and 2nd amendment (Right to bear Arms)
10. Family, Government intervention “to protect” wives against husbands and children against parents
11. Illegal immigration
We are focusing on parties’ bills sponsored activities in Government, not on their platforms, first and foremost.

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Revisiting Terrorism studies: new papers’ 1st draft

We had started a series of short studies of terrorism “supply” and counter-terrorism “under-supply” incentives since 2004. After few years of break we returned to the issue starting with well forgotten story: how Oslo “peace” process was explained and advocated by needs to stop Arabian riots – so called 1st Intifada. So, here is very preliminary draft of new paper focused on the issue: how well founded were the decisions, made in 1992-94 to introduce radical changes in the terror-fighting strategy of Israel (switch from deterrence of terror to appeasement of terrorists).
The First Intifada, the Oslo Accords, and the Escalation of Terror: Causalities Revisited” (January 15, 2015). Available at SSRN:

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How to measure Democracy and Economic Freedom?

How to measure Democracy? See Polity Indices! How to measure Economic Freedom – see EFW Indices.

How to measure Political institutions quality for better assessment of economic growth dependency on the Freedom and on  Democracy? Try ours’ indices.
One, who searching for assessment of Democracy quality at Polity could be discouraged by some comparisons:
A few “Marker” Regimes Regimes:  The Kingdom of Denmark prior to 1834, Prussia during the same period, and many other European monarchies (-10),[1]Russian Empire and Norway prior to 1905; during the same period (-7); US-, British-, and French-occupied zones of West Germany in 1945-58 (-6); the Netherlands of the first half of the 19th century (-6 – -7)

Let compare with: The Chinese Empire of the early 19th century – 6; Stalinist USSR 1933-1952 -9; Maoist PR of China 1948-1975 (-8-9); Hitler’s Germany (-9)
“Democratic Cambodia” (Cambodia ruled by the “Khmer Rouge”) -7 – unique case of negative political competition: citizens competed for inclusion in the unique one million selected for survival (rather than the authorities or political parties competing for citizens’ support, or at least both citizens and politicians being “indifferent” to each other with zero-level competition, and so on).
The Russian Federation 1992 +5; 1993-99 +3 The Russian Federation 2000 – 2006 +6; 2007-2010 +4

[1] As a rule, different forms of consultative estate representation were in evidence in these countries, from the local level to the state; freedom of exit, including the evidently more free countries, relative freedom of entrepreneurship and hire, relative protection for private life and property; absence of anything even remotely resembling mass repressions against potential opposition (USSR, China) or even persons potentially capable of doubting the rightness of actions undertaken by the authorities (Democratic Cambodia). In Norway (-7), a constitution thoroughly liberal by the standards of the time was in effect, and served as a model for the requirements for a liberal constitution in Denmark (Busk, Paulssen, 2007).
So, We developed simplest and better fit for comparative analysis indicators. See for details:

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Why modern armies of Democratic countries fail to win a war?

How safe is it, to Confuse Defense with Care?

available at:

The correlation of state spending on pure and mixed public goods reflects the making of fundamental choices about state functions.  The statistics data and the cases are composing the picture of Jihad to destroy the Army conducted by Left politicians and by civil bureaucrats. The material collected rises question:  Are pure public good “defense” normal quality provision compatible in Long Run with heavy  spending on social sector (i.e. compatible with  mixed public goods provision)?


The case study (Protocol 1, June 8, 1977, to the Geneva Convention of 1949) shows, how “punishment for military success” strategy undermines incentives of army officers, making the military machine virtually inoperative.  Artificially abridged Army capability provides the argument for the notion “war is no solution”.  The set of the governments credibly ready to obey ratified Convention, are clearly segmented on two subsets. The 1st one includes the Governments bearing military responsibilities, military umbrella -givers, which abstained to impose all Protocol caused risks on the army officers (non-ratified – USA, Israel; ratified with strong reservations – UK, France, Germany) and the rest democratic countries – which are military umbrella takers, ratified the Protocol without significant reservations.

