Afternoon roundup

The tabs!

• “Is it unfair on everybody else that has paid for that road and doesn't use it? I mean, this equity stuff's bollocks, this is about traffic. ...Consultation’s bollocks as well.” Mayor Brown ain't wrong.
• Predictions that Labour and Te Pati Maori will strike a deal where TPM seeks only the electorate votes in Maori districts and Labour seeks only the party vote in those districts. Biggest question is why MMP has avoided these kinds of rorts so far. They're the obvious play. 
• Good time to be a liquidator.
• 35 kilograms seems like a lot of cocaine to seize in one go for a country of 5m people. Are there reasonable measures of demand elasticity? One could perhaps work out the size of the market based on price movement. If the price doesn't move much, either the market is huge or suppliers are able to quickly plug even a 35kg hole. If it moves a lot and stays high for a long time, less so.
• My normal drill on carbon forests and biodiversity is that if you want more biodiversity, don't screw up the ETS accounting - use a separate policy instrument. But if this is right, then biodiverse forests sequester more carbon. And if it also applies to NZ forests, then making sure the settings accurately reflected sequestration would encourage greater biodiversity. 
• Don't envy Shane Reti this hospital pass. The health system is not in good shape. 
• Works in Progress on Upzoning NZ
• Maybe post-prison half-way houses should be next door to judges' primary residences. Skin in the game and all that.
• NZ needs a dedicated agency whose only task is infectious disease. Indeed.
• Andrew Norton on Australian attempts to centrally plan higher ed.
• Why We Need Taiwan.
• Mercatus on cutting zoning down to size. Tons of good stuff in here on problems with single-family zoning. 
• Good News! New Zealand is at less of a competitive disadvantage relative to Australia! Bad news: it's because they dropped by more than we did.

Coalitions mean plausible deniability

Who knows what the true model here is. Whatever the true model, we simply don't know whether statements by New Zealand's Foreign Affairs Minister represent New Zealand foreign policy.

Here's Richard Harman. You should subscribe to his newsletter if you want to keep track of what's going on in NZ politics:

The Prime Minister, Jacinda Ardern, confirmed yesterday that she did not see Winston Peters’ major speech on NZ-US relations before he delivered it in Washington, DC, on Saturday.

The speech has raised questions about whether New Zealand is moving its foreign policy closer to the Trump administration and away from the independent stance it has pursued since the ANZUS breakdown in 1985.

It has surprised observers in Wellington that such a major speech could be delivered without at least the Prime Minister’s prior approval and probably that of the Cabinet as a whole as well.

And it has left unanswered, questions as to where New Zealand sits between the United States and China.

Harman has lots more at the link.

So it's impossible to tell whether Winston's speech represents the current view of the government, whether it's Winston off on a branch, or whether it's a deliberate coalition strategy to have someone who can be dismissed as the crazy uncle cozying up to the US to let other parts of the coalition stay friendlier with China: "Oh, that's just Winston. You have to forgive him. They're retail politicians. Retail politicians can get away with anything here. They just have to remind people that they're retail politicians when they're doing it."

The thing I hate most about MMP is the diffusion of responsibility. Given the limits of voter attention, the best we can hope for is that they dish out reward or punishment appropriately come the election, and that fear of that constrains government. But when everyone and no one is responsible for policy, that is a bit harder.

For a teal coalition

So. All of Left-Twitter figures that anyone wanting a blue-green coalition are either shills for National who want to destroy the Greens, because coalition would destroy the Greens, or useful idiots for those shills.

Count me as one of the idiots then, because some of the objections just aren't making sense to me - or if they are right, they perhaps don't work in the way that's being suggested.

Received Wisdom from Twitter-Left is that if James Shaw were to bring a substantive environmental policy offer to his party's members for approval, the act of doing so would destroy the Greens by bringing to the fore an internal schism between the Greens' social and economic left, and the Greens' environmentalists. The differences between those groups can be papered over in opposition, but cannot be in any coalition other than one with the left. And simply presenting an offer would reveal the Greens' leader as a traitor to the Left faction.

Let's suppose that's the case - I certainly don't have particular insight into the Greens' internal workings.

But if it is true, then that is also a terrible opportunity for anyone who did want to destroy the Greens: offer a very substantial environmental policy bundle, knowing it would not be brought to the Greens members. Failure to present the option to the members, for the environmental wing, should be as strong a betrayal as presenting the option would be for the left wing. This should be the case except where preference intensity among the Greens' left is much stronger than preference intensity among the environmental wing - which is possible. Pre-commitment to preferences for self-destruction over deviations from a pure line might be part of that.

That then gives National a near no-lose proposition. Make the strongest sincere environmental policy bundle offer they can credibly offer. If it's accepted, they get that coalition with the Greens. If it isn't, it's riven the Green Party. And if National then forms a government with NZ First instead, it gives National the ability to bat back any Green complaint about environmental policy with a reminder of what was rejected. The risk: publicly making the offer annoys Winston Peters and then brings about a Labour-led coalition.

