Monday, February 29, 2016
Why are big cities in America, stagnant, poverty-ridden, long-established Democrat monopolies ?
We call this strategy—increasing the relative size of one’s political base through distortionary, wealth-reducing policies—the Curley effect. But it is hardly unique to Curley. Other American mayors, but also politicians around the world, have pursued policies that encouraged emigration of their political enemies, raising poverty but gaining political advantage. In his 24 years as mayor, Detroit’s Coleman Young drove white residents and businesses out of the city. ‘‘Under Young, Detroit has become not merely an American city that happens to have a black majority, but a black metropolis, the first major Third World city in the United States. The trappings are all there—showcase projects, black-fisted symbols, an external enemy, and the cult of personality’’ (Chafets, 1991:177). Zimbabwe’s President Robert Mugabe abused white farmers after his country’s independence, openly encouraging their emigration
even at a huge cost to the economy.
The Curley effect turns traditional views about the requirements for good government on their head. Writers like Olson (1993) argue that sufficiently forward-looking leaders would avoid policies that harm their electorate. But the Curley effect relies critically on forward-looking leaders: when it operates, longer time horizons raise the attraction of socially costly political conduct. Others follow Tiebout (1956) in arguing that large response elasticities to bad policies serve to limit them: ‘‘the fiscal discipline that is forced upon these units [local governments] emerges from the mobility of resources across subordinate governmental boundaries within the inclusive territorial jurisdiction’’ (Brennan and Buchanan, 1980:178). With the Curley effect, in contrast, large response elasticities make bad policies more, not less, attractive to incumbents.
In this article we formalize the Curley effect. By differentially taxing different groups of voters, the incumbent leader can encourage emigration of one of the groups, and maximize the share of the voters who support him. While benefiting the incumbent, these taxes may actually impoverish the area and make both groups worse off."