Author Archives: Christopher Kam

Wow! Long time since I blogged; all caught up travelling and entering data. (Little known fact from said data entry: more tax was collected in Derby than in cities several times its size in the 1850s & 60s — and this was solely due to the great wealth & extensive holdings of two of the city’s inhabitants: The Duke of Devonshire & the brewer, Michael T Bass!)

Anyway, on with the blog post, the subject of which is the relationship between our prior beliefs and the evidence we confront (or, as it happens, avoid confronting). This was provoked by a conversation that I had with Hadrian (my 5-year old son) as we walked home from school yesterday.

“Dad, there was a monster in the school today.”

“Really? Did you see it?”

“No, but there was a funny fishy smell in the bathroom. In the girls’ bathrooms too! Oh, we [i.e. Shea (H’s best friend) & Hadrian] didn’t go in the girls’ bathroom… boys aren’t allowed to, but we sent Stella in to smell and it was fishy there too. It was the giant fish monster, for sure!”

“It was probably just a backed up pipe…There are no giant fish monsters in your school bathroom. It couldn’t fit for one thing.”

“No, it was a fish monster… one that could mutate and change size, obviously” (Hadrian really does say “obviously” … mostly when he’s explaining things to one of his dear but oh so dim parents, as in “Oh, Daddy[sigh], obviously…”)

“There are no monster, no mutant fish monsters, and not in your school bathroom… and the fishy smell could have been a lot of things, a backed up pipe, smelly garbage cans… Let me ask you, what do you think the chances of just running into a monster are?”

“About 50-50.”

“What about in closets or under beds?”

“Closets, about a lot, almost a thousand! Under beds about 50-50. And outside there a lot too.”

“Well we have very different priors: I think there’s zero chance of running into a monster, and I think a lot of stuff could cause the fishy smell, so I’m pretty sure there was no giant fish monster in your school bathroom.”

Small silence…..

“It was a mutant fish monster, I said.”

Now, I can’t claim to be a Bayesian statistician and I’m not much of a philosopher, but what I found interesting about this conversation was relationship between priors and evidence.  As funny/cute/odd/fantastic as Hadrian’s priors of running into monsters are, they are not the real problem with his reasoning.  Certainly, the strength of Hadrian’s priors strongly effect his conclusions:  if you start out believing that it’s a virtual certainly — about 1000, no less! — that there are monsters in closets, you’re likely to conclude that ther IS and monster in THAT closet.  The real problem with H’s reasoning is that he takes virtually all evidence as confirming his priors – hence his ex post certainty about a monster in the school bathroom after encountering the “fishy smell.” (Well, to be fair to Hadrian, Stella did provide independent confirmation of the smell.) This got me thinking about how often  social scientists (including me too often) operate similarly:  we have in mind a particular causal explanation and then seize on any piece of evidence that’s consistent with that explanation as confirming our pet explanation.  But unless the evidence we encounter is particularly well identified, i.e., it could only be caused in one particular way (and we are aware that it could only be caused in that way), confirmatory evidence is pretty useless.  ….Then again, it could have been a fish monster….of the mutant sort, of course – even dads know a giant one couldn’t fit!

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My friend, Simon Hix (LSE) retweeted a column in the Economist about the recent Straw-Rifkind cash-for-lobbying scandal.  The Economist’s view was that these sorts of issues (broadly, MPs having to seek outside income) could be avoided by paying UK MPs more. I’ve actually been doing research on this topic, and I’ve read a fair number of academic papers on the topic.  Let me offer some off-the-cuff remarks on the basis of what I’ve found in my data and what I have read:

