SCOTUS and the ACA Ruling, Context and Analysis: Part 2 – the Medicaid expansion

The second key argument concerned whether or not the expansion of Medicaid provision, and its denial to states who don’t comply, puts an onerous burden on states, impinging on their sovereignty. The debate about “fiscal federalism” and the use of federal grants is an old one, and has traditionally been seen as one of the biggest threats to states’ autonomy.

That three of the majority (Kagan, Roberts and Breyer) held that withdrawal of existing Medicaid funds would be an unacceptable infringement of states’ rights seemed to be the most consequential reservation placed on Obama’s bill. However, in constitutional terms it is not much of a revolution. Ever since Massachusetts vs Mellon (1923), it has been ruled that federal grants have not been seen as an impingement of states rights, for so long as they are “inducement” and “not foisted upon States, no violation of sovereignty occurred. States had to choose between accepting Federal conditions and having no Federal support at all” (Bowles 1993). The Garcia vs SAMTA case referred to in the last post seemed to uphold Federal government’s ability to interfere in state’s affairs like any other employer when it comes to invasive mandates, but, as the arguments had hinted at, the Rehnquist court’s later rulings may have overtaken this, providing “enforceable limits on Congress’ ability to interfere with state sovereignty.”

As it happened, the PPACA ruling was very consistent with the ruling of Massachusetts. New Medicaid funds extended to the states may only be given if the states’ accept their conditions, which aren’t onerous so long as they’re voluntary, in line with the precedent in fiscal transfers. However, pre-existing funds may not be removed, as such moving of goalposts after initial conditions have been accepted would be an infringement of state sovereignty. This too is entirely consistent with precedent.


SCOTUS and the ACA Ruling, Context and Analysis: Part 1 – the Commerce Clause

So SCOTUS has ruled, Roberts has switched wings and Obamacare has been upheld (for the most part). Hands up all of those who predicted that.

The arguments were heard in March, and the tone taken by many of the Justices, Roberts chief among them, was one of hostility, which was taken by many observers as a bad omen for Obama’s bill. There were four points debated at those arguments. Two of these are irrelevant for today’s ruling; firstly, they decided that it wasn’t too early for the case to be heard (evidently) and secondly, they had discussed whether the individual mandate was separable from the rest of the bill if it was invalidated, which in the event it wasn’t.

The two remaining parts concerned a) the use of the commerce clause to justify the individual mandate to compel individuals to purchase insurance and b) whether the strings attached to Medicaid provision was an onerous burden under the 10th Amendment. In this post, I shall focus on part a).

The interstate commerce clause is the Article I power, under the constitution, for Congress to regulate commerce between states. Given that, under the 10th Amendment, all powers not explicitly reserved for the Federal government are delegated to the states, it has been a historically significant clause in the history of Federal intervention into the economy, and appeared to be the strongest constitutional grounds on which the individual mandate was likely to be upheld. Thus, the blunder by CNN and Fox in declaring that the ACA was unconstitutional because the commerce clause did not apply to it was understandable, even if avoidable/hilarious.

The sources of worry for the the Obama administration were clear enough. The Roberts court had not ruled many cases on the commerce clause, but seemed to be sympathetic to the Rehnquist court’s “partial” revolution in federalism, where use of the commerce clause was being reconsidered. The constitutional context in which the Roberts’ Court operated in was complex. Since United States vs Carolene Products Company (1938), there had been a precedent that regulation of commerce, as Justice Stone wrote, would be presumed constitutional unless it was clearly not. Thus for any federal law that attempted to justify intervention under the constitutional right of the national government to regulate interstate commerce, the burden of proof was shifted so that regulation was unconstitutional only if demonstrably not to do with interstate commerce, rather than presumed unconstitutional unless proven to concern interstate commerce. So we get cases such as Wickard vs Filburn (1942), where quotas for wheat production may be set federally even if none of the wheat is traded across state borders, because of the (marginal) effect that the wheat production will have on the price of wheat nationally.

In this post-New Deal context, the individual mandate would appear to have been quite a clear cut case of federal intervention that was constitutionally justifiable under the commerce clause. Entry or non-entry into a health insurance market has large effects on other consumers in the market. The much mooted “broccoli market” analogy  (that if you compel people to buy health insurance, why not compel them to buy broccoli?) falls short, because the market for broccoli doesn’t impose negative externalities on other broccoli consumers. If an individual chooses not to enter the broccoli market, then there may be a minute price fall, as demand falls. But if relatively healthy individuals don’t buy health insurance, as the average insurance price is (by definition, as an average) above their expected costs of illness, then this drives the price of insurance up for the most needy. Higher premiums mean more people find insurance not worth their while, further driving up premiums if they are the new “relatively healthy” contingent (as is likely) and also leaving more of the populations uninsured. This is an instance, as I’m sure many of you know, of Akerlof’s Market for Lemons. It is not applicable, however, to the market for broccoli.