But what would be a good environmental offer that National could make?

The Greens' biggest environmental policy concern this election has been water quality - at least as far as I could tell. Without iPredict around, I didn't pay as much attention as I have in prior years.

So, the first part of the offer would give the Greens a mandate to deliver a system to improve water quality. They get Ministry for the Environment. What makes a deal there acceptable to both the Greens and National? Rather than run the whole things through taxes, set up a trading regime that respects existing drawing rights as property rights, and existing consents for effluent discharge. Set a catchment-level cap on water extraction so that the aquifer is sustainable, set a minimum river flow so that the river is a river, then run the kind of trading regime that Raffensperger and Milke designed.

I started sketching this out here, but there are a lot of details yet to be worked out. We're soon to be starting a research report trying to figure out some of those details, and I rather expect that the Greens might prefer to set those details rather than leave them to others.

At the same time, set catchment-level caps on total nutrient flow to the lakes and let trading work similarly. Taupo's nutrient management regime is a place to start looking - but again there are lots of details to be worked out. Give the Greens a mandate to work those out.

And make the whole thing sweeter by setting a budget item to buy extra water volumes in the rivers where the money can do the most good for water quality, and to buy further nitrate reductions in catchments where it's high enough value to do that.

That set-up has a lot of desirable characteristics. Instead of farmers being offside and fighting the whole thing, they wind up with a property right that they find valuable - and that would be eroded if somebody proposed abolishing the system. The same mechanism that makes it impossible to reverse Canada's terrible dairy quota management system would mean that nobody could worsen environmental quality by either scrapping the system or by doubling or tripling allocations.

What else could be in the bundle? Perhaps Associate Minister of Transport with a mandate to set up nation-wide road-user charging that's time-of-day and congestion sensitive. Road pricing has to get addressed in the next couple decades as electric cars make a hash of petrol excise as a way funding roads. You likely to apply the kind of RUC framework used for diesel over to electrics, but likely with a phase-in to avoid discouraging electric uptake. There would be fun balancing in that, and I expect the Greens would like to be the ones to get to do it. And if you had road pricing right, that would also tell you whether it makes sense to build more roads in the first place - why not a hold on new big roading projects pending real cost-benefit assessment informed by the prices people are willing to pay to use roads at different times of day? Maybe the time-shifting you get just by having a congestion charge is enough to mean you don't need as many new roads.

And add in a path towards including all sectors in the ETS that's triggered by trading partners' accessions - basically, the more other dairy-producing places that have a carbon price, the closer New Zealand should be to having full agricultural inclusion in the ETS. But there are important things to wrestle with there too: too quick accession by NZ could increase global GHG emissions by shifting production to more carbon-intensive places.

Count me as one of the honest idiots in this mess. It's all wheels within wheels, and the whole thing has a bit of a tar-baby feel to it: "No, National, please don't make us a very sound policy offer with lots of environmental concessions in it. That's the last thing we'd want! It would destroy us if you did it. Please don't do it!" And where Shaw has spent the last few years developing an immunity to Iocane powder, who knows what level anybody's playing this game at.

If an offer to the Greens skews things against a coalition with Winston, that makes things more complicated - though I don't know why he should be the only one able to play both sides. Leaving that to one side, I still think National should offer a sincere strong environmental policy bundle to the Greens.

And for what it's worth, this is not the first time such a coalition has here been proposed:

• Seamus: For a Teal coalition.
• Seamus again: The Greens' New Leader

And here's an old TVHE post arguing for the same thing.

Update: A few other areas that could be given to the Greens in a desirable National-Green coalition:

• Minister of Justice:
• mandate to present a proposal for blue-skies drug policy reform for currently illegal drugs and novel substances, along with the constraint that what comes out of it either has to go to a referendum or is sunsetted after a decade barring a continuation referendum. I can't see National offering it to the Greens without having that kind of check.
• mandate to do what it takes to reduces recidivism, under big-data checks of programme effectiveness.

If there are other bits you see working, note 'em in comments. 

Voters!!! (fist-shaking edition)

It's not surprising, but still depressing, that the kind of people who would vote for Winston Peters are also the kind of people who didn't realize that, if NZ First got 5%, Peters would bring a coterie in with him. Writes talkback radio host Kerry Woodham, who presumably is better placed than most folks to not be surprised about the bottom tail of the voter distribution (HT: @LewStoddart , @SamJBonner):

The post mortem after the election has been interesting on the radio this week.

The number of people who called to say they didn't realise that voting for Winston would mean other people would get in has been teeth-grindingly extraordinary.

"Sooooo," I've been asking, "when you ticked New Zealand First as your party of choice, what did you want to happen?"

"I just wanted Winston to get in to keep the Government honest," they reply.
"And what about the other members of New Zealand First? Did you know who was on the party list?"

"No," they replied as one. "We just thought we'd be getting Winston."

"I was very surprised to see Andrew Williams get in," one exclaimed. "What's he doing there?" she asked.

