Rebuilding one bit of state capacity

New Zealand's immigration bureaucracy isn't in the best of shape. 

So it's interesting to read this piece from the Niskanen Center on Biden's refugee resettlement programme, and how it provides an example of rebuilding state capacity. 

President Biden set ambitious refugee resettlement goals—62,500 for 2021 and 125,000 for 2022. However, the U.S. lacked the capacity to meet these targets. The resettlement system, significantly weakened by previous cuts, struggled to reach even 10% of the target. While the policy was clear, the necessary infrastructure was woefully inadequate. There was little state capacity. 

The challenge was clear: How could the U.S. government, along with its global partners and local resettlement agencies, restore a refugee system that had once been a global leader but had since deteriorated? The task required swift action to rebuild the infrastructure, resources, and capacity needed to meet the ambitious resettlement targets set by the administration. It was a race against time to revive a program that, only a few years earlier, had been a cornerstone of U.S. humanitarian efforts.

To understand how the U.S. refugee program rebounded, it’s essential to first look at how it was dismantled. Donald Trump campaigned on the notion that the program posed a security threat, particularly emphasizing risks from refugees from Muslim-majority countries due to what he claimed were inadequate vetting procedures. Shortly after taking office, he implemented a travel ban, paused refugee admissions for 120 days, and reduced the annual refugee admissions target. Each subsequent year, the admissions cap was lowered further, causing over 100 resettlement offices across the country to close.

When COVID-19 hit, the already weakened refugee system collapsed, reaching its lowest point in history. Refugees who had completed the rigorous security and medical checks saw their approvals expire as the program came to a standstill. By the time Joe Biden took office, the resettlement pipeline had been hollowed out. It wasn’t just a matter of restarting the program — it was about rebuilding U.S. state capacity for refugee protection from the ground up. This was far from a simple flip-the-switch scenario; restoring functionality required a comprehensive overhaul. 

Niskanen’s Jen Pahlka identifies three essential strategies for increasing state capacity: 1) recruiting the right people, 2) focusing them on the right things, and 3) reducing unnecessary burdens on their work. This straightforward framework delivers dramatic results and offers a clear lens to understand how the U.S. refugee program was successfully rebuilt.

Probably worth writing up as a proper column sometime.  

What planet are they on?

New Zealand's newspaper chiefs' views on how the Fair Digital News Bargaining Bill works is somewhat at odds with the text of the Bill. 

Google today, admirably, said they'll stop linking to New Zealand news outlets in search if the Bill goes ahead. 

News Publishers' Association's Andrew Holden and Stuff's Sinead Boucher aren't happy about that. But contrast what they say with what the legislation says. 

News Publishers' Association spokesperson Andrew Holden said Google had deliberately misrepresented the legislation in its blog and demonstrated “the kind of pressure that it has been applying to the Government and news media companies”.

The bill would create the environment for media companies to “sit down and have a proper commercial negotiation with ‘big tech’ companies about their use of our journalism”, he said.

The Bill creates an environment for a proper commercial negotiation? Let's look at the Bill.  

Clause 21 lets news media companies apply to the Authority to have a platform registered as an operator. A designated operator must comply with the bargaining code (26), under a duty to bargain in good faith (27), and a duty to participate (31). If the negotiation period ends without agreement it moves into mediation (34, 35). It moves then to final offer arbitration if they fail to reach agreement (39), they submit final offers (45), and the arbitration panel selects its preferred final offer (49). There are matters to which the Panel must have regard (50) but there's no way of forming reasonable expectations about what that Panel might decide. 

Does any of that really sound like 'proper commercial negotiation'? 

If I would like to buy your house, and you do not want to sell me your house at the price I've offered, would proper commercial negotiation mean that it ends there, or that I get to drag you into arbitration where you might be forced to sell me your house at the price I've set as my final offer if the Panel thinks that that number seems fair?

Has Andrew Holden read Section 49 of the Bill or is he deliberately misrepresenting the Bill?

Let's move on. 

“To make it clear, no one is asking Google, or anyone else, to pay for linking to news,” Boucher said.

Oh really?