However, the constitutional interpretation of the commerce clause has shifted since Carolene Products. While the Burger court found in Usery (1976) that the Fair Labour Standards Act injured state sovereignty (more on this in the next post), Garcia vs SAMTA (1984) overturned this. It took the Rehnquist court to seriously challenge the permissive readings of the commerce clause that had become the status quo. In Lopez (1995), Board of Regents (2000), Morrison (2000) and Garrett (2001), the Supreme Court held that regulating firearm possession in schools, age discrimination in employment, violence against women and discrimination against the disabled respectively were not covered by the commerce clause. In the words of Chief Justice Rehnquist, delivering the opinion of the court in Morrison, “gender motivated crimes of violence are not, in any sense of the phrase, economic activity.”

However, Gonzalez vs Raich (2005) held that the regulation of homegrown medical marijuana was constitutional, in line with Wickard vs Filburn. This raises a question of whether a conservative leaning court chooses to invoke the interstate commerce clause to regulate things it doesn’t like (for instance, marijuana) while holding that it cannot regulate things it likes (eg guns) or causes it is unsympathetic to (eg violence against women).

A crudely attitudinalist* approach to the Rehnquist era federalism cases may be misguided however, and is certainly misguided in analysing the ACA ruling. For one thing, Roberts decided that the health market was not regulable under the interstate commerce clause, despite its interstate repercussions, but still held that the law itself was constitutional as a tax (the other four justices on the majority distanced themselves from this restrictive reading of the commerce clause). As Matthew Dickinson has tweeted, it seems unlikely that Roberts was acting attitudinally here, even though his decision is conservative in its interpretation of the commerce clause. What is puzzling is why the Chief Justice subscribed to the tenets of the Rehnquist court, and a more restrictive reading of commerce clause than is afforded by Carolene, when he wanted to uphold the law in general. He certainly set a precedent yesterday that the interstate commerce clause may not be read as liberally as it has been done for the last 70 years, and in constitutional terms if not policy ones, yesterday’s ruling may turn out to be an incredibly significant victory for conservatives. However, in policy terms it was not, and it is unclear why Roberts, if he was prepared to find the individual mandate as not constitutional under the commerce clause, was prepared to uphold it on a relative technicality.

* in brief, attitudinalism states that justices vote according to policy preferences, not precedent, and justify these preferences in legalistic language while being unconstrained by “legal” considerations (Segal and Spaeth, 1993)

The art of coalition building in Greece

Following yesterday’s elections in Greece, New Democracy are the largest party, and, aided by their seat bonus, will seek to form a majority coalition with PASOK this afternoon. However, the BBC are reporting that ND are looking to form a “national coalition”. Assuming this is more than a rhetorical device, we might assume that this will result in an oversized governmental coalition (that is to say, larger than the minimal-winning coalition), with all the problems of coordination and unity associated with it.

To put my comparative government hat on for the moment, there are three main reasons why such coalitions can be attractive. Firstly, they can shield the lead party from being held to ransom by their chief coalition partner. Secondly, it can shift the median of the coalition closer to the lead party’s ideal point. Finally, it can be helpful in times of national crisis.

On the first point, consider a centrist party who nearly has an absolute majority, but needs a small number of MPs, let’s say five, to achieve one. Let’s assume there are four potential partners which could provide these five MPs. If the centrist party enters with just one of them, then it is many ways beholden to them; as kingmakers, the minority party holds the balance of power. However, if the centrist party includes all four, then one party’s defection alone will not bring down the government. Moreover, if the parties are ideologically non-aligned, then coordination on when to defect will be hard.

This justification for Greek national coalition building seems infeasible. To counterbalance PASOK’s influence, the ND will have to turn to Syriza, which is unattractive for reasons I shall come on to. None of the other parties can provide a minimal-winning coalition by themselves. The fourth party, ANEL, would come one seat off, and smaller parties come further from providing it. In combination, they can provide a MWC without PASOK, guarding against defection, but no party alone can strip PASOK of its king-making ability.

This is problematic because a broad coalition, dependent on socialists and communists, may find itself having a ideal policy point within the PASOK, not ND, ideological space. The second justification of oversized coalitions is a balancing one, which is why a coalition between Syriza and the ND isn’t plausible – both can get a coalition with just PASOK, and such a coalition would be nearer their ideal point. Thus the ND, if they are seeking insurance, should look rightwards, to counterbalance PASOK’s influence. This further restricts their ability to form an oversized coalition. If they wish to exclude DIMAR and the KKE, the ND will have to depend on Golden Dawn to secure a MWC (with ANEL) and insurance against PASOK defection.