Here's just one of the winners these folks helped bring to Parliament, courtesy of the Internet WayBack Machine (he's since deleted his homepage).

 PROFILE

Brendan first brought sunshine into New Zealand homes as the 'Weather Man' for the national news on TVNZ's Channel One. Frequently referred to as "Mr Sunshine" or "Mr Personality", Brendan's handsome and cheerful disposition enamored the New Zealand public and set a great many feminine hearts a flutter. Since leaving his day job on national television Brendan has gone on to carve out a successful career as an MC, Public Speaker and Entertainer. He has won the praise of some of NZ's greatest personalities including testimonials from our Olympic Champions, Politicians, A-list NZ corporations and other top class entertainers.

The former male swimsuit model and athlete ‘Brendan who has modeled with Kathy Ireland, Pauline Polinsky and Elle McPherson for 'Sports Illustrated' Magazine, possesses an endearing romantic voice with a casual ‘beach’ charm which is sure to warm hearts. His wonderful onstage charisma will alight fans aglow with comparisons to the ‘big voices’ of Sinatra, Presley and Tom Jones as he brings on the sunshine.

Ah, candidates that set feminine hearts aflutter. Or "a flutter". Either one is just nifty and high praise for our electoral system. I really hope he brings his delightful song stylings to Question Period. I miss hearing John Crosbie sing responses to Shiela Copps in the Canadian Parliament.

Meanwhile, in other belated election campaign fun, I loved the Christchurch Press piece where party leaders were asked about their favourite books and movies. I can't find it now, but a few years back there was a great piece on what people try to signal about themselves when listing their favourite books: learnedness, inquisitiveness, cosmopolitanism, and so on. So a top ten book list was replaced instead with a checklist: "In this spot I will place a book showing I know the canon"; "In this spot I will place a book showing my cultural broad-mindedness" and so on.

So I discounted that the leaders questioned were truthfully revealing anything about their cultural preferences; it was mostly signalling. And, the Press's Charlie Gates seemed to have made similar judgment. I just can't believe that John Key's favourite movie is Johnny English. It can't be. The consequences are too horrifying to contemplate. But, it could be worse; Mitt Romney's favourite book is Battlefield Earth.

You're missing the point, Jim

Writes Jim Anderton in the Herald:

But the most critical factor, crucial to victory, is the National-held "marginal seats", many of which have been traditionally Labour-held seats. Their importance in any election result has been largely ignored. We only need to look to recent state and federal elections in Australia to see how important these seats are in determining the outcome.

Both Julia Gillard and Tony Abbott spent what seemed like a disproportionate amount of their time in marginal seats. They knew only too well how important those seats were.

Marginal seats are often pivotal to election victory and that's where New Zealand's election next year will be won or lost. Currently, the National-led coalition Government of four parties has 16 more seats in Parliament than the Labour-led opposition of three parties. How many more seats does Labour have to win to be in a position to form the next government by having more seats than National?

The answer is only nine seats - if the nine seats are won by Labour off National and Labour wins all its current seats.

In Labour's favour, National has nine "marginal" seats which would be lost to Labour with a swing of less than 3 per cent.

These seats are: New Plymouth, 0.2 per cent swing (with a majority of 105 votes); Waitakere, 1.16 per cent (632 votes); West Coast-Tasman, 1.4 per cent (971 votes); Ohariu-Belmont 1.3 per cent (1006 votes); Otaki, 1.8 per cent (1354 votes); Auckland Central, 2.2 per cent (1497 votes); Hamilton West, 2.5 per cent (1618 votes); Te Tai Tonga , 2.8 per cent (1049 votes) and Maungakiekie, 2.9 per cent (1942 votes).

And then, of course, there is Wigram, an additional seat which I hold but, in my view, Labour will win, now that I am retiring from Parliament.

Of course, under MMP, if Labour picked up nine district seats from National, but the vote share didn't change, Labour would just get nine fewer list seats and National would get nine more list seats. Labour has twenty-two list seats currently. So they'd have to take at least twenty-three of National's district seats to force an overhang - that's the only point at which Labour taking National seats matters in determining the composition of Parliament.

I would have thought that Jim Anderton, who has been a Member of Parliament since the 1980s and who was there when they switched from FPP to MMP in the 1990s, would have known that. But he's apparently among the majority of Kiwis who really don't get how MMP works.

A prediction

For the next couple of months, if National Prime Minister John Key thinks there's any hope left for the ACT Party, he'll spend some time providing symbols that will infuriate the economic right. He'll look for ones that are relatively cheap, like appointing "history's greatest monster", former Finance Minister Michael Cullen, to head up New Zealand Post (history's truly greatest monster here). Cullen won't do any worse than the average appointee to that position, but he'll rile up the folks who'd be at the margin between ACT and National.

When and if he's lost hope that ACT can ever get itself together, those symbols disappear and he starts pushing a more liberal economic line, or at least providing those symbols. He can't go as far as Brash did, but he can certainly destroy ACT without much effort - kill Epsom, and tack slightly more right on economics. He won't move far in overall positioning - it's worse that moderate voters switch to Labour than that hard core economic liberals just stay home on election day. The former counts against you twice while the latter counts against you only once. National then moves farther to the right in the longer term as it absorbs former ACT activists into its party base.

The day Key stops attacking Douglas and starts talking up economic liberalism, dump your ACT stocks at iPredict.

Is ACT liberal?

I gave a talk a couple of weeks back for the ACT Party's Upper South Island conference. I there advanced the argument that I made on the blog back in March: namely, that ACT should guard against positioning itself as a right-wing rump to National and instead should re-emphasize social liberalism.

After many assurances from folks in attendance that ACT was indeed the Liberal party, Rodney Hide gave the counterargument: that ACT would do poorly by emphasizing social liberalism when so many disenchanted National voters are in play. The counterargument isn't a bad one as far as strategy goes. If National has pushed to center under Key, then we might expect Key to welcome a bit of brand differentiation: National for the centrist Blues, ACT for the non-moderates, and a stable coalition. That could be jeopardized if the "keep National honest" crowd voting ACT feared they could instead wind up with a Labour-ACT coalition: especially the rural anti-ETS folks that ACT may well wish to woo.

Of course, ACT's polling numbers, which continue to hover around 1%, suggest that there's not been much exodus from National to ACT; we'll see how things move as ACT's run against the emissions trading scheme continues.

But let's look at some numbers from the 2008 NZES. I ran a couple of (very rudimentary) principal component analyses on economic and social liberalism, pulling out a measure of each respondent's relative economic and social liberalism. I then split the population up into 9 quadrants: economic lefties, centrists, and liberals; social conservatives, centrists, and liberals, using a population distribution cutoff for all: 25th percentiles in either direction.

If we restrict ourselves to the 25% most economically liberal, 51% of those are centrists, 21% are right-wingers, and 28% are liberals. Now, these don't amount to a whole lot in the overall population - 4.8% and 6.3% for right wingers and liberals respectively - but it does suggest that there are more true liberals that could be courted than there are right-wingers.

Let's start by looking at where self-identified ACT voters from the NZES placed themselves, according to the  factor analysis described.

The yellow dots show the positions of ACT voters.  The red lines show twenty-fifth percentiles at the population level: 50 percent of the population lies between the two horizontal lines, with twenty five above the upper line and twenty five below the lower; similarly for the vertical lines.  The upper right quadrant shows the folks in the top twenty-fifth percentile on both economic and social liberalism: true liberals.  The bottom right quadrant shows the folks in the top twenty-fifth percentile on economic liberalism but the bottom twenty-fifth percentile on social liberalism: classic right wingers.  The NZES suffers from small sample problems with respect to ACT voters, population weighting on the other characteristics using the NZES's preferred weighting scheme slightly increases the proportion of ACT voters in the liberal quadrant.  In the weighted sample, 6% of ACT voters fell into the liberal quadrant while 7.6% fell into the right quadrant. So, as far as folks who voted ACT who also answered the 2008 NZES go, ACT isn't really a liberal party.  It attracts few classic left-wingers (top left quadrant) and no authoritarians (bottom left quadrant).  But the folks attracted in '08 were a mix of slightly-more-economically-liberal voters.

What happens if we look at a similar scatter plot for National voters, restricting ourselves to the ones who've answered "no" to the question "Would you never vote for ACT?"  Here's the result:

It looks like there are more right wing National voters who'd consider voting ACT than there are liberals in National who'd consider voting ACT, but the margin isn't huge.  Of those National voters who said they'd consider ACT, using the weighted population sample, 4.4% fall into the liberal quadrant while 6.2% are right-wingers.  But, of course, ACT can draw from more than just National.

So, now let's try it considering the sample of people who don't currently vote ACT but haven't ruled out voting ACT: 68% of the weighted population.

Let's see where those folks sit on the scatter diagram.

If we run the weighted population sample, 7.4% of these potential ACT voters sit in the liberal quadrant; 5.2% sit in the right-wing quadrant.  So there are more potential ACT voters in the liberal space than there are in the right wing space.  If we start limiting the set by restricting it to folks who rank ACT at least a 7 on a 10 point scale, though, the numbers reverse: the non-ACT voters who like ACT the most are right-wingers.  This could mean that there's more chance for ACT to convert these folks over to being ACT voters, or it could just reflect that ACT ran a fairly right-wing campaign in 2008 with David Garrett being fairly prominent.

So if ACT is chasing fleeing National voters, there may be more of them among the right wingers, but there's absolutely no evidence in the polls as yet of any exodus from National to ACT.  But there are more overall potential voters in the liberal quadrant.  There may be a few strong ACT supporters who don't yet vote ACT in the right wing, but the overall numbers there aren't better than the numbers in the liberal quadrant.

I've also heard rumours of possible courting of the Christian right.  This would be a bad idea.  55% of those rating ACT 6 or better on the "like" scale report they never attend church while only 19% say they attend church at least monthly: pretty similar to the overall population distribution in a pretty secular country.  And I can't think of a better way of chasing away the liberals who still like ACT.