Here's the preamble to the Bill - the explanatory notes. 

The Authority may only register an operator in respect of a news media entity if, in the Authority’s opinion,—

the operator’s digital platform makes the news media entity’s news content available; and

there is a bargaining power imbalance between the operator and the news media entity that favours the operator and is more than minor or insignificant.

Let's check Clause 22: 

22 Grounds for registering an operator

(1) The Authority may register an operator in respect of a registered news media entity only if, in the Authority’s opinion,—

(a) the operator’s digital platform makes news content produced by the news media entity available to people in New Zealand; and

(b) there is likely to be a bargaining power imbalance between the operator and the news media entity in respect of the terms on which the news media entity’s news content may be made available by the operator’s digital platform; and

(c) the imbalance is—

(i) more than minor or insignificant; and

(ii) in favour of the operator.

(2) When deciding whether to register an operator, the Authority may take into account the following matters:

(a) the size of, and resources available to, the operator and the news media entity:

(b) the extent to which the news media entity is reliant on the operator’s digital platform to carry on its business:

(c) the extent to which the operator is reliant on the news content produced by the news media entity to carry on its business (including the extent to which the operator can substitute content produced by the news media entity for content produced by another news media entity):

(d) an estimate of the benefits and detriments (monetary or otherwise) for the operator and the news media entity of the news media entity’s news content being made available by the operator’s digital platform:

(e) the extent to which the news media entity has been able to negotiate the terms on which its news content is made available by the operator’s digital platform, including—

(i) whether the operator has subjected the news media entity to unfair pressure or tactics or otherwise unfairly influenced the news media entity in respect of news content made available by the operator’s digital platform and, if so, the nature and extent of that conduct; and

(ii) whether, taking into account the particular characteristics of the news media entity, the news media entity is able to protect its interests in respect of the news content it produces:

(f) any other matters that the Authority considers relevant.

If the Authority views a link to a news site with a short fair-dealing snippet of what the story is about as "making news content produced by the news media entity available to people in New Zealand", the platform can be designated.

If there is no intention to capture a platform that simply provides links, it would have been easy to specify that in the legislation. Simply put in a 22(1)(a)(i) that reads something like:

(i) for clarity, linking to a news site by a search engine, or by users of a platform, with or without a short snippet describing the linked story, cannot on its own be sufficient basis for designation as an Operator.  

Without that kind of restriction, I can't see how linking to a news story on its own is guaranteed to be insufficient basis for designation. It doesn't matter whether Boucher says she doesn't want to force Google to pay for links. What matters is whether the legislation precludes that as being sufficient, on its own, for designation. 

Shayne Currie, over at the Herald, also doesn't seem to like Google's offer to stop stealing from them by linking to their news stories. 

But his summary of the state of play in Canada is a bit jarring for those of us who've been following the state of play in Canada. 

Here's Currie. 

What happens in other countries?

Google has been ruled exempt from the Online News Act in Canada, after agreeing to pay an annual sum of money – $C100 million ($119m) – to be shared amongst news media companies.

The Google money will be allocated on a formula based on the journalist headcount at each company.

The money will be administered and distributed by the Canadian Journalism Collective, an organisation set up of independent publishers and broadcasters.

The collective was committed to distributing the funding in a “fair, transparent, and inclusive manner”, said CJC independent board director Sadia Zaman.

“We look forward to working with the full diversity of the Canadian news ecosystem, including traditional print and broadcast organisations, and independent local news publishers, including those who serve indigenous, black and racialised communities and francophone communities.”

It is understood Google would want a similar arrangement here, but for the minister to administer the pool of money.

Any pool of money is likely to be well short of what the media industry believes it should be paid, and even what it receives now.

Media industry representatives have previously stated Google should not be exempt.

You might have noticed a few things missing. 

First, Facebook's withdrawal from news hit small news outlets kinda hard. There's no mention of that at all, but he could argue that this is just about Google's side.

But on Google's side, a lot of what they're paying to avoid designation is recycling of funds they'd already been putting into journalism development. 

If you want to know what is happening in Canada on this stuff, you just have to read Michael Geist. He's the expert in it. He's the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa and has been on this file from the beginning.  

Here was his summary as of 25 September. 

The disaster that is Bill C-18 is by now well known. Blocked news links on Meta platforms have had no discernible impact on Facebook traffic, but it has sharply reduced referral traffic to Canadian news sites and led to the cancellation of millions of dollars in previous agreements with publishers. Meanwhile, the Google money remains in limbo as the sector awaits CRTC approval over the governance of its distribution. With prior Google agreements folded into the new $100 million contribution, some organizations will garner less than they did prior to the legislation. Moreover, as demonstrated by the recent response to a controversial tweet from Heritage Parliamentary Secretary Taleeb Noormohamed or the backlash against a CTV report that stitched together comments from Conservative leader Pierre Poilievre to create a fake clip, the government’s policies have only exacerbated public mistrust of the media with every error viewed through the lens of government funding for the media. Far from preserving an independent press, the policies have actually placed them at greater risk.

 

Loss aversion or mistakes?

Super-neat paper coming out in the AER by Ryan Oprea: Decisions under risk are decisions under complexity. 

The abstract:

We provide evidence that classic lottery anomalies like probability weighting and loss aversion are not special phenomena of risk. They also arise (and often with equal strength) when subjects evaluate deterministic, positive monetary payments that have been disaggregated to resemble lotteries. Thus, we find, e.g., apparent probability weighting in settings without probabilities and loss aversion in settings without scope for loss. Across subjects, anomalies in these deterministic tasks strongly predicts the same anomalies in lotteries. These findings suggest that much of the behavior motivating our most important behavioral theories of risk derive from complexity-driven mistakes rather than true risk preferences.

There are piles of experiments showing what seem to be anomalies from rational choice; behavioural economists lump these into categories like loss aversion. 

But experiments testing for these things require participants to make complicated choices. That complexity can matter.

Oprea sets experiments where people are faced with risky choices, and equally complicated variants of the choices where there is no risk. People have to compute expected value in both cases, and not everybody is good at that on the fly in the lab. In the deterministic treatment, people get the expected value of the choice with certainty. In the risky treatment, they only get it probabilistically. But the computational complexity is the same across treatments.

While the literature interprets the resulting valuations of lotteries as certainty equivalents –

the certain dollar payments subjects value equivalently to risky lotteries – the same interpretation cannot be applied to mirrors which contain no uncertainty. Instead values for mirrors are simplicity equivalents: the simply-described payment amount subjects value equivalently to the more complexly described (but no less certain) mirror. Our question throughout the paper is whether simplicity equivalents have the same properties and suffer the same anomalies as certainty equivalents.

To the degree the classical pattern is indeed driven by risk preferences (i.e. tastes for risk

that cause valuations to deviate from expected value), it should disappear when we remove risk from lotteries in our Mirror treatment. Because mirrors pay expected value with certainty, they effectively induce risk neutral EUT preferences in subjects, making any valuations that depart from expected value dominated mistakes under any rational theory of subjects’ own native preferences. Thus, to the degree this distinctive pattern continues to arise in the absence of risk, we have evidence for an alternative interpretation of the classical pattern: that it is a pattern of systematic mistakes, arising not because lotteries are risky, per se, but rather because they are complex (costly or difficult to properly value).5

Oprea then finds that situations without risk generate the same kinds of patterns that people have interpreted as loss aversion in risky contexts. 

What predicts errors that look like loss aversion etc?

