Sunday, 31 August 2014

Ethical government

What is fair and reasonable for a government to do? That's one of the big questions underneath the Dirty Poltics scandal.

The group that Nicky Hager exposed unethically nobbling candidates for party selection is certainly not the only one to have done that kind of thing. There are serious ethical questions about this stuff across the political spectrum.

But as Judd Hall's whanua and Simon Pleasants and Tania Billingsley know, it's not just aspiring politicians that get knifed under the current system. It's anyone inconvenient.

So there is a much more general and important issue here, about how our politicians behave, to us mainly but also to each other. In previous waves of reform, "we" (our MPs) have tied the hands of government financially, through measures such as

  • the Fiscal Responsibility Act. which is like an information disclosure regime for the government; and
  • the Reserve Bank Act which delegates monetary policy to technocrats.

I like both of these laws for the transparency and discipline they provide. They seem like part of our constitution. The rules are clear and if someone tries to circumvent or fiddle with them we have a clear standard to which we can appeal.

Why don't we have something similar for political ethics? Some simple and clear principles that constrain the way governments conduct themselves and their interactions with the rest of us.

It could be like the codes of conduct we have in many other professional sectors like medicine and accountancy and law. Politics is at least as important to our overall wellbeing as these professions yet there is no agreed ethical code. Why not?

Monday, 18 August 2014

Milk and bullshit

In an early reaction to Nicky Hager's book Dirty Politics, Rocky picked up on the politics of breastfeeding. It alarmed me to see Fonterra linked to a campaign to denigrate breastfeeding, so I asked them about it on twitter.
After a couple of less than fulsome replies, Fonterra eventually came up with this.
which pleased and satisfied me until this happened
Which made me angry enough to go digging....

It turns out that the Philippines Department of Health issued a memorandum 
prohibiting multinational firms that manufacture infant milk and other nutrition products in the country from using registered trademarks that may erode the efforts of the government to promote breast-feeding
That could sound a bit rough - trampling on trademarked IP. But the court found it lawful and in line with Health Department's the duty to impose
reasonable regulation of an industry which affects pubic health and welfare
The background is interesting and relevant. It seems that the trademarks in question include dodgy material, so the Health Department sought a ban on
the use of trademarks that contain health and nutrition claims that may undermine breast-feeding and breastmilk on the labels of infant formula
This was particularly concerning given the results of a recent survey 
Based on the data, only 34 percent of Filipino infants less than six months of age exclusively breast-feed, thus, leading to under nutrition. It attributed the weak breast-feeding culture to the manufacturers and distributors of infant formula and other breastmilk substitutes that have taken undue advantage of the loopholes in existing laws relative to breast-feeding and infant and young-child feeding. 
.....milk companies are able to glamorize infant formula and breastmilk substitutes through false health claims and other attractive marketing strategies that are deemed to undermine breast-feeding.
There is a sizable market for infant formula that I'd be happy supplying. Sometimes it is needed and sometimes it is just convenient. But it seems wrong and nasty to be promoting infant formula to a mass market, particularly if you're smuggling your messages in through trademarked images.

The Philippines infant formula suppliers' club IPNAP (which includes Fonterra) opposed this memorandum, provoking the court case which it lost. This action alone seems in stark conflict with to the WHO-sponsored International Code of Conduct of Marketing of Breast-milk Substitutes, to which IPNAP pays lip service.

So what the hell is going on? Is Fonterra feeding us bullshit? Does it have systems in place that actively monitor its obligations under the International Code? Where does it report on that monitoring? We need some answers.

Friday, 15 August 2014

No sympathy for the devil

What do you think about this?

This was motivated by compassion for a clearly damaged person which is very sweet indeed. It got me thinking about unusually annoying kids - the ones who delight in getting they own way by manipulating and/or bullying others. Most of us have known kids like that and I assume we all have a bit of a crack at getting them straightened out.

They are often self-obsessed to the point of preferring to wreck stuff to get noticed, and creative/entrepreneurial over how they do the wrecking. I've been told that some of these kids have incurable mental illnesses and maybe they do but they seem like naughty brats to me.

I reckon they could be straightened out by forcing them to face appropriately serious consequences for anti-social conduct. Even if that doesn't cure them, it is fair.

Wednesday, 6 August 2014

Scientific competition

Most would probably agree that it was a good idea for New Zealand to appoint a Chief Science Advisor back in 2009, and that doing so has raised awareness of the way of science stimulates innovation, which in turn is the potential source of many benefits. But science policy in general is rather less loved, judging by a recent survey of scientists. Here, for example, is the summary of responses to question 3.

I guess the idea of "National Science Challenges" stemmed from the popularity of innovation competitions generally, which sometimes amount to outsourcing an R&D task (as Netflix did) and other times aim to promote entrepreneurship generally such as the Spark competition at the University of Auckland. Maybe if you surveyed everyone who entered those competitions you might also find lots of people were not terribly gruntled and a few (the winners) who loved it.

But the nature of science adds a couple of extra dimensions here.

First, as Stephan's essay on the economics of science notes(pdf), the normal practice of science is a highly competitive, winner takes all affair. The imperative of getting "there" first is strong enough to make scientists secretive, possessive, perhaps even jealous and devious in their dealings with "colleagues". Participating in another winner-takes-all competition might not be too thrilling against that backdrop.

Second, while these people are highly skilled professionals, their job security in New Zealand is not great. Unless the research funds continue to flow, the job might not last long. And they're vulnerable to idiosyncratic decisions like the closing of Invermay. In that context, the funds on offer in these science challenges might look more like desperately needed resources than some cool extra fun.

In normal markets, competition doesn't always stimulate innovation: if it is too intense, there is no money to pay for R&D; and if it's absent there is no need to bother. So innovation doesn't happen so much at those extremes. I suspect something similar might apply to science in NZ, with the best way to promote scientific innovation requiring more of a balance between job security and competition.

Tuesday, 5 August 2014

Planner induced madness?

Planners hold the main advisory role in local government zoning decisions. They're a well-meaning bunch but they can drive economists to distraction because they often don't analyse trade-offs in any detail. As a result, they can come across as being driven by the subjective preferences of themselves and their friends.

I'm wondering if perhaps this planner-induced effect is partly responsible for the local government finance views expressed by NZ Initiative director Oliver Hartwich in this excellent profile. Hartwich said he'd like to
abolish the rates system tomorrow. I would like to introduce a local income tax and give local governments more control
This is a very strange proposal for anyone familiar with taxation economics. Most taxes make us change the things we do. For example, you face an income tax of 60%, you might work a bit less than if the rate was 30%. That reduces the total value created by working, which is an efficiency cost. The more price sensitive something is, the greater the efficiency loss from taxing it.

This is why it is more efficient to tax real property than flows of income or spending: you get less behavioural change so smaller efficiency losses. There are other benefits too, for local authorities: it's easier to do and (compared with an income tax) your tax base can't get up and relocate to another jurisdiction.

What would we gain for all that inefficiency cost? Hartwich seems to think it'd give councils better incentives to promote house building. He got this idea from Europe where he reckons that
local councils who were funded by rates had perverse incentives to limit development, as new projects added to infrastructure costs without directly boosting council coffers.
I think perhaps he is unaware that in New Zealand councils routinely charge developers fees that are designed to recover the extra infrastructure costs, so there is no such perverse incentive here. It might also be worth noting that there are 67 councils in New Zealand who would have rates funding abolished, but more house building isn't a pressing issue anywhere except Auckland and Christchurch.

So I'm hoping this idea is examined more closely and unless there is a lot more benefit lurking somewhere, I'd expect it to die at that point.