Regressive effects of regulation

DIANA W. THOMAS

PUBLIC CHOICE

Abstract: Regulation of health and safety has placed an unacknowledged burden on low-income households and workers. Billions of dollars are spent every year on regulations that seek to reduce life-threatening risks that arise from auto travel, air travel, air and water pollution, food, drugs and construction; the list goes on. Today, some form of regulation affects nearly every aspect of our lives (Shleifer, in: Kessler (ed) Regulation vs. litigation: perspectives from economics and law, University of Chicago Press, Chicago, 2010). All of the regulatory rules ostensibly intend to make consumers or workers better off, but the cost of regulation usually is borne by the same consumers and workers, reducing their ranges of choice; it therefore crowds out private spending. The crowding out effect can be particularly detrimental for low-income households. This special issue explores the various ways in which regulation may have such regressive effects as well as the political determinants of how regulation, despite its unfavorable consequences for low-income households, may come about.

Takings of Land by Self-Interested Governments: Economic Analysis of Eminent Domain

HANS-BERND SCHÄFER, RAM SINGH

THE JOURNAL OF LAW AND ECONOMICS, Volume 61, No. 3

Abstract: In this paper, we model and examine the effects of two salient features of eminent-domain law and its use. First, the compensation is less than full. Second, the government is not a perfect agent of society. Once these features are taken into account, several claims in the existing literature do not hold. Our results question the fiscal illusion theory. We show that full compensation ensures efficiency neither of the takings nor of the investment decisions. Moreover, departure from efficiency can get worse with the tightening of budget constraints. However, undercompensation, combined with the provision of restitution, delivers a better outcome in terms of investment choices by the owners and the taking decisions and choice of projects by the government. Furthermore, we show that fixed-compensation schemes generally are not efficient even if the government is benevolent, but undercompensation can still deliver an outcome more efficient than full compensation.

Ludwig von Mises on war and the economy

CHRISTOPHER J. COYNE

THE REVIEW OF AUSTRIAN ECONOMICS

Abstract: In 1919, in the wake of the Central Power’s defeat in World War I, Ludwig von Mises published his second book, Nation, State, and Economy. The book explores the consequences of war and the type of political and economic arrangements likely to generate a lasting peace in the future. This paper reviews the book’s key themes regarding the relationship between war and the economy. We make connections between Mises’ insights and contemporary literature in order to demonstrate the continuing relevance of Nation, State, and Economy a century after its publication.

The efficiency of regulatory arbitrage

VLAD TARKO, ANDREW FARRANT

PUBLIC CHOICE

Abstract: Classic public choice skepticism about the regulatory state, based on theories of rent-seeking, rent extraction and regulatory capture, is based on the unrealistic, and usually unstated, assumption of a monopolist regulator. In practice, the regulatory state is polycentric, involving numerous quasi-independent agencies with overlapping responsibilities. This has led to a more optimistic picture based on the idea of regulatory arbitrage: when firms can, to some extent, pick and choose their preferred regulator, regulatory agencies are constrained to deliver relatively efficient regulatory policies. In our view, this optimism is also unrealistic. We build a family of models that explores the possible regulatory outcomes, and use some aspects of Gordon Tullock’s critique of the common law as a conceptual foundation for the analysis of the efficiency of a polycentric regulatory system.

The physiological basis of psychological disgust and moral judgments

TRACY, J.L., STECKLER, C.M., & HELTZEL, G.

JOURNAL OF PERSONALITY AND SOCIAL PSYCHOLOGY

Abstract: To address ongoing debates about whether feelings of disgust are causally related to moral judgments, we pharmacologically inhibited spontaneous disgust responses to moral infractions and examined effects on moral thinking. Findings demonstrated, first, that the antiemetic ginger (Zingiber officinale), known to inhibit nausea, reduces feelings of disgust toward nonmoral purity-offending stimuli (e.g., bodily fluids), providing the first experimental evidence that disgust is causally rooted in physiological nausea (Study 1). Second, this same physiological experience was causally related to moral thinking: ginger reduced the severity of judgments toward purity-based moral violations (Studies 2 and 4) or eliminated the tendency for people higher in bodily sensation awareness to make harsher moral judgments than those low in this dispositional tendency (Study 3). In all studies, effects were restricted to moderately severe purity-offending stimuli, consistent with preregistered predictions. Together, findings provide the first evidence that psychological disgust can be disrupted by an antiemetic and that doing so has consequences for moral judgments.

The age of mass migration in Latin America

BLANCA SÁNCHEZ‐ALONSO

THE ECONOMIC HISTORY REVIEW

Abstract: The experiences of Latin American countries are not fully incorporated into current debates concerning the age of mass migration, even though 13 million Europeans migrated to the region between 1870 and 1930. This survey draws together different aspects of the Latin America immigration experience. Its main objective is to rethink the role of European migration to the region, addressing several major questions in the economics of migration: whether immigrants were positively selected from their sending countries, how immigrants assimilated into the host economies, the role of immigration policies, and the long‐run effects of immigration. Immigrants came from the economically backward areas of southern and eastern Europe, yet their adjustment to the host labour markets in Latin America seems to have been successful. The possibility of rapid social upgrading made Latin America attractive for European immigrants. Migrants were positively selected from origin according to literacy. The most revealing aspect of new research is showing the positive long‐run effects that European immigrants had in Latin American countries. The political economy of immigration policies deserves new research, particularly for Brazil and Cuba. The case of Argentina shows a more complex scenario than the classic representation of landowners constantly supporting an open‐door policy.

Locke, Nozick and the state of nature

JUSTIN P. BRUNER

PHILOSOPHICAL STUDIES

Abstract: Recently, philosophers have drawn on tools from game theory to explore behavior in Hobbes’ state of nature (Vanderschraaf in Econ Philos 22:243–279, 2006; Chung in J Am Philos Assoc 1:485–508, 2015). I take a similar approach and argue the Lockean state of nature is best conceived of as a conflictual coordination game. I also discuss Nozick’s famous claim regarding the emergence of the state and argue the path to the minimal state is blocked by a hitherto unnoticed free-rider problem. Finally, I argue that on my representation of the Lockean state of nature both widespread conflict and lasting peace are possible. This, I contend, is in line with one popular interpretation of Locke (Simmons in Polit Theory 17:449–470, 1989).