Finally, we collected a number of additional pieces of data in our main experiment that we correlate with the severity of the classical pattern in lotteries and mirrors (see Supplemental Appendix A.5 for details), giving us some insight into the behaviors that drive the classical pattern. For instance, we find that (i) fast decision-making, (ii) noisy, inconsistent choices in repeated instances of the same task and (iii) poor performance on cognitive reflection tasks administered post-experiment are all positively correlated with the severity of the classical pattern. We also asked subjects after the experiment (iv) how likely they believed it was that they made suboptimal choices (measuring “cognitive uncertainty,” a’la Enke & Graeber (2023)), (v) how imprecise they thought their decision-making process was (on a 100-point Likert scale) and (vi) how little attention subjects believe they themselves paid to payoffs and proportions in the descriptions of mirrors (again, using a 100-point Likert scale), and found that all of these were significantly correlated with the pattern too. These results therefore link the classical pattern in both lotteries and mirrors to hasty, noisy, imprecise and inattentive decision-making and suggest that subjects were largely aware that they were making imperfect decisions in these valuations (i.e. in important respects they know they are heuristically valuing these objects). Importantly, this is virtually identically true in lotteries and mirrors: we find highly consistent correlations between the classical pattern and all of these measures in the two settings, reinforcing our conclusion that the pattern is driven by the same behavioral mechanism in lotteries and mirrors.

Putting these strands of evidence together, the twin appearance of the classical pattern in lotteries and mirrors suggests that it represents a response not to risk but rather to the complexity of valuation. Perhaps surprisingly, this complexity does not seem to be primarily rooted in the arithmetic required in valuation, but in other cognitively taxing aspects of the task. For instance simply thinking through how one’s preferences connect to the primitives of lotteries and mirrors and articulating the implications for behavior plausibly requires significant mental effort, even if one has little diffculty with the math once the problem is “set up.” We speculate that subjects make a kind of “extensive margin” choice when deciding how to approach valuation tasks like these, deciding first whether to (i) do a precise, careful job of evaluation, or instead to (ii) casually or informally approximate value using heuristic methods. Following approach (i) requires more mental effort, strain and time than approach (ii), leading many subjects to pursue approach (ii) instead. Auxiliary evidence from Supplemental Appendix A.5 seems consistent with this account, since this evidence shows that features of behavior that we would expect to accompany casual or informal valuation procedures (e.g., hasty, inconsistent, imprecise inattentive and error-prone choices) are highly predictive of the severity of the classical pattern.

Just a super important result. And the kind of test that when it's pointed out, you have to wonder why nobody had tried it before. Great stuff. 

Monkeypox and Medsafe

In a sane world, medicines and vaccines already approved by trustworthy overseas regulators would automatically be able to be used in New Zealand as well.

New Zealand is not sane. But neither is anywhere else really on that standard. Other places are just faster than NZ in getting things approved, with more practicable pathways for expedited review. 

If a medicine is unapproved, it can still be accessed under restrictive provisions of the Medicines Act. Medsafe summarises it here. 

Those restrictions include bans on advertising and marketing. 

Monkeypox has been an obvious risk for some time. Jynneos was approved by the EMA in 2013 for smallpox and was recommended for monkeypox in 2022. It was approved by the FDA in 2019, and given emergency use authorisation for monkeypox in 2022. The "Emergency" in the EUA was the monkeypox outbreak. 

Nobody applied for Medsafe authorisation until 2023.

Medsafe took over a year to approve it, despite its already having been approved in Canada, the US and Europe at the point at which application was made.

It was available in New Zealand through Section 29. However, you can't advertise unapproved medicines. 

The Post noted the difficulties in letting at-risk communities know about the vaccine, because of s29 restrictions. 

 

Radio New Zealand notes that greatest transmission risk is concentrated among men who have sex with men, and those who have sex with men who have sex with men. 

The outbreak from the Queenstown Pride Festival now counts five in total. 

It sure would have been great if it hadn't been illegal to advertise the vaccine earlier and to make it real easy for folks to get the vaccine.   

Or if Medsafe had been required to automatically approve medicines already approved by two others - which would have had it authorised in New Zealand in 2022.

We are ruled by Vogons.

Levine on arbitrage

I should have signed up for Matt Levine's newsletter ages ago; finally did so. 

His bit on the Spotify arbitrage play was magnificent. 

I don’t know, man. We have talked a few times about Avi Eisenberg, the Mango Markets guy, who found a manipulatable cryptocurrency market, manipulated the heck out of it, made tens of millions of dollars, was arrested, defended himself by saying he was an “applied game theorist” who spotted a good trade that was allowed by the market, and got convicted because nobody ever wants to hear a defense like that.6

Please legalise new supermarkets

Jaw-dropping bit from the Grocery Regulator, in interview at Interest.co.nz:

“What we've been told by these players is when they come and they want to open up a large store in New Zealand, the cost to get a spade in the ground is double that of Australia,” he says in a new episode of the Of Interest podcast. 

“Now that is significant. And when they look at 'do we open up a store in Wagga Wagga or Tamworth or wherever in Australia' versus coming to open up in Auckland where there is massive demand or any of the other centres, really, the cost is double that of Australia. And the timeframe often is more than double as well. So when they do their business cases, they look at that and say, 'well, we're going to be better off by going elsewhere rather than here.' Now the government is saying that they're going to change things to make New Zealand more competitive for international players. And that's really what we're looking at.”

The Commerce Commission released its first annual grocery report on Wednesday which revealed ComCom’s efforts to boost grocery competition over the past year hasn’t had much impact. 

Later in the podcast, he says that Costco would already have expanded to more places in NZ if expanding in NZ weren't so freaking hard. 

It shouldn't be surprising that the grocery regulator hasn't chalked any wins as yet. The real problem is largely out of the regulator's hands: RMA, Overseas Investment Act, Council processes. 

On council processes, just look at this clusterfxxk. This is what an incumbent who has been here forever has to deal with: a company that knows the system. If even they can't get through it, what hope for someone who's new to NZ?

Woolworths has backed out of its fight to install a new entrance and signage to its FreshChoice store in Greytown.

It’s left heritage campaigners and business owners, who have spent almost a decade fighting the plans, breathing a collective sigh of relief.

The supermarket giant appealed to the Environment Court after an independent commissioner for South Wairarapa District Council declined it’s proposal to create a new access to the store from Main St in December last year.

The plan included the demolition of the existing house at 134 Main St, the installation of a 8.3 metre-wide new vehicle crossing and an internally illuminated 3.6m high, freestanding sign.

Matthew Grainger, Woolworth’s director of property in New Zealand, said it hadn’t been able to find “a solution that would work for everyone”.

“We simply haven’t been able to reach an outcome that would be satisfactory for the community and viable for Woolworths which is why we’re withdrawing our appeal."

It marked the end of a “diabolical” process that had dragged on for nearly a decade, Gina Jones from the Greytown Heritage Trust said.

Minister Bishop's move to set mixed use by default in places subject to intensification under the National Policy Statement on Urban Development is a great start in opening things up.

But I'd love it if retail grocery had access to the fast-track consenting regime. If an entrant could put dozens of sites up and down the country up for simultaneous approval through that regime, rather than waiting for consents to dribble through over the next decade...

 

Let's ban Mazda Demios and put an end to ram-raids

The post title is obviously stupid, right?

Mazda Demios are pretty common in ram-raids but:

1. Ram raids have started coming down off their peak;
2. People can use all kinds of cars for ram-raids;
3. Most Mazda Demios are not used in ram-raids. Other people drive them too.

Now consider the National Party's proposed "Let's ban disposable vapes and vapes that use non-refillable pods or tanks to put an end to youth vaping" policy.

Disposable vapes are pretty commonly used by youths who vape - more than tanks or pods. But:

1. Youth vaping has stopped increasing (and came down a bit in the most recent Year 10 survey);
2. Youths can use all kinds of devices, not just disposables and non-refillable pods and tanks;
3. Adults use these too. Adults who used them to quit smoking, and who were attracted by the convenience and cost of non-refillable systems. 

The proposed ban is so stupid. 

In late August, I had a column over in the Post on it [ungated here]. I noted the very obvious problems with the proposed ban. The vape systems that are hardest to use would be the only ones left on the market, which will screw things up for adult vapers who can't handle those systems while making it easier for screw-ups to happen. 

The Government will ban vaping products that are more affordable and that are easier to use – for everyone, adults included. The measures seem to be aimed at reducing youth vaping by increasing the cost of vapes. But if the Government wanted to increase the cost of vaping, excise would make more sense than banning specific types of vapes.