However, the truth is that none of these scenarios seem plausible for a more fundamental reason. The reduction of issue space to two dimensions is dubious at the best of times, but during a crisis such as this, it is additionally flawed. ANEL and Golden Dawn are as anti-austerity as many of the left-wing parties. Our third reason, that coalitions of national unity are likely in times of national crisis, only applies during genuinely unifying forces, against an external enemy during war, for example. The debate in Greece is polarised, but there are still two poles. Parties such as Syriza, moreover, have potentially great political gains to be made from staying in opposition. Collective action problems are manifold, because even if country stands to gain from political stability, the gains from keeping ones hands clean of being in government are potentially large for each individual party. And thus any sort of coalition building, let alone oversized coalition building, becomes all the harder.

So what do I think is going to happen? I think the ND and PASOK will form a coalition, with few, if any, other coalition partners. The problems and costs associated with oversized coalition building outweigh the benefits, even during this time of crisis. What the country needs is decisiveness, one way or the other, and excluded parties will happily provide dialectical opposition to whatever the government proposes. Moreover, the costs of defection for PASOK, as a party that wants to make the bailout work, are high enough without the ND needing to find other partners in order to hold them to their word.

Alone at the top, or ahead of the curve? The regional geopolitics of Joseph Kabila’s presidency

Written 15th April

The 19th April marks the ten year anniversary of the signing of the Sun City Agreement, a peace deal aimed to bring about the end of the Second Congo War. The young President, Joseph Kabila, took little over a year in office to negotiate an framework for the end of the conflict, which had raged since 1998, and saw his stock rise as he received credit for catalysing a deal, making Rwandan reticence seem obstructionist at best and belligerent at worst. On one level this praise may well have been deserved, but there is also no doubt that pressure to end the war from the DRC’s Angolan and Zimbabwean allies played a part in Kabila’s decision. After all, his father’s failure to do so may well have cost him his life.

There is a consensus that the Angolan government, even if it did not order Kabila Snr’s assassination, in likelihood knew about it, and were not all that enthusiastic to stop it (Jason Stearns has a good overview of potential scenarios surrounding Laurent Kabila’s murder). What is less in doubt is that Kabila Jnr. rose to the presidency with the assent of the Angolans, Zimbabweans and other Congolese politicians. Mwenze Kongolo summed up the mood of these patrons when he said “We all came to the conclusion that this young man was the one we needed to keep things under control for the time being, until we have a President again”. Kevin Dunn also put it well when he wrote in 2002 that “it appears that [Kabila] has learned from his [father’s] mistake and is far more willing to follow the advice of his Zimbabwean and Angolan backers… This is in no doubt tied to the fact that Joseph Kabila’s survival is clearly in the hands of these external patrons”.

In this context, one where Kabila was clearly dependent on the support of others for his rise to the presidency, it would appear that his position should be far weaker than it was a decade ago, as his “external patrons” have one by one disappeared. Angola’s historic interest in the DRC was a consequence of a civil war mentality, and the UNITA bases in the Congo that resulted from Mobutist support for the rebel group. Since the end of the war in 2002, Angolan interest in the DRC has dissipated. Robert Mugabe was the only foreign head of state to attend Kabila’s inaugration following the 2011 elections, yet rumours about his health abound, and, long before then, Zimbabwean involvement in the DRC was increasingly unpopular as costs rose, lives were lost and the relationship to the Zimbabwean national interest of military involvement in the Congo were unclear. And domestically, the death of Augustin Katumba Mwanke, described by US diplomats as the “power behind the throne” was a huge blow, as he was seen as a key commercial link to the outside world.

Yet Kabila has consistently confounded those who have underestimated him. He carved his own path ever since his first days in office, acting in a statesman-like manner, both towards his allies but also on the broader global stage. As Gérard Prunier has noted, “devoid of a national constituency, he had decided to treat the international community as his powerbase.” And this powerbase is not one that he has been beholden to, nor one which has been static. In van de Walle’s phrasing, in playing the “politics of permanent crisis” he has exercised remarkable autonomy even as his state has demonstrated limited capacity to maintain security, and as such, changes to the mandate or nature of the deployment of MONUC/MONUSCO in the DRC has been largely on his terms, or at least to his favour. Regionally, his rapprochement with Rwanda and Uganda has shown his willingness to shift with the changing geopolitics of the region, and while this flexibility may have been forced on him to an extent, descriptions of him as a “proxy for Rwandan interests” are insensitive to his agency and capacity to evolve with the times, as what constitutes best serves his interests in self-preservation changes. After all, as Prunier has observed, those who assumed that he was a “front” for Angolan interests a decade ago “were in for a big surprise”.

The Sun City Agreement was in many ways imperfect, but also represented Kabila approaching the peak of his international legitimacy, a period which lasted until at least the elections of 2006. At this time he was given the benefit of the doubt, and the problems of the country were assumed by the UN to be solvable once peace and democracy were in place. The five years leading up to elections in 2011 saw a different tone being taken: one of frustration and one of fatigue, as rebel groups previously external to the FARDC were absorbed into it, and still abuses happened at their hands. However, despite a far less hospitable international environment, Kabila seems to be weathering the storm, and has kept one step ahead of his critics by maintaining a coalition regional support for his government, even if its members change. His problems may multiply, however, if, like his father before him, the Rwandans and Ugandans decide that Kabila Jnr is failing to meet their security concerns. Without being able to depend on Angolan or Zimbabwean support, he might find himself very isolated indeed.

A peacebuilding success? Cracks in Burundi’s fragile post-conflict settlement

News this week that a HRW report on political violence has been suppressed might come as a surprise to those in the international community who like to hail the Burundian experience as a success story when it comes to post-conflict situations.* However, to people who have studied the peacebuilding process, and to Burundians themselves, it is just one symptom of a broader picture which in reality is less optimistic.

Yesterday I saw Dr Devon Curtis deliver a talk about the situation in Burundi and the real nature of peacebuilding. While peacebuilding is often conceived of as a “neutral” activity, it is in fact by nature a political activity too.That doesn’t make it any less worthy, but if practitioners aren’t upfront about the values and priorities which infuse the frameworks they use in peacebuilding (be them centred around liberalism, stabilisation or even local ownership), then there will be problems in the future which will catch them unawares. As in the DRC, the process of peacebuilding has swung between an emphasis on the installation of Western notions of what it is to be a good liberal democracy on the one hand, and the stabilisation of the situation, so that values such as human rights are subordinated to the broader stability of politics in the region, on the other. Thus, the immediate post-1993 situation called for a stabilisation of a potentially explosive situation, whereas the Arusha process was infused with more liberal norms. I don’t think the two priorities are necessarily always so separable – what about the stabilisation ahead of DRC’s 2006 elections, elections that are at the heart of any liberal agenda? – but the dichotomy is nevertheless a helpful one. As Dr Curtis pointed out, both have order at the heart of them. With stabilisation, this is obvious, but even with the liberal approach, the DRC example is illuminating, as it doesn’t address the potential for the militarisation of politics. Overemphasis on the technicalities such as the formal completion of elections and the institutionalisation of power-sharing arrangements can miss the fact that returns to violence are still high in Burundi, and the liberal framework for peacebuilding doesn’t address this effectively. Instead, because elections are being held with regularity and the spectre of genocide has faded, the mission is wound down and declared a success; ignorant of the fact that dynamics of militarisation and control are still playing out in Burundian society today.

With a greater awareness of these issues, perhaps the international community would be more restrained in giving themselves a pat on the back for their great success in peacebuilding, and, by the same token, less surprised when it starts to unravel.

* The UNA-USA also seem to think that only 80,000 people died in Rwanda, so there’s another surprise in store for them there.

An apology

As regular readers will have doubtless noticed, my blogging has been infrequent recently. Sorry about that; I do have an article forthcoming for Think Africa Press but they’ve been having some technical issues so it’s been delayed in posting (and I don’t want to put it up before they do…) Finals are right around the corner so I’m spending as much time laptopless as possible, so as to avoid distraction. But I haven’t forgotten about y’all, and after 7th June I’ll potentially have nothing to do with my life except blog to my heart’s content. Which is something we can all look forward to.

Goldenballs, the prisoner’s dilemma and how Ibrahim could have won it all

This clip of an extraordinary game of Goldenballs has been doing the rounds recently, and as I’ve been brushing up on my micro, I thought I’d do a little guide to how it worked.

The idea of the game Goldenballs is based on the Prisoner’s Dilemma in game theory. In this dilemma, two prisoners are arrested and questioned by police. They have two options, Silence or Betrayal. If they both choose Silence, they both are let free. If one chooses Silence and the other chooses Betrayal, then the Betrayer gets a new life in Monte Carlo, while the Silent one is locked up for ten years. If they both attempt to grass up the other, then they both get 5 years in jail.

Let’s put some numbers on to this. If we have person x and person y, then the payoffs are

<Silence, Silence> <5, 5>

<Silence, Betrayal> <-10, 10>

<Betrayal, Silence> <10, -10>

<Betrayal, Betrayal> <-5, -5>

The idea of the game is that there is an equilibrium at <Betrayal, Betrayal>, even though both players would be better of at <Silence, Silence>. This is because, if you think the other person will remain silent, your payoff is maximised by betrayal (5 < 10) and if you think the other person will betray you, your payoff is maximised by betrayal too (-10 < -5). Therefore betrayal is a dominant strategy for both parties (This is the most basic problem in game theory, so although I haven’t used any grids etc a quick google can put you straight if you’re still confused).

The problem is you have no way of co-ordinating your decision in this one-shot game. Goldenballs introduces a co-ordinative aspect, by giