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PaperclipPerfector  2yr ago (text post)   39645 thread views

Culture War Roundup for the week of June 5, 2023

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Yes, the relationship between political systems and structural reforms is fascinating and underrated. For example, developed countries with first-past-the-post systems were generally quicker in reforming in reaction to the 1970s slowdown. The UK, New Zealand, and Australia undertook reforms to labour markets and welfare faster than e.g. Germany. The US was somewhere in between, as a FPTP system designed for divided government.

Proportional representation, federalism, and US-style divided FPTP slow down going in the wrong direction, but also make it harder to make tough choices.

e.g. Germany

In fairness rather than PR/FPTP surely the most obvious factor here is that Germany was not hit anywhere near as hard by 1970s inflation as the rest of the West; after all, without the Winter of Discontent Callaghan probably struggles on as Prime Minister, and while yes he was reforming somewhat too, he hardly would have carried through a Thatcherite programme.

Possibly, though I was thinking more about growth and unemployment, which are more much more affected by structural reforms than inflation. On the other hand, it looks like it wasn't until the late 1990s that things became really dire in Germany: https://fred.stlouisfed.org/graph/?g=160vv

It seems federalism should on net speed up decision making if local localities actually can make decisions. For example the Swiss cantons seem responsive.

Perhaps ceteris paribus, but it depends on the incentives of local governments. If it's to extract resources from the centre, then they will make rapid decisions - to push for local special interests.

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