Statistical analysis of Great Powers military spending historical trends used to test the main hypothesis. Preliminary statistical analysis fails to reject it. We believe bureaucratic competition for the responsibilities, staff and the budget provides satisfactory explanation of this phenomena.

The paper provide us explanations for a growing number of failures of well armed and well trained armies of democratic states to win the wars.

Posted in Foreign Policy & Intl relations, Institutions preventing economic growth, Pure & Mixed Public goods | Tagged , , , , | Comments Off on Why modern armies of Democratic countries fail to win a war?

Elections as a choice between terrorists’ gangs

Could be Democracy a “quality good” (in economic sense) for somebody, in the violent conflict zone? Sure, and here is some evidences from Arabian Autonomy (Israel) and Chechen Republic (Russia): (: Democracy: a Conflict Extinguisher or a Fuel for Terror?).

The paper originally presented at Public Choice 2006 conference.  The paper originally presented at Public Choice 2006 conference just updated and uploaded at SSRN.

Attempt to establish democracy (elections) before tradition to revere human life, dignity and property has deeply rooted failed as well.  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.



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IDF “Protective Edge” in Gaza – déjà vu

Israel Defense Forces (IDF) just started new operation “Protective Edge” against HAMAS terrorists in Gaza.
The most prominent right-wing leader in Israel – Knesset vice-speaker Moshe Feiglin loudly objected the operation (The Knesset security Commission seating in Sderot – discussion in Hebrew – last minute). He insists, until the Israel will be ready to drop the Oslo agreement –  no reason to waste time and resources for operations of this sort. It means, Israel should to resettle Gaza, to cover the region by full-fledged provision of law and order for unlimited long run period. It means, first to annex, then to enter Gaza – once and forever. The operation, on Feiglin’s opinion, could just defend failing “Peace Process” and to deliver to “dovish activists”  more pretexts to harass  IDF officers and soldiers for their well done job.
Latest situations’  development: HAMAS broadly uses alive shield already. The IDF officers’ problems with new-fashion military “justice” are coming soon.
Just for reference: Geneva Convention (IV) relative to the Protection of Civilian Persons in Time of War (original version) leaves all responsibility for “protected persons” (civilians’ lives) on the side which uses “alive shield”. USA and Israel never ratified Protocol 1, June 8, 1977 which reversed the situation (see for details Leftist extremist both in US and in Israel try to press the Armies to behave as if our countries did ratified Protocol 1 and treaty on International criminal court. For some details and history of dynamics of military Justice and enforcement practices in Israel and motivation behind it see  (2008 Cast Lead IDF operation in Gaza described in this paper – so you could compare with current situations’ development).
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Immigration: Choosing an Adaptation Strategy: report at SSRN

Modern approaches to immigration policies in most developed countries make the problems of adaptation for new arrivals more severe. Protracted failure to adapt among immigrants (and even of their descendants) turns into recurrent problems vis-à-vis the law, and even extends into large scale incidents. With time, immigrant failure to adapt intensifies, while its localization in space extends to increasingly larger areas.

Motivation for maintaining non-selective and non-working immigration are available in plenty for many bureaucrats and “leftist politicians”. In conditions of immigration of this kind, many of the immigrants become recipients of state aid, turning into a manipulated electorate. In essence, we are here talking about importing manipulated electorates from countries which lack democratic traditions.

The cases of Canada and Australia demonstrates that the mechanism of selective immigration allows for an optimal combination of satisfying labor market needs with moderate costs of adaptation for the new citizens. This means that the costs are moderate for all: for the new immigrants, for their neighbors, and for society as a whole.

The full text is downloadable from SSRN:

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US Aid for Israel special interest groups: Updated version at SSRN

New, updated version of the paper, presented firstly at this very web-site, now uploaded and downloadable (free) 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.

Keywords: Political conditionality, Special interests, Political leverage

JEL Classification: D74, D78, D72, F35
working papers series

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