• Paying politicians is a double-edged sword:  increases in pay theoretically attract “better” types into politics, but they also attract “bad” types who are motivated solely by the money.  The idea is that these bad types have very poor options in the outside economy, but if political pay is high, then the bad type might as well “buy a lottery ticket” as it were and run for office.  So say Caselli and Morelli (2001). It then becomes an empirical question whether good types outnumber bad types among candidates, and if elections are somewhat random you may end up electing more bad types.
• It’s actually very hard to assess the impact of improved pay on legislators because in most legislatures all members receive the same pay.  This makes it hard to disentangle changes effected by the improved pay from those effected by, e.g., simultaneous changes in the outside economy. (Certainly, we pay ministers & such more, but ministers get all sorts of other perks & influence that we can’t tell whether it’s the pay or the other perks that make minister different from backbenchers.)  There are some exceptions to this rule:  MEPs used to be paid what their respective national MPs were paid.  This meant that, e.g., Bulgarian MEPs  made less than German or French MEPs.  This rule was then changed so that the MEPs from lower-paying countries secured a significant raise.  Fisman et. al. (2012) looked at how MEPs responded to this change:  the results were in line with the Caselli and Morrelli predictions:  the educational level of MEPs elected in the effected countries declined and the number of candidate running increased in line with home country corruption, i.e., bad types were increasingly attracted to office.
• My own analysis of the impact of pay increases on Canadian MPs suggests to me that the returns to increased pay in countries like Canada will be small.  The reason is that Canadian MPs’ pay levels already put them into something like the top-3% of income earners in Canada.  So any pay increases are likely to produce very marginal changes in behaviour.  Also, given the long right tail that characterizes the income distribution (especially in a place like London), you have to think about how much you are going to have to increase MPs salaries to effect visible behavioural change, x 2, x 3 of the current rate? And per my point above, how would you know if this pay increase worked?  It is precisely because these effects operate at the margin that I think that papers showing real & positive changes from paying politicians in, e.g., Brazilian municipalities (see Ferraz and Finan 2008), are of limited relevance to national legislators in advanced industrial democracies.
• My intuition is that a strategy-proof contract would pay politicians sufficiently to make them indifferent between entering politics or continuing to operate in the outside economy. So we’d pay a MD or a corporate lawyer a lot more to be an MP than a school teacher.  Now, you’d probably have to offer a bit more compensation given that MPs travel extensively and must maintain a 2nd residence. For example, you’d have to pay me a LOT to trek from Vancouver to Ottawa in February.  Ottawa… Ugh.  But, then, somebody from say, Hull or Sheffield (apologies) might pay to be able to live and work in London. I’m just saying.
• I think we ought to worry about just two things when it comes to paying politicians:  1) do we pay them sufficiently to ensure that Parliament is representative, especially in an economic sense.  Recall that MPs were not paid prior to about 1910, and the House was at that time the preserve of plutocrats – not good.  2) Do we pay politicians sufficiently to ensure probity in office?  This was the Economist’s argument – and there’s something to it.  However, as I pointed out above, simply raising pay may not achieve this end – you could just attract more bad types to Parliament.  It may be more effective to offer a lucrative pension subject to good behaviour & contingent on staying out of lobbying etc. after leaving politics.  I’d love to hear from some micro-economists about that idea.

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I am on writing on the heels of an Ottawa Citizen column that my buddy, Peter Loewen (@peejloewen), wrote regarding Eve Adam’s defection to the Liberals. The thrust of Peter’s argument was that we should dispense with the moral outrage at Adam’s crossing the floor: it’s hypocritical of us to admire ambition and tenacity outside of politics and then condemn it in our politicians, many of whom (notably Trudeau – aka, “the Spaniel” as I affectionately call him) were as opportunistic as Adams.

I’d like to add another reason we ought not to be outraged by Adam’s floor-crossing:  it’s actually fairly common event.   I used data from the House of Commons (here) to construct a graph (below) that shows changes in the party affiliation of members of the House from 1962-2015. (Click on it to get a decent size view.)  Note two things: 1) I’ve expressed these changes as a percentage of the House’s membership at the time to account for the fact that House has grown from 264-308 members over this time frame; 2) I based these percentages on the number of members who changed affiliation not the number of changes of affiliation.  For example, David Kilgour left the Conservatives in 1990, sat as an independent for a couple of months, and then joined the Liberals in 1991.  I count that as 1 MP changing affiliation, not as 2 changes of affiliation. There’s no right or wrong about this, but my method is the more conservative one — and even then the take home point of the graph is that changing party affiliation is a pretty common affair in the House of Commons.

I went through each change of affiliation and classified each one as due to a i) party split, ii) a defection (i.e., the MP quits the party), or iii) an expulsion.   Changes in party affiliation that come from party splits (e.g., Bouchard et. al leaving the Tories in 1990 to set up the Bloc) creates spikes in the data that catch the eye, but changes in affiliation due to defection are more common. About 1.5% of MPs per Parliament change affiliation, so about 1 a year… every year, for the last 50+ years.  So there’s another reason that we ought not to be shocked by Eve Adam’s defection: it’s mundane.

OK, so the data don’t support moral outrage and shock, but they are perfectly capable of supporting sullen resignation and disappointment. And if that’s how you feel about all this floor-crossing, then let me say that I do think there are reasons to feel worse about it now than, say 40 years ago.  The problem with Eve Adam’s defection is that she neither represents nor is representative of any identifiable community, interest, or ideological perspective.  She is, in effect, a fungible indenti-kit politician of the sort that proliferates in an age of professional politics.  This, I’d argue, is quite different than it was 40 years ago.  Many of the folks who came to the House both represented and were representatives of an identifiable community or interest.  There was no doubt, for example, that “Cactus” Jack Horner (who defected from the Tories to the Grits in 1979) represented Western farmers, Similarly, when Donald Johnston quit Turner and the Liberals over Charlottetown and Free Trade, he was representing a traditional strand of Canadian liberalism.  But to an extent, Peter was right in his column when he suggested that our politicians’ failings are ultimately our own: what we would expect an increasingly monolithic society* to produce but fungible indenti-kit politicians who can inhabit one party as easily as another?

* Don’t let the hyper-partisanship fool you, political ideology is pretty monolithic these days.  If the left-right divide has grown wider since the 1960s and 1970s, its also come to define an axis of identity not of competition as Bartolini and Mair (1990) put it.

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