In short, a fairly cursory analysis of NZES data shows ACT voters to be more right wing than liberal but that there's somewhat greater potential for growth of the overall vote among liberals than among right wingers.

For all the protests of being a liberal party, and despite the strong liberal leanings of many in their youth wing, many of their staffers and some of their MPs, it's pretty hard for an outside observer to identify ACT as such. That they attracted a somewhat greater proportion of right wingers than liberals in 2008 says something about their actual policy positioning.  Yes, they mostly supported the medical marijuana legislation.  But by pushing hard on crime and punishment without putting much emphasis on their potentially more liberal social positions on other issues, they're cementing a position at the right wing tail of National.  Which could work out for them if social conservatives aren't much less likely to leave National than are social liberals.  I guess we'll see.

It would be a mistake for ACT to make a lot of noise about keeping options open by courting social liberals when Labour has no hope at all in 2011.  But if ACT is a principled liberal party, they wouldn't have to couch it in strategic terms. Rather, it would just be reminding folks of what their principles are supposed to be: not just in speeches at conventions but also in policy advocacy. Longer term, I still think a liberal positioning would also do them well strategically.  At least the numbers seem to suggest it wouldn't hurt them.  But it's getting late.  ACT supported the civil asset forfeiture legislation that allows police to seize property on "balance of probabilities"; ACT also supported changes to legislation allowing police to collect DNA evidence from folks under arrest rather than just convicted criminals.  And, as the Greens predicted when ACT supported the legislation, we're now hearing rumours that the police are using that power to strong-arm young Maori into giving up DNA samples: give us a sample voluntarily, or we'll arrest you.

It's hard to think of occasions where ACT has stuck its neck out a bit on civil liberties: medical marijuana is the only one that comes to mind.  And the last iteration of the 20-point plan is almost entirely on economic issues; asset forfeiture was something they campaigned on, but on the wrong side.  They also favor New York style "broken windows" policing, though the evidence that such legislation actually reduces crime rates is weak at best.  Liberal?

So, to sum up.  ACT's current voters, as found in the NZES, are more right-wing than liberal.  ACT's potential growth in voters seems stronger on the liberal side than on the right-wing side, but ACT's policy emphasis is more attractive to right-wingers than to liberals. Cementing themselves as the farther-right flavor of National isn't an implausible strategy, but the evidence thus far doesn't suggest it's working, though the ETS campaign may yet yield returns.  But it's not an overall strategy that ought to convince liberals to get out and vote for ACT.  I get the rather strong feeling that, for civil libertarians, it's always going to be "jam tomorrow": that the potential policy gains on economic issues will always be deemed more important than the compromises with National on civil liberties.  And at current margins in New Zealand, civil liberties matter more to me.

More chart porn below, for the folks into that kind of thing.

New Zealand First voters in black; Greens in green (above).  A few confused socially liberal NZ First voters, but otherwise mostly as you'd expect.

A fair few liberal non-voters.  Maori Party voters skew left on economic issues but centrist on social issues.  United Future respondents surprisingly liberal: I was expecting more in the right wing quadrant.  Pretty small sample size on those voters though.

Finally, just how close are National and Labour voters?

Rural party?

Homepaddock reports on murmurings about the formation of a rural interest party, splitting from National over National's support for the emissions trading scheme. She thinks this would make things worse for rural folks.

I'm not so sure given that we're running MMP. So long as all those Rural Party folks voted National on the list, Rural on the electorate, MMP would give them a nice overhang, and National + Rural would have more seats than National would have had.

In other news, the much hoped for (among ACT folks) shift of National voters over to ACT with Key targeting centre...well, it might happen sometime, but not yet.

National's popularity has taken a dip, a new poll shows.

The One News Colmar Brunton poll, the first major one since the May 20 Budget, showed support for the National Party had dropped five percentage points to 49%, but remained well clear of Labour, which was stagnant on 33% support.

The poll showed the Greens had climbed to 7% support and the Maori Party to nearly 4%. ACT remained less than 2%.

In the preferred prime minister stakes, Labour leader Phil Goff had only 6% of the vote, 40 percentage points behind National leader and Prime Minister John Key.

Malpass on MMP

Luke Malpass and Oliver Hartwich argue for a rather substantial change in New Zealand's Parliamentary structure: a lower house elected by FPP and an upper house elected proportionately by region. They rightly argue that the aim should be for a "least worst" system rather than a best one.

There are some big problems in squaring bicameralism with Westminsterian parliaments. First and foremost, from whom must the executive seek confidence? If an important bill fails in a Parliamentary system, there must typically be a confidence vote. Would a Kiwi senate striking down a piece of legislation trigger a no-confidence vote? If so, then all of MMP's problems with coalition formation return. If not, and the Senate can strike down money bills, what happens in case of deadlock? I've no particular problem with deadlocks, but they don't sit well with the notion of Parliamentary supremacy.

