Wolfowitz, Corruption, and Parking Tickets

May 22, 2007
Posted by Jay Livingston

Paul Wolfowitz has finally agreed to resign from presidency of the World Bank. The controversy, at least on the surface, was about corruption. In some countries that received Bank money, some officials used their position to siphon off funds for personal gain rather than playing by the rules. Wolfie had gone to the World Bank as the guy who would sweep out corruption. Then it turned out that Wolfie himself had used his position to secure favors (a job with a high salary) for his girlfriend, Shaha Riza.

Wolfowitz and his supporters, mostly American neoconservatives — the folks who gave us the wonderful war in Iraq— argued that he had done no wrong and that he had played by the rules and cleared the package of goodies for his girlfriend with others at the Bank.

The whole affair raises questions about corruption as an individual and cultural characteristic. I seem to recall studies that contradicted the notion of a single trait that we might call “honesty.” Children who cheated on a test in one situation (in class) were not necessarily the ones who cheated in another (a take-home exam). Obviously the situation, the degree of opportunity it provided for cheating, made a big difference in the rate of dishonesty.

But although situational forces are important, some people may be more prone to dishonesty. The same goes for countries. Researchers, notably at the World Bank, have developed measures of corruption, and some countries consistently rank high (Nigeria, Uzbekistan, Paraguay), while others rank low (Denmark, Singapore).

In low-corruption countries, officials follow the rules even when it might be more convenient and more profitable to break them. In high-corruption countries, officials use the rules for private gain. Usually this takes the form of bribery. If you don’t bribe the right people, they may delay your project with interminable bureaucratic rules. Does this spill over into a general willingness to ignore inconvenient laws?

Ray Fisman at Columbia University realized that the UN in New York provided a ready-made natural experiment. Maybe Fisman had noticed all those cars with Diplomat plates parked in No Standing zones or next to fire hydrants, even though the city reserves special parking zones for them where we ordinary mortals may not park. Why shouldn’t they park illegally? They can get away with it. If Fisman or I parked there, we’d get a hefty ticket ($115). But diplomats have immunity, and they don’t have to pay for parking violations. Still, many diplomats obey the parking signs.

Fisman wondered if there might be a pattern among countries that freely flouted parking rules. So he got the city’s data on parking violations— even if the city couldn’t collect a fine, it still kept records— and sure enough, there was a strong correlation between a country’s score on the corruption index and the number of parking violations its diplomats had run up.



This copy of the graph is not very clear, and even in the original those three-letter country codes may be hard to read or decipher. You can get the full data set and original graph here.

The “culture of corruption” may explain parking violations. But what about Wolfowitz? It’s not hard to explain why a bureaucrat in Chad or Kazakhstan might use his office to secure a cushy job for his girlfriend. That’s just the way things are done. But the US does not have a culture of corruption.

Perhaps it’s more our belief in “US exceptionalism.” One facet of this belief is the idea that the US has a special place in the world and that it has been chosen by God to lead the world and improve the world. Because we are so important and because our intentions are so pure, we need not follow the usual rules and restraints that govern other countries when we try to accomplish our mission. As the World Bank investigation concluded, “Mr. Wolfowitz saw himself as the outsider to whom the established rules and standards did not apply.”

And besides, we have the power to force our will on other countries. Or as Mr. Wolfowitz so diplomatically put it, “If they fuck with me or Shaha, I have enough on them to fuck them too.”

In my mind’s eye, I can see Wolfowitz parking his car next to a No Standing sign and thinking “What I’m doing is so beneficial to the world that I must park in the most convenient spot, regardless of what the sign says.”

What’s My Survey Result?

May 18, 2007
Posted by Jay Livingston
The TV networks have announced their new shows and schedules. The descriptions would be easy to parody if they didn’t already sound like parodies themselves (“a unique, character-driven drama that explores the very different worlds of law and spirituality in a humorous and heartfelt way”).

So I will resist temptation and note merely the presence of a sociological reality show on CBS.

POWER OF 10 polls thousands of people across the U.S. asking them, well, just about everything - from “What percentage of married Americans said they were virgins the day they got married?” to “What percentage of American's believe they are smarter than the president?” Each week, contestants must decide if they have their finger on the pulse of the American majority and can accurately predict the results of these nationwide surveys.

The CBS reality crew is taking us from “Survivor” to survey. Maybe “Power of 10” will be useful in Methods courses. Or courses on American culture.

It sounds a lot like “Family Feud,” and maybe this is just another instance of television recycling its garbage. CBS is starting the show in the summer, a scheduling ploy that suggests they don’t have a lot of confidence in the show.

But then, the last game show to start in the summer was “Who Wants to Be a Millionaire?” and it became a huge hit — probably because the host, Regis Philbin, got his bachelor’s degree in sociology.

