Post-apocalyptic bureaucracies

You've gotta have goals. And @Keith_Ng has a new one. Not content with being a data visualization wizard, here's what he wants to tackle next. Well, conditional on there being a zombie apocalypse.

New life goal: Become ED of Post-Zombie-Apocalypse policy thinktank. Influence policy, debate about market solutions to zombies.
— keith_ng (@keith_ng) June 21, 2012

I suggested a better, more feasible goal:

@keith_ng Better goal: develop TV series around that concept. Ep1: you try to ease regs to let people kill zombies without DoC concession.
— Eric Crampton (@EricCrampton) June 21, 2012

We settled on a Zombie version of The Wire as being pretty fun. You follow the free-market think-tank types, the bureaucracy, a vigilante crew, and the zombies at the start of the zombie apocalypse. A few story ideas:

• The City mandates expensive burial methods to protect against zombies but doesn't do anything to help low-income families cover those costs. Poorer families then move to more "informal" burial techniques, with predictably bad results.
• The crematorium is over-capacity and belching out more smoke than its consent allows; the local Environmental Authority debates shutting it down entirely until they're able to bring PM10 concentrations back down to acceptable levels, but settles on barring cremation during the hours when people have their washing out, at least until more powerful scrubbers arrive from overseas by ship. The over-capacity problem worsens, with predictably bad results.
• A private charity's attempt to set up extra crematoriums to handle the load, and especially for poorer families, run up against the local Environment Authority's mandate to reduce the number of non-compliant PM10 nights. While people with existing crematoriums are allowed to keep using them and can replace them (subject to the time-of-day regulations above), you can't build any new ones, even if they would have very low emissions. The Government doesn't consider changing the Environment Authority's targets in light of the problem, noting that the zombies are likely temporary.
• Council declares a "Red Zone" for the worst zombie-affected areas of town. Residents have to evacuate their (still very defensible) homes. But they make no provision for alternative housing arrangements while insisting on strict enforcement of all the pre-zombie regulations that kept housing in short supply. Higher income people leave town; lower income people start living in far less defensible cars, tents, and garages, with predictably bad results.
• Local hoteliers complain of lost custom from the zombie outbreak. Council sends the Mayor out on a tourism promotion campaign to encourage more people to come to the infected city. The results are, well, you guessed it.
• Government bars schools from excluding zombie-infected-but-still-living-and-certainly-contagious children. Local teachers' unions rally not against the regulation but instead against the publication of league-tables that would tell parents which schools had the worst infection rates. 
• The vigilante crews that kill zombies are brought up on charges because the zombies still count as people under the law. The Government passes legislation under urgency allowing zombie-killing, but only under fairly stringent licensing guidelines demanded by a coalition partner ensuring that tapu is respected. Anybody who wants to kill a zombie has to get a certificate that they've completed relevant tikanga training. You have to fly to another city for training because the normal Council training facility is overrun by zombies.
• The Department of Conservation modifies their 1080 poison traps with "extra brain flavouring" to knock out the zombies. Environmental campaigners lobby to stop them because the new traps also attract endangered snails; the government proposes partial privatization of DoC. The lobby group opposes the latter part because it doesn't go far enough, and opposes the former part because it crowds out private zombie-eradication service providers.
• The government sets up a Super-Ministry with powers plenipotentiary to stop the zombies. The Super-Ministry spends most of its time trying to figure out how we can still have a full rugby season despite the outbreak. Ignoring the mess of regulations stopping people from dealing to the zombies on their own, or that make things worse, the Minister says we should leave it to the market to sort out.
• Keith would likely insist on an episode where we find out that smoking makes you more likely to be infected by zombies, with the lobby group then opposing more tobacco regs. I dispute the science on that one. Either way, the Ministry of Health is very happy that none of the zombies seem to be smokers.
• Overseas scientists come up with a virus that kills only zombies. As it was constructed using genetic modification techniques, the Greens oppose its use in New Zealand. Eventually, some farmers get fed up with the bureaucracy and import it on their own. But because they don't do a great job in dispersing it, it only knocks the zombies back for a few weeks before new and resistant zombies lurch forward.
• Despite signs that the zombie outbreak will almost certainly spread to other towns, other towns' councils insist on sticking with current consenting processes that require notified consent and RMA approval for adding defensive features to your home. Owners of heritage buildings are prohibited from replacing zombie-prone stained glass windows with steel-mesh reinforced versions.
• Paul Krugman writes a tasteless op-ed about the benefits of zombie outbreaks when we're in a liquidity trap.
• In most episodes, the think-tank plays a Cassandra role (or at least in my version). In Keith's, they'd probably be more malevolent. Either way, it's key that even if policy were set properly, good outcomes are far from guaranteed. 