Malpass and Hartwich suggest adopting the Australian system where the Prime Minister can dissolve both houses and hold a full re-election should a government bill be twice rejected by the Senate. This solves one problem, but eliminates a potential benefit of bicameralism: namely, having an upper house elected on a much longer term than the lower house to insulate policy from the transient whims of the electorate.

Brook-Cowen, Cowen and Tabarrok's 1992 primer on constitutional change in New Zealand suggests that, relative to the unicameral first past the post system then operant, bicameralism offered little.

In New Zealand, the introduction of a strong second chamber would fundamentally alter the nature of accountability in government, and in a manner which would in our view be unsustainable. Westminster systems of government revolve around the accountability of the executive to parliament. With two equally powerful but differently composed chambers, the executive will face continuing conflicts in defining the interests to which it is accountable. As a result of these conflicts, we might expect a general weakening of accountability to the electorate. In particular, we would expect:

• a reduced incentive on the part of politicians to mirror the preferences of the median voter;
• an increased incentive to serve the interest of strong special interest groups;
• an increased incentive to maximise revenue and redistribute resources from citizens to the government;
• an increased incentive to favour particular regions and districts at the expense of other regions and districts; [fn: This outcome will hold where the second chamber is elected under a federal system or by means of regionally-based proportional representation.]
• an increased incentive for politicians to indulge their own policy preferences or ideology;
• a reduced incentive to respond favourably to international constraints.

Accountability conflicts of the kind described here are not necessary features of bicameral systems. Rather, they are a product of the particular combination of strong bicameralism and a Westminster parliamentary system. Strong bicameralism and accountable government could, by contrast, be combined if New Zealand were to adopt a more consensual system of government (for example, with the first chamber being elected on a proportional representation rule), or a presidential system of government (with executive power distanced from the legislature).

The status quo has of course changed since then. MMP means that Parliamentary parties must form coalitions to govern; forming coalitions across houses ought not be particularly more difficult than forming them within houses. So the costs of adding a second chamber are now much lower than they were from the 1992 status quo. But it's not clear to me that the main problems of the current system - too short an electoral time horizon, difficulty in ascribing responsibility in coalitions, generally excessive power for minor players - would much be solved by adding a second chamber.

The best argument I've seen for a second chamber is that it slows the implementation of reform such that it's more likely to be embedded: Australia having taken the slower route to economic reform but having brought more voters along. But would a bicameral system as here proposed really slow things down that much?

Every three years we'd vote for a lower house by FPP and for an upper house by regionally-based PR. It's the rare case in which the party with the smaller fraction of the vote gets a Parliamentary majority under FPP. It happens, but not all that often. So the dominant lower house party would also be the dominant upper house party. In the lower house, it would likely have a majority; in the upper house, it would have to form coalitions with minor parties. I'm not sure I see much difference between a large centrist party having to form coalitions in a unicameral parliament and that same large centrist party having to form coalitions in one house of a bicameral system. Moreover, as the party lists developed for Senate elections would be controlled by the party apparatus, the odds of there being substantial within-party differences across the two houses are slight.

I'd modify Malpass's proposal as follows:

• House elections (FPP) every four years; Senate terms of eight years with staggered terms - half elected each time there's an election in the House
• Senate elected by a national PR vote rather than regional PR to reduce geographical coalitions across houses: enough incentives for geographical redistribution in the lower house; demographically-based coalitions in the upper house should check the worst geographic pork-barreling (though massively attenuated as upper house parties are clients of lower house via party list structure)
• The Australian double-dissolution trigger seems a good one. The Executive is beholden to the House for confidence, but a bill twice rejected by the Senate lets the Prime Minister dissolve both houses for election; in that case, some Senatorial seats would be up for three-year and others up for six-year terms.

I'm still rather unsure of the benefits of a bicameral system with an upper proportional house over a unicameral first past the post system in a small country. Increasingly, the main criteria for me is whether voters can adequately apportion blame for bad outcomes. Westminsterian FPP fares best on that metric.

Other reactions:

• Brad likes the proposal.
• NBR reports here.

The depressing state of New Zealand politics

I really shouldn't be disappointed when politicians act in accordance with theory.

Public choice says that politicians are self interested and want to be re-elected. In an MMP system, that means that the big centre-right or centre-left party has to cobble together a coalition supported by 50%+1. We usually expect the minimum connected winning coalition - the smallest grouping of parties adjacent to each other in left-right space - to emerge. In 2008, Key put together a larger coalition than that, mostly, it seems, to give himself flexibility to ignore ACT, who might sometimes recommend that policies enacted by Helen Clark be rescinded. Even absent that kind of larger coalition, ACT is largely toothless: they know they won't go into coalition with anyone but National, National knows it, ACT knows National knows it and so on. So they have no bargaining power in coalition formation: they're promised productivity task forces that are promptly ignored and so on. ACT can't even get National to support a bill reversing a Labour-Green policy that National opposed when Labour enacted it and that National might reasonably have been expected to reverse in office.

If Key wants to maximize his chances of being Prime Minister after the next election, and ACT would neither bring down a National government nor go into coalition with Labour, then it's hard to fault his strategy. The polling wouldn't be good on changes to minimum wages as most folks don't understand economics; if the policy were enacted, more youth would blame National for small wage decreases than would credit National for getting jobs. So there's little political gain in dropping the youth minimum wage regardless of the economic case for it: no votes to be gained, and ACT doesn't much need appeasing.

I don't know how long ACT can survive as this kind of rump. Not many folks can point to any particular ACT achievements in government other than getting to take the blame for Auckland's amalgamation. Yeah, they're getting a productivity commission (after a productivity task force report was sent to the shredder, unread); yeah, they might eventually get a regulatory responsibility bill (which I'm now having a much harder time imagining both having the teeth to do anything useful AND being supported by Key: looks more like pick one or the other). And maybe they've behind the scenes stopped some really stupid policies; I'd believe it, but that's not the kind of thing they can campaign on. There seems little chance of ACT pulling above the 5% threshold for Parliamentary representation; Hide's seat in Epsom serves as lifeboat.

And, I don't think that just coming up with nifty new economic policies will push ACT over 5%; the problem more is in making credible that their policies ever would be enacted by a coalition. If ACT can't even get National to agree to go back to the status quo as of January 2008 on the youth minimum wage, why should we ever expect them to extract anything substantial from National? They're the dependable rump on the right, easily ignored, who'd never vote with Labour so why worry? It's the centrist parties that profit from bidding wars between the centre-right and centre-left. ACT has been up a bit lately in the polls, pulling from National's right tail. But those right wing voters have more influence staying in National and moving National's policy position than they have by increasing ACT's vote share. The policy position chosen by National at convention will be the median of its members, mediated a bit by a pull to centre. The more voters shift from National to ACT, the further left is the median National voter; as ACT won't credibly go anywhere else, it doesn't much move coalition policy. This of course will limit the number of voters ACT can draw from National's tail.

But ACT could have more serious influence on policy. Folks forget that a truly liberal party, in the European sense of the word, and which ACT has claimed to be, isn't a right wing party: it's to the right on economics and to the left on social issues. But ACT's forgotten the other side. It's time they remembered it.

Key can afford to ignore ACT because there's no chance of ACT going elsewhere after the 2011 election, if it returns in 2011. This has to change. And perhaps the best way of making that happen is for ACT to stop talking about economics and start talking about the parts of a liberal platform where they could make common cause with the Greens and the socially liberal side of Labour.

The Law Commission released a report arguing that New Zealand's laws on marijuana needed revision; Simon Power immediately ruled out any changes in drug policy. When a liberal party could have been jumping up and down with the Greens trying for a liberalization of our drug laws, I didn't hear anything from ACT, probably because caucus isn't as liberal as ACT's banner. Where has ACT been on the internet filter? On the use of asset forfeiture legislation? On copyright reform? They may well have policies on all of these (and, on asset forfeiture, the wrong one), but they've not been priorities. Instead, I only see them on economic issues that increasingly seem doomed and on Tiebout-competition-destroying and subsidiarity-ignoring city amalgamations.

Imagine that after the 2011 elections neither Labour nor National has enough votes to go it alone. Labour plus the Greens plus Maori plus ACT could form government; National could do it with ACT or Maori. That's not implausible. ACT puts out a slate of economic policies for National; a slate of civil liberties policies for Labour/Green, choosing the ones that the Greens would find most enticing. A liberal agenda is advanced in either case. It's not like Labour is hopeless on civil liberties either: I am far more a fan of Labour's civil unions bill and prostitution law reform than I am of anything National's done or, increasingly, than I am of anything I expect National to be likely to do. For all that Labour screwed up on the economics side, a not unreasonable case could be made that a liberal agenda made more progress under nine years of Helen Clark than has been made with a liberal party in a National government.

After an election giving National the choice, would National really choose not to bring ACT into the government if its slate of economic policies were roughly in keeping with the kinds of things that National voters tend to like? Just make former National Party leader Don Brash's productivity commission report the basis for ACT's proposals. But by being willing to go into coalition with Labour on a civil liberties platform where they'd make common cause with the Greens: drug reform, internet filter, civil asset forfeiture, perhaps even copyright reform, ACT could have a decent chance of holding National to some reasonable economic reforms: size of government (giving room for changes in taxation), welfare, regulatory burden, RMA.

ACT needs to be able to make credible threats. Focusing on civil liberties would help.

I could easily be wrong: maybe the Regulatory Responsibility Bill has a really great chance of being implemented in a form that would do a lot of good. I can believe that National would be more friendly towards legislation that constrains future action than legislation that annoys voters today; it's probably ACT's best chance of achieving anything on the economics side. If they can quietly make useful structural changes in a National government, then there's less need for the kind of positioning I'm advocating. But everything I've seen thus far from Key makes me pessimistic; I'd expect National to write in enough escape hatches that it, and Labour, would not be terribly constrained. OIRA in the United States hasn't been particularly effective in constraining bad legislation and budget caps there similarly have proven ineffective when every year can be deemed an emergency year requiring the cap be increased or ignored. Quasi-constitutional constraints are great, but they have a hard time being effective in a Parliamentary system if the majority party doesn't particularly wish to be constrained and if voters aren't particularly constitutionally minded.

The biggest risk in liberal positioning would be in alienating the hard conservatives in ACT's base. But how many of those would be willing to trade a much better chance of advancing the economic issues they care about in exchange for some moves on social policy? And, for those who haven't the stomach for the deal and leave, how many younger folks would ACT bring in on a civil liberties ticket? I hope ACT's doing some polling.

The usefulness of the 'Buy New Zealand Made' campaign

Both AntiDismal and NotPC have it wrong, says me. Both of them correctly note that the 'Buy New Zealand Made' campaign - an ad campaign put in place by Labour as a sop to the Greens - was completely useless in affecting folks' consumption decisions.

But that didn't make it useless.

The biggest problem with MMP is the costly bargains main parties have to make with support partners. The more efficient that main parties are at creating symbols to placate support parties that have zero real world effect, the better. Yes, they can cost a bit of money in the budget; NotPC says the Buy NZ campaign cost somewhere around $10 million. But that's insanely cheap compared to other anti-trade policies. I cannot imagine a better piece of policy that buys off the Greens and the nationalists while having trivial deadweight costs. Yeah, so every tax dollar has a deadweight cost somewhere around thirty cents. So the policy cost $13 million all up, pure loss. But compared to hiking tariffs or abandoning the free trade deal with China? Priceless.

Always remind yourself how much worse things could be.

Borlaug and afternoon roundup [updated]

• Norman Borlaug dies at age 95. An environmentalist and humanitarian who won the Nobel Peace Prize back when it meant something. Reason's 2000 interview with him remains the best summary of his work. Obit at Reuters. Other blog roundups: BK Drinkwater, Radley Balko; Update: NotPC has a better compilation of obits and write-ups than I have.


• Anti-immigrant stupidity in New Zealand. HT: LibScott


• Andrew Coyne over at Canada's National Post occasionally lauds the merits of PR systems, sometimes making note of NZ's MMP system. Turns out the Kiwis don't much like it anyway. Or, rather, as many folks like it as don't. Which I suppose isn't a bad result for MMP, given that folks can choose whatever their preferred system is for the "not" option. It's still hardly overwhelming support though. Rather, it's a strong meh.

Eroding our Clean Green image: corruption edition [updated]

Kiwi readers will already know that former Immigration Minister and Labour Party MP Philip Field was yesterday convicted of corruption. Long story short, he took bribes from poor Thai workers, in the form of unpaid labour on his houses, in exchange for his facilitating their visas. I have little to add beyond what Stephen Franks and David Farrar have already said on the issue.

The bigger scandal for me isn't the corruption; it's that the previous government did everything it could to prevent any kind of serious investigation of charges against Field. Do check the above Farrar post.

Helen Clark couldn't easily fire Field for the same reason that she couldn't fire Winston Peters, whose false declarations of political donations earned him Parliament's censure and should have cost him his position as Foreign Minister - Peters was "stood down" but never fired, letting him keep the Ministerial Baubles of Office.

Labour's coalition governed by a rather narrow margin. In a 121 seat Parliament, Labour (50 seats) plus NZ First (7 seats) plus United Future (3 seats) plus Jim Anderton (1) adds up to 61 seats. Clark kicked Field out not for corruption, but because he signaled running for a new party in the next election. Kicking him out meant that the supply and confidence agreement with the Greens became rather important; it's not implausible that Labour was forced into supporting Sue Bradford's anti-smacking bill because of this. Had Clark done the right thing and kicked Peters out, she would have lost all of NZ First, requiring her to get both the Greens AND Maori on side.

And so we have another pernicious effect of MMP: encouraging corruption, or at least massively discouraging its punishment. Governments in First Past the Post systems tend to be strong enough to withstand losing an MP or two if need be. Not so under MMP; we expect minimal winning coalitions. And so another chalk-mark in favour of John Key's building a broader coalition: he can credibly kick anybody out, and even lose either all of ACT or all of the Maori Party's support, and still govern. While this means that ACT cannot really constrain National against silly things like forcing the superannuation fund to invest ridiculous amounts domestically, it also has upsides.

Kiwis like to go on about their clean image. Transparency International ranks us well, at least for now. I don't expect nonsense of this sort under the current administration, mostly because Key has arranged things such that he cannot be in the pinch Clark was in. We'll see what happens after the next election.

Update: Farrar notes that Labour was winning confidence votes by a margin of about a dozen at the time (ie, Greens and Maori Parties tended to vote with the Government). It does make a difference, though, whether the party's block vote is inframarginal or marginal. In the latter case, the negotiating position changes; wishing to avoid such a change may well have contributed to Clark's not sacking Field.