Vaping is a lot less risky than smoking, but there are ways for vaping to go wrong. If someone who doesn’t know what they’re doing mixes their own vape fluid in a tank-based system, they could get a higher dose than intended. Or they could experiment with adding things into the mix that should not be there. Or they could let the tank run dry, resulting in overheated coils and potentially noxious fumes.

Self-contained disposable vaping products and pod-based devices avoid those risks. They are designed to avoid hot dry heating coils. The vaping fluid is pre-mixed and cannot be adjusted. But those are the vaping devices that the Government is going to ban.

Let’s say that again. The Government is proposing to ban the safest devices while leaving the potentially riskier ones on the market, and says it is doing this because it wants to protect kids.

The Ministry hadn't yet put up the RIS on the ban. It was fun to read through it - they'd written it before my column, but hadn't released it yet. And they said much the same that I'd said: if you want to target cost, excise or minimum pricing make more sense but there are tradeoffs with that. Banning pods and single-use tanks goes beyond what's needed and will have adverse consequences for adult vapers. 

What did the Ministry say? 

1. Daily vaping has been stable for three years but is high in international perspective;
2. Youths who vape most frequently choose disposables: twice as common as pods, three times as common as tanks)
3. "There is risk that reducing youth access to vapes will lead to higher youth smoking rates"
4. "Actions to reduce youth vaping need to be targeted towards young people and minimise any barriers on adults wanting to access vapes to quit smoking"
5. "While banning disposables may prevent further young people taking up vaping, it may not stop vaping in those cohorts who are already doing it regularly."
6. Existing rules that came into effect end-December ban disposables without removable batteries; this removes most traditional disposables from the market already.
7. Broadening the ban on disposables won't be a material barrier to adults; three quarters of adults use pods and tanks.
8. Cabinet's preferred broad ban brings safety concerns because you're forcing everyone to refill tanks. 
9. "There is also the potential risk that a more comprehensive ban incentivises an illicit market. Whilst not directly comparable, tighter regulation in Australia has seen the rise of a significant illicit market with 87% of Australians who vape reporting sourcing vapes illegally."
10. "accessibility of use for adults who smoke and wish to vape to quit smoking would also be impacted."
11. If the government wants to increase the cost of vapes, excise and/or minimum prices make more sense but have trade-offs when thinking about encouraging adults to shift away from smoked tobacco.

The Ministry preferred the much narrower ban. 

And it's great that they pointed to the risk of illicit market access under a broader ban. Otago's public health people like to pretend that those worries are invented by industry. 

I went through the Ministry's RIS over at Newsroom this week. This will wind up biting National unless they fix it at Select Committee:

And here is where we shift from the measures just being poor policy to also being a political mistake.

Under the previous Labour government, then-health minister Ayesha Verrall had legislated a ban on cigarettes that contain any appreciable amount of nicotine, an annual increase in the age limit for smoking, and reductions in the number of retail outlets allowed to sell cigarettes.

Measures from that legislation had not come into effect by the time of last year’s election. And, to some surprise, the incoming Government’s coalition agreements reversed that legislation while committing the Government to considering a broader range of reduced-harm alternatives to smoking.

Labour strongly opposed the Government’s reversal of its legislation, claiming its legislation was needed to continue the path to Smokefree 2025.

Many ex-smokers use the vaping systems that National is due to ban. Smoking rates could well be increasing again in the lead-up to the 2026 election. If smoking rates are on the rise, Labour will have its choice of rod with which to beat National. It could point to the vaping rules, or to the coalition’s reversal of Verrall’s legislation, or both.

The legislation may provide the Government with a temporary reprieve from parents and teachers worried about youth vaping. But the Ministry of Health’s Regulatory Impact Statement suggests the ban is far broader than is really necessary. If the government does not reconsider its options through the select committee process, it may yet find that bad policy becomes bad politics.

Labour's been curiously silent on this one. 

In other instances in which National set tobacco/nicotine policy that MoH disagreed with, Labour and Radio NZ have been sure it's because National/NZ First are corrupt. Haven't heard from them yet on this one - probably because they're following Napolean's warnings against interfering when an enemy is making a mistake.