Vacations II

May 16, 2007
Posted by Jay Livingston

I was a couple of days too early with the previous post about vacations. The graph I used was from a report that’s several years old. But today, the Center for Economic and Policy Research published a new study by Rebecca Ray and John Schmitt on the topic: “No-Vacation Nation.”

Here are some excerpts from the first paragraphs:

The United States is the only advanced economy in the world that does not guarantee its workers paid vacation. European countries establish legal rights to at least 20 days of paid vacation per year, with legal requirement of 25 and even 30 or more days in some countries.

In the absence of government standards, almost one in four Americans have no paid vacation and no paid holidays. . . .The average worker in the private sector in the United States receives only about nine days of paid vacation and about six paid holidays per year.

Lower-wage workers are less likely to have any paid vacation (69 percent) than higher-wage workers are (88 percent).

US exceptionalism and our ignorance of the rest of the world have consequences. I wonder what would happen if Americans knew that workers in other countries are entitled by law to several weeks paid vacation. Americans are finally beginning to realize that people in other advanced countries do not live in fear of financial ruin because of illness, and politicians are finally beginning to talk about“single-payer” health plans. The single payer is, of course, the government, and these are the plans that used to be vilified as “socialized medicine.”

In a similar way, defenders of no-vacation nation argue against the government requiring employers to give even a few days of paid vacation. On “Marketplace,” the Public Radio business show, a “economics consultant” said, “I don't think it’s proper for the government to impose a one-size-fits-all policy on employers and workers.”



His statement has a familiar ring to it. Economic consultants say similar things about laws regarding minimum wage and workplace safety, and in the 19th century they probably made the same arguments against child labor laws.

Closed for Vacation?

May 15, 2007
Posted by Jay Livingston

“Real estate prices in Paris must be really low compared with New York,” said my son, then fourteen years old. It was August a couple of summers back, and we were on vacation in Paris. Why did he think so, I asked. Was he already, at age fourteen, looking around for investment opportunities?

“Well all these stores and restaurants, they close for a whole month,” he said. “In New York they can’t afford to close for a day.”

He was certainly right about the closings. We had walked around Paris and seen the signs, often hand-lettered, in small shops of all kinds—the household appliance store, the tabacs (newsstands), bakeries, bookstores. “Congé annuel. Nous serons fermés du 28 juin jusq’au 1ère septembre.” The tourist guidebooks even have a section for “restaurants open in August”; unless a restaurant was listed there, you could assume it was closed.

It wasn’t just Paris. Europeans generally get about twice as much paid vacation as do Americans (seven or eight weeks to our four). Paris real estate may have been less expensive than New York, but it wasn’t cheaper by a factor of two. So what could account for those long vacations and month-long closings?

Economists cite taxes. If those extra euros you get for working are going to be taxed at a high rate, why not take a vacation? Unions are also an important factor. In countries like France and Germany, most workers are covered by some sort of collective bargaining arrangement. But that raises the question of why those unions would press for more vacation rather than more money.

That leaves culture. European values and American values differ when it comes to weighing vacation time against more money. Americans can’t understand why someone would close the store when there’s money to be made. They are especially frustrated in Europe when they want to spend their money at one in the afternoon only to find that most of the stores are closed till three or four. Could lunch be more important than doing business? Apparently, it could. Not to Americans, who often eat while doing other work-related things — commuting to work, doing paperwork at their desks—but to the French, the Italians, and other Europeans.

Europeans value vacations not just as a way to relax but as a component of identity and self. “Americans talk about their jobs. The French talk about their vacations.” That quote (I wish I could remember where I found it) gets at the idea that people talk about things that are central to their sense of who they are. If someone tells you about his vacation, the way the people lived, the art in the museums and the folk art in the villages, the interesting foods and the elegant restaurants, etc., he is presenting himself as a certain kind of person, one who is curious about about art and culture and knows quite a lot about these subjects.

Americans talk about work. In fact, it’s not unusual for Americans to talk about vacations as a way to “recharge their batteries.” In other words, we take a vacation so that we can do better at work. And even when we’re on vacation, we now have cell phones and Blackberries to ensure that our separation from work is never complete.

It’s not just a matter of individual preference. These ideas about work and vacation get written into the rules of the society. This month in France, there are only something like twelve official working days. The other 19 days are vacation days of one sort or another. That includes the four Sundays in May. In America, up until a few decades ago, the blue laws of our Puritan heritage required stores to close on Sunday. But those laws have fallen away, and as my son noted, stores can’t afford to close even on Sunday because of competition with the stores that do stay open. If most companies can give only two weeks vacation, you’re going to have a hard time finding a job if you demand four or five weeks vacation.

M. Sarkozy, the newly elected president of France, has said that he wants the French to work more, and he may have some success in cutting back on vacation time. Still, it’s unlikely that Europeans will increase their work weeks to resemble ours. We spend more time at work, and as a result, we make more money and buy more stuff (Americans have very low rates of saving compared with other countries). We have bigger houses and bigger cars and more gadgets. We even have more vacation homes. We just have less vacation.