Tell me there's a single implausible bullet point above. Other than the existence of zombies.

I'm very glad we don't have zombies.

Update: Hit #ZombieNZ

Dairy Puzzle

Dairy products are cheaper in New Zealand than in Canada, where the dairy cartel keeps prices high.

But the Dairy Farmers of Canada VP Ron Versteeg points me to an interesting puzzle: FAO stats showing NZ consumption of some dairy products is lower than that in Canada.

Here's an FAO table showing NZ and Canadian consumption. Or, at least, I'd expect that this has to be per capita consumption rather than production given that total NZ production is higher than total Canadian given relative herd sizes.

I threw these into Excel and plotted the series as ratios: in each case, the line shows New Zealand per capita consumption as a multiple or fraction of Canada's. You might need Java enabled for the graph to work.

We consume a lot more butter than do the Canadians, and more whole milk, but a lot less cream.

Here's the aggregate consumption data for 2007, the last year for which there's data.

Country	Item	Consumption (kg/capita/yr)
Canada	Butter, Ghee	2.51
New Zealand	Butter, Ghee	9.33
Canada	Cheese	12.73
New Zealand	Cheese	4.92
Canada	Cream	8.85
New Zealand	Cream	0.17
Canada	Milk - Excluding Butter	206.83
New Zealand	Milk - Excluding Butter	103.79
Canada	Milk, Whole	35.45
New Zealand	Milk, Whole	54.22
Canada	Whey	7.38
New Zealand	Whey	n/a

A few puzzles:

• Cheese here costs about NZ$9/kg including 15% GST - that's about Cdn$6.30. And, honestly, standard cheap cheese here tastes better than the somewhat rubbery stuff with the chemically orange food colouring I remember from back home. But NZ cheese consumption is very low relative to Canada's.
• Differences in standard fluid milk prices don't seem huge. Ron says his local supermarket supplies at $4.47 Cdn for 4 litres, or NZ$1.42/l; we pay NZ$4.49 for 3 litres, or $1.50/l, though the dairy on my drive home sells it for $1.35/l. Price differences seem small. But NZ drinks a lot more milk than Canada.
• The totals in the FAO table don't match the components; the difference would have to be stuff like ice cream that's not included. But if it's right, then Kiwis are consuming about half as much dairy product as are Canadians despite that dairy products here, compared to other food items, are relatively cheap.

Any candidate hypotheses?

Externalities: A Primer

It is far too easy to come away from a lazy version of Econ 101 thinking that, because externalities are pervasive, the range of meliorative government policy is very broad indeed. It's hard to think of any part of life that doesn't involve external costs of one sort or another.

When you get past Econ 101, you start getting all the caveats. The range of externalities that actually generate inefficiencies is pretty small relative to the universe of externalities. And, even those that can potentially be fixed by policy aren't necessarily best handled by policy. Private solutions to some kinds of externality problems do emerge; layering policy on top of private solutions can make things worse than leaving things alone.

Let's start by walking through a narrative version of Buchanan and Stubblebine's seminal work. And, we'll start by separating out two very different kinds of ways that other peoples' behaviour can affect you.

Suppose that you and I both attend a house auction. I show up wearing a t-shirt that is so offensive that you feel physically ill.* In fact, you would have been willing to pay me $100 to have worn a different t-shirt this morning. I would have been willing to have changed shirt for any payment greater than $20. Despite your nausea, you are able to bid on the house. But, because I'm bidding against you, you wind up paying $10,000 more than you otherwise would have.

