Wednesday, 27 January 2016

Shortages and rationing: marriage edition

During times of shortage and crisis, everyone hates a price-gouger. And sensitive types argue for rationing and sharing rather than allocation by prices. Sure, prices might be more efficient, but they could induce social disruption. Allocating suddenly scarce resources by ability to pay confers rents on owners of the suddenly scarce resource. And the merits of allocation by price are smaller if supply constraints mean that you can't draw new supply into the market.

And so we come to Eritrea's man shortage. Let's take all the reporting here at face value - I've not verified any of it, and it could all be wrong. But it's interesting.
In what could pass as an ‘April Fool’s Day’ prank, activists have posted a memo on Facebook allegedly from the Eritrean government asking men to marry at least two wives due to an acute shortage of men occasioned by causalities during the civil war with Ethiopia.

A copy of a scanned decision of the Grand Mufti surfaced on the social media site on Thursday last week and showed the State of Eritrea calling for all men in the country to marry at least two wives and the government assuring that it will pay for the marriage ceremonies and houses.

The document, which could not be independently verified, says any man or woman who oppose the decision “will face a life sentence”. A Standard report showed that activists had translated the memo — written in Arabic — to:
“Based on the law of God in polygamy, and given the circumstances in which the country is experiencing in terms of men shortage, the Eritrean department of Religious Affairs has decided on the following: “First that every man shall marry at least two women and the man who refuses to do so shall be subjected to life imprisonment with hard labour. “The woman who tries to prevent her husband from marrying another wife shall be punished to life imprisonment.”
More than 150,000 Eritrean soldiers were killed during the secession war from Ethiopia between 1998 and 2000. At the time Eritrea had about four million people.
Ok. The recent war means they have a shortage of men relative to women. So consider the marriage market.

When there are more men than women, the women who are richest - who have the bundle of characteristics most valued by relatively scarce men in the Eritrean marriage market - will be able to afford husbands. And the poorest women will go without.

The law here forbids rich women, where rich means possessing the scarce resource, from hoarding husbands. Instead, the government's requiring that sharing be an option.

Isn't this a form of anti-gouging, pro-sharing legislation that, in other contexts, is usually lauded? It prevents scarce single men from exercising market power because already married men are forced into the market and compelled to be suppliers. It ensures that poorer women have access to the scarce resource, at the potential expense of richer women who are hoarding the scarce resource. And, presumably, the government will rescind the compulsion when the shortage has eased - otherwise they could run into the opposite problem.

Now, I'm a fan of the price system and am sceptical of anti-gouging arguments. And so I don't like the government compulsion here - as I don't like other anti-gouging legislation. Allowing sharing can be a reasonable solution where it's otherwise banned; we could well expect it to emerge naturally in some contexts. But compelling it makes me nervous - in this as in other markets.

Postscript: If you haven't read Marina Adshade's take on polygamy in her excellent Dollars and Sex, you should. Perhaps a future edition will consider the equilibrium where both polygamy and polyandry are allowed. She expects polygamy would result in a cohort of single men. But if women could also take on multiple husbands, that does not necessarily follow.

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