Alfred Stepan and Juan Linz in a review essay (gated) in the most recent issue of Perspectives on Politics.
Certainly there were many important welfare improvements in the United States from the 1930s to the late 1960s, linked to Franklin Roosevelt’s New Deal, the Civil Rights movements, and Lyndon Johnson’s Great Society. In fact, by 1968, equality had improved greatly, with the Gini index of inequality falling to .388, the best Gini ever recorded in the United States. Even so, looked at comparatively, at its best where did the United States rank? Unfortunately, we do not have systematic comparative data for many countries in this period. But we do have some telling data. Two leading scholars of inequality have comparable data for the United States and at least seven other long-standing democracies in advanced economies for the period 1975–77. During this two-year period, four of the seven countries (France, the UK, Sweden, and Finland) had Gini indices that fell between .200 to .250; two of the seven (Germany and the Netherlands) were between .270 to .300; and only one (Canada) was over .300 at. 360. Thus, during the heyday of income equality in the United States, no other country in the set was as unequal as America, and most were substantially more equal. Since the early 1970s, moreover, inequality in the United States has only gotten worse. From an all-time best measure on the Gini index of .388 in 1968, by 2009 the US Census Bureau had put the US, Gini at .469, America’s worst Gini index in many decades.
I respect any reporters who go out and do the work of actually talking to ordinary people, and I especially respect any political reporters who do so, because too much of our elite political reporting takes place within the self-contained Beltway terrarium of politicians, consultants, think-tankers, and other relatively useless fauna. And I have no doubt that the people to whom Theda Skocpol and Vanessa Williamson spoke said the things they are reported to have said, and that they think the things they are reported to think.
It may seem like a no-brainer that low corporate tax rates will attract investment from multinational corporations. However, the empirical evidence is surprisingly scanty, and in a forthcoming article in Comparative Political Studies (earlier non-paywalled version here), Nate Jensen finds no significant relationship across OECD countries, even when he tries to control for endogeneity.
The mantra that governments must remain competitive in the global marketplace by slashing levels of corporate taxation permeates public policy debates and has influenced academic scholarship. To date, few studies have systematically analyzed the impact of lowering levels of corporate taxation on changes in FDI inflows. Utilizing dynamic tests for up to 19 OECD countries from 1980 to 2000 and isolating the impact of time-varying factors on FDI inflows, I find no empirical relationship between corporate taxation and FDI inflows. Using a number of different tax rate variables, control variables, and estimation techniques, I find no relationship between corporate tax rate changes and FDI flows. This null results remains even after using delayed tax rate changes as an identification strategy to mitigate endogeneity concerns.This result has the potential to drive the tax policy literature and the broader literature on globalization and the states in a slightly different direction.
Via Cosma in comments at the other place I hang out, this is a very nice teaching tool for the sole and single purpose of getting this point across to students. NB that you need to be logged into a Google ID to use it. My favorite so far is the .8222 correlation between my random graph and searches for “frogsex” (the mind squirbles).
Scott Page at University of Michigan is offering a free graded course on ‘thinking with models.’
We live in a complex world with diverse people, firms, and governments whose behaviors aggregate to produce novel, unexpected phenomena. We see political uprisings, market crashes, and a never ending array of social trends. How do we make sense of it?
Models. Evidence shows that people who think with models consistently outperform those who don’t. And, moreover people who think with lots of models outperform people who use only one.
Why do models make us better thinkers?
Models help us to better organize information – to make sense of that fire hose or hairball of data (choose your metaphor) available on the Internet. Models improve our abilities to make accurate forecasts. They help us make better decisions and adopt more effective strategies. They even can improve our ability to design institutions and procedures.
In this class, I present a starter kit of models: I start with models of tipping points. I move on to cover models explain the wisdom of crowds, models that show why some countries are rich and some are poor, and models that help unpack the strategic decisions of firm and politicians.