My bidding against you at auction imposes a cost on you, but one that does not change the efficient outcome. The house goes to the person who values it most: you. And while you have to pay more for it, the seller receives more for it: my action has caused a transfer from you to the seller. When we model things more formally, these effects run through your budget constraint rather than your utility function. You have less money with which to do things, but we have no reason to expect that anybody is choosing the wrong mix of goods given their budgets. We call these budget-affecting externalities "pecuniary externalities". When economists say, "Oh, but that's only pecuniary", that means that it's something that we don't really need to worry about if what we care about is efficiency. We only care about externalities because they induce resource misallocation; pecuniary externalities don't do that. There might be other justice-based reasons for worrying about pecuniary effects, but to the extent that we do, we generally conclude that those kinds of concerns are really best handled by just giving money to poor people.

But the nausea that I imposed on you with my careful choice of t-shirt is a real external cost. It's easy to imagine that you'd be willing to pay some amount to change the state of the world - that means it's potentially Pareto-relevant. A Pareto-efficient outcome is one where it's impossible to make anybody better off without making somebody else worse off at the same time; a Pareto-improving move is on that makes at least one person better off while making nobody worse off. A Pareto-relevant externality is one where a Pareto-improving move is available: the total willingness to pay to change the outcome, aggregated across all the people affected, is enough to generate a change in the outcome. You suffered costs of $100; I would have been willing to accept $20 to avoid imposing those costs. Eighty dollars worth of value was forgone by my having worn the wrong shirt. So the externality was Pareto-relevant: had I chosen a different shirt, the gains to you would have outweighed the losses to me. We call externalities of this sort technological: they affect others directly through their utility functions rather than indirectly through the budget constraint.

We expect technological externalities may induce inefficient outcomes. The real costs that I impose on you through your utility function are not factored into my decisions and so I can wind up choosing the wrong consumption bundle. But, again, not necessarily. If it would have cost me $100 to change shirt, and the burden on you was only $20, the efficient result is that I wear the t-shirt. The externality was only potentially Pareto-relevant, not actually Pareto-relevant.

Eli Dourado's Mercatus Working Paper on cybersecurity walks nicely through the difference between inframarginal externalities and marginal externalities, along with a host of policy and private solutions to externality problems. David Friedman's treatment is excellent; he also cautions in Law's Order of problems that can arise when we couple Coasean solutions to externality problems with tax-based approaches [see Chapter 4 in particular].

What about externalities that affect you through the tax system? Edgar Browning calls these "Fiscal externalities". They would count as pecuniary by the Buchanan and Stubblebine definition, but they also are effects that operate outside the market process. David Roberts worries about these when weighing the case for taxes on sugary drinks. In the presence of a public health system, any decision you make that affects your health also has effects on others through the tax system. To what extent is it efficient to worry about them?

First, imagine the limiting case in which nobody's behaviour changes as consequence of health care costs being borne by others: everyone behaves as though they had private insurance that charged actuarially fair premiums. In that limit case, every health cost borne through the tax system is only a transfer. It's a transfer from richer and healthier people to poorer and less healthy people, and it's a transfer from risk-averse to risk-preferring people, but it has no efficiency consequence. There is no simple efficiency case for worrying about it, though you could build complicated cases around the cost of raising money via taxes versus the costs of abating health care costs via other mechanisms.

Now, let's take the more realistic case where individual behaviour is at least somewhat responsive to that somebody else is paying for your hospital care and that your premiums do not vary with your costs. There's reasonable evidence for this: Jon Klick and Thomas Stratmann show that when state governments mandated that private insurance plans cover substance abuse treatment, people increased their alcohol consumption by an amount equivalent to about "48 extra beers per person per year".

What are the policy implications? Let's recall first that the cost imposed by the behavioural change is likely to be small if consumption changes are small relative to the total amount that would otherwise have been consumed: average per capita beer consumption in the US is 78 litres according to Wikipedia. Imagine that we had no public health insurance but instead we gave a lump sum of cash to everybody and required that they use it to purchase health insurance; insurers could charge what they liked. How much would we really expect anybody to cut back on their consumption of sugary drinks? People bear very direct personal costs of being in poor health; the monetized value of that will not be trivial even relative to expensive insurance premiums. In other words, the effect may mostly be inframarginal. I refrain from engaging in extreme mountain biking even though ACC would cover all of my health costs: I really don't like pain and injury. I would pay multiples of the cost to the health system of a broken arm to avoid breaking my arm.


So any policy seeking to internalise the external costs of individual health-affecting decisions ought to focus on the incremental costs caused by the extrernalisation of those costs through the public health system, not the aggregate burden of related diseases. Browning, in the piece above-linked, shows that the set of taxes and subsidies that would be necessary to nudge everyone back to what they would have been doing if the health system didn't distort behaviour winds up replicating the insurance premiums individuals would have been paying under private insurance but at very high administrative cost. Private insurers can set premiums based on individually specific characteristics; governments are more typically constrained to using linear tax schedules. But for things like sugary drinks, health costs are likely exponential in consumption, not linear; for alcohol, it's a J-curve with health benefits from moderate consumption and costs from excess consumption. Your insurer might decide only to increase your premiums if you're a heavy drinker; governments are restricted to linear taxes on alcohol that overcharge moderate drinkers and undercharge heavy drinkers.

Setting excise taxes to try to internalise the largely pecuniary effects of consumption decisions can induce technological externalities by causing some would-be moderate consumers to consume too little.

A few bottom lines study notes for the exam, as this will also now be part of the readings for my Economics & Current Policy Issues class:

• There is no market failure case for responding to pecuniary externalities. 
• While there can be a market failure case for policies addressing technological externalities, we have to be awfully careful because private markets often have already internalised them. A decent rule of thumb: if people are linked through a contractual or quasi-contractual nexus, intervening is likely a bad idea. We don't need policies to address the costs screaming babies impose on other airline passengers; the airlines are residual claimant.
• Most of the "cost to the taxpayer through the public health system" aspect of individual consumption is pecuniary rather than technological. Any policy in this area has to be very careful to address only the parts of consumption behaviour that are directly caused by the potential for public defraying of health care costs; the risks of inducing inefficiency by setting policy to address pecuniary effects are real.
• Note too that the actual burden on the health system may be pretty complicated. Smokers cost the health system more in every year that they are alive, but potentially save the health system money in the long run by dying early - and they definitely save the government money in total when we consider that smokers die before drawing too much in superannuation. It's even pretty plausible that healthy people wind up costing the health system more in total because they impose costs for a long period of time. What do we do if we find out that it's the gym rats who wind up costing everybody more because they spend ten years in a publicly funded dementia ward instead of dying of a heart attack at 67?

This is part 2 of a two-part series; in part 1, I took a more rights-based approach. And see here for prior posts on externalities.

* Only weirdos would be offended by these fine shirts, but they count in the social welfare function too. Anybody stumped for Christmas presents for Crampton can send me one of these shirts; I'm likely a medium.

Externality chains

Are there really no bright line rules separating actions with external costs from those that are properly left entirely to individual choice? David Roberts sees only shades of grey:

Take sodas, for instance: The costs of health care in the U.S. are socialized to some degree, so individual decisions to get unhealthier do affect me. I pay when rates are driven up, or when people end up in the emergency room.

So whatever the line is — between the sphere of rights and sovereign individuality on one hand and the sphere of interconnectedness and social responsibility on the other — it can’t be “actions that don’t affect others.” There are none!

Perhaps, then, the distinction is between actions that mostly affect me and those that substantially affect others. If I dump trash in a neighbor’s yard, obviously I’m violating her sovereignty and the state has a legitimate right to constrain my liberty; no one would call that “paternalism.” But the causal chain between my decision to drink a big soda and the effect on health-care costs is long, tenuous, incremental, and uncertain. Perhaps I decided to jog home after my soda! Do I get a tax credit for that? In the case of soda, the claim to individual sovereignty is more immediate, more tangible, than the long thread connecting the decision to impacts on the collective welfare.

What this reveals is that state decisions to restrict individual behavior can not be guided by a clean line between the individual and collective spheres; there is no clean line. Restrictions on individual liberty will always be judgment calls about whether negative effects on others (externalities) outweigh the presumption of sovereignty.

This dilemma is on the mind of anyone who covers climate and energy.

I'll argue for two separate bright-line rules: the first based on individual rights (but pretty influenced by economics), and the second where I ditch the rights-based argument and stick to the economics.

Let's compare Roberts' first two examples, sticking to a rights-based approach for now; the pure economics version will be a separate post.

The only mechanism by which somebody else's obesity really hurts me is when either my insurer is legally barred from charging actuarially fair premiums, or when health care is covered through generalized taxes.* Let insurers charge the obese for their actual expected risk and there is no cost on anybody else. Let the government get out of the business of providing health care and instead get into the business of giving poor people money and mandating that they buy private health insurance with it, and obesity again puts no cost on anybody else. It's perverse to tell people:

"In exchange for forcing you to be part of a public insurance scheme that you might not want, I'm going to set up an apparatus of regulations, subsidies and taxes to force you to behave in ways that reduce the costs on the system that I'm forcing you to join. You're welcome."

Roberts' long causal chain runs directly through deliberate policy choices that work to socialise the costs of individual behaviour. And if we let things run through that mechanism, there is absolutely no end to the range of behaviours that can legitimately be subject to the heavy hand of the state. Remember that STDs cost the government money too.

By contrast, carbon emissions do affect others directly and in a way that's awfully hard to handle through tort. Setting up a clean carbon tax seems the best way of minimizing aggregate rights violations: the tax is an imposition, but so too are the emissions.

When we ditch the rights-talk and stick to economics, we have to look at pecuniary, non-pecuniary, and fiscal externalities. That's likely worth a separate post since it comes up an awful lot and I'd rather like to be able to point to it on its own in future. In short, the economic case for intervening in response to external effects depends not on whether other people are bearing costs but rather on whether there are efficiency consequences.

* There can be a case where the insurer is allowed to do it but it isn't worth the insurer's time and effort. Aggregate losses in this case can't be very large - the insurer doesn't spend much time assessing your risk of paper-cuts for similar reasons. The same holds for other kinds of transactions where there are apparent effects. Airlines have tried to require that very large people purchase two seats to accommodate their girth; some countries have socialised this cost by mandating that airlines give fat people two seats for the price of one; others have banned it as discriminatory. The obese cost you money in higher airfares because the government has forced the airline to make it so.

Anchor Projects

It always made a kind of sense that some parts of the downtown Christchurch rebuild were being help up while property owners waited to see where the "anchor projects" might land: hotels would want to wait to see where the Convention Centre might sit before deciding where and whether to rebuild. Bars might want to know whether there'd be a downtown sports venue.

But I hadn't caught this angle: expropriation risk. From this weekend's Press:

So the CCDU [Central City Development Unit] was set up as a development agency to do it the other way around - begin with the project and then design it to achieve the masterplan's objectives. Let the building heights, parking access and other details flow from the logic of the intended outcome.

Elder says this is what surprised him - the boldness of the new approach.

The CCDU design consortium, led by planning consultant Boffa Miskell, has been told to forget about land ownership, road grids and other restrictions, and simply put anchor projects, such as a new conference centre or sports stadium, where they make most sense, he says.

The city's problem is that property is split into thousands of individual titles, so any rebuild was always likely to be a disjointed, piecemeal affair.

However, the CCDU, backed by the power of Cera, can now come in over the top. Land can be amalgamated, by force if necessary. Owners are even being warned that new buildings that get in the way may get knocked down.

Elder says there is a clear determination to develop areas of the city as a coherent package.

"Getting the right result is more important than being constrained. We will fail through being timid."

It is the only way to bring in the corporate-scale investment needed - the offshore money from Australia and Asia, he says.

"They're saying we will put out a proposal call on two city blocks for this type of development in there - whether it's a health precinct, residential, business, a convention centre and hotels - and get people to come and bid.

"And if we have to get rid of a landowner or two, or close streets to do that, then we will if the quality is good enough and the business case is good enough."

There will be property owners who will complain, says Elder, but for most it will be a better deal. They will end up with shares in a larger land-owning company. [Emphasis added]

How much work would you put into planning what to do with your property if, on top of the insurance and regulatory hassles, this kind of thing loomed?

You don't need compulsory acquisition to amalgamate lots of small titles. Just buy options on the properties you think might be needed for any project. Any of the option contracts can specify a schedule of compensation prices that rise with how far any owner's gotten through redevelopment when the government wishes to exercise the option. Do it right, and there's no incentive to sit around waiting to see if you'll be expropriated.

There's a great case for buying out landowners to make way for big projects so long as those projects are worthwhile. But I'd be awfully nervous about this kind of language if I were a downtown land-owner and wondering whether I should bother rebuilding.

Free advice

We've hit the point where the perception of a rental housing crisis in Christchurch probably matters more than the underlying stats.

Gerry Brownlee points to aggregate figures on rental prices in Christchurch to argue that our increases haven't been astronomical relative to those elsewhere in the country, but aggregates can conceal a lot. A forty dollar a week increase in average rental prices implies very different things about overall affordability if it comes from large increases at the bottom end of the market and minor increases at the top than if it comes from proportionate increase across the board; I suspect the former is what's going on.

Every time I read the comments sections on The Press's reporting on the housing crisis, I see evidence of strong heterogeneity across the market. Lots of people report large rent increases and trouble finding anything that's liveable within their budget; a few landlords report problems in finding tenants for decent sounding properties at reasonable prices. Location matters in housing though - people have jobs in fixed locations, kids in schools, and might need access to public transport.

Even if Brownlee were right and my hunch were wrong, he still comes across as heartless. And Brownlee is right about one thing: proposed rental subsidy schemes will just push up the price of rental housing absent supply moves.

Some supply moves are coming. Housing New Zealand's stock of social housing seems almost ready to come back on-stream. I expect that the biggest part of the delays here have been insurance related - Housing NZ owns a lot of properties and I'd expect that their insurance coverage is split across multiple insurers. If different insurers covered different portions of the burden of costs coming from different events, as would have been the case, for example, if some insurers wanted to reduce their exposure subsequent to the September event, then there were almost certainly fights among the insurers about what proportion of damage across the hundreds of Housing New Zealand owned houses were caused by September, Boxing Day, February, June, and other events. Rushing to repair before the insurance were sorted would make it impossible to sort out which insurer were liable for which portion of costs and likely would have wound up costing the government rather a lot in forgone insurance payouts for repair costs.

My free advice to Big Gerry. Get some data on rental availability at the bottom tail of the distribution: stop looking at averages. One place you could look is bonds placed with the Tenancy Board.* Separate bonds out by quartile and look at the movement in the bottom quartile of bonds placed over the last five years. Then say something like the following.

When we look at aggregate changes, Christchurch's rental price increases have been higher than elsewhere, but not alarmingly so. But averages mask a lot. There has been a substantial reduction in the number of rental properties available and, in particular, at the lower end of the market. While we applaud the sentiment behind some proposed initiatives, like rental subsidies, these do not really address the core problem: lack of available housing options at the bottom end of the market.

Then announce that you have instructed Christchurch Council via your Powers As Grand Poo-Bah to allow home owners to build self-contained flats into their current properties. This is the single best thing you can do to get properties on-stream quickly and at reasonable cost. Why?

• You need to sort out insurance messes to build new houses. Anybody building a flat into his currently owned and insured property already has insurance; the coverage just extends.
• Building new greenfield or substantial brownfield developments requires sorting out infrastructure. That takes time. A whole bunch of individual homeowners each putting in a small flat spread out across the city does not. 
• If I'm right about heterogeneity mattering, then who is better placed to figure out which parts of town need more rental accommodation than homeowners in those parts of town who can see what's going on with rents and availability in their neighbourhood?
• It is a policy that costs nothing if there actually is no housing crisis. I'm sure that more than a few folks in government remember the big push last winter that led to a pile of unused rented caravans meant for the homeless. 
• It's scaleable and only scales to the extent that property owners expect there to be real demand for the properties. 

It's a policy that works if it's needed, isn't a bad idea even if it's not, and is a good political move in either case relative to denying the existence of any kind of housing availability problem. 

* Landlords charge up to four weeks' rent as bond; this money is placed with the Department of Building and Housing. Surely they know how much money has been put up as bond over time and the number of weeks' rent it represents. Advantage: this gets you current rental cost for folks switching houses - the people who are displaced and are seeking new accommodation. Average rents might not have increased by as much as rents on those shifting properties if landlords worry about long term relationships with existing quality tenants. 

Downtown awesome

Rebecca Macfie's must-read article on Christchurch redevelopment highlights some of the grassroots downtown awesome going on in Christchurch. Case in point: the Dance-O-Mat:

“The response was overwhelming,” says Reynolds. “They [supporters and volunteers] said ‘you have to keep doing it’.” Since then, Gap Filler has become a charitable trust, Winn has become the paid co-ordinator, and many more gaps have been filled. One of the most outrageously successful was the Manchester St Dance-O-Mat – an open-air dance floor and a coin-operated washing machine converted to provide 30 minutes of light and power to an iPod and speakers. Reynolds: “People said Christchurch people wouldn’t dance in public. Well, Christchurch showed us.”

On one freezing Friday night in late May I learnt ceroc, salsa and swing moves among dozens of strangers; suddenly, it didn’t matter that we were surrounded by demolition sites and that the central city was gone. Based on the number of $2 coins pushed into the slot over the project’s two-month life, Winn calculates the floor was danced on by 2000 people. Although the dance floor’s now been packed away for winter, she says the Christchurch City Council is keen to re-establish it permanently. “So we may gift it to the council.”

It’s hard to overstate just how powerful and invigorating this is: young, clever creatives with little money but a huge appetite for trial and error are doing urban design on the fly, and proving that small-scale, inventive spaces will draw people out and restore life to a wasteland. And, says Just (who is also a Gap Filler trustee), it’s radical on another level, too. “It’s turning private space into public space. So a 60-year-old becomes an urban activist by dancing on the Dance-O-Mat.”

We hit the Dance-O-Mat one Friday night, along with a colleague and her family. Two economists, two econ-spouses, and three kids, dancing to the Hayek-Keynes rap. Was excellent.

Macfie points to some of the problems in routing through the bureaucracy for the Smash Palace bar:

Eventually, he alighted on a bare section at the corner of Victoria St and Bealey Ave, and came up with the idea of parking an old bus on the site and converting it into a relocatable bar. There’d also be a caravan where his sister Rosie would run a cafe, and a couple of temporary buildings for toilets and kitchen. The wind and dust would be kept out by plastic sheeting attached to scaffolding around the perimeter of the site.

The city council’s planners were enthusiastic, as was business support agency Recover Canterbury. Lots of people lent moral and practical support. He started working on the site in October, with ambitions of having the new bar, called Smash Palace, trading by Christmas. Then began a protracted Kafkaesque battle with the Christchurch City Council’s consenting division. Because the bus was judged to be a building, it needed building consent. That meant concrete foundations had to be laid, and the body of the bus tied down.

The handrails had to turn down 90 degrees at the end, and the way they connected to the decking around the bus had to be drawn up by an architect. The wheelchair ramps had to be at a gradient of 1:12. A near-enough 1:10 was not good enough. Then it turned out the scaffolding was also classed as a building. Moore mounted futile protests before complying with the consent department’s demands to provide engineering certification – only to be told the council needed to farm out the approvals to a consultant in Auckland. At his cost.

... But Moore believes the whole process cost him an extra $50,000, and it drove him to his wits’ end. “Personally and mentally it broke me down. I got to the point where I was seethingly angry. I’d go to bed angry and dream hateful dreams towards the council and I’d wake up hateful.”

He found himself drinking and smoking too much, losing sleep and chewing his nails. Without more pragmatic interpretation of the rules for temporary outfits like his, quakehit businesses will be driven from the city, he says. “The Building Act is fine when it’s business as usual. In Christchurch at present it’s not business as usual.” The council’s building operations manager, Ethan Stetson, is unapologetic. Yes, he says, post-quake Christchurch needs creative entrepreneurs like Moore, who are “the life-blood of the city.” But building quality, fire protection and disabled access still matter.

Read the whole thing. If the son of the former Mayor can't get through the bureaucracy except at massive personal cost, what hope is there for others?

Meanwhile, Christchurch's new "Ministry of Awesome" is trying to encourage fun new projects for downtown. Lots of the ideas there highlighted are patently absurd, and one is just a bit too goatse. Update: somehow, I lost the last line: But it's great to have a way of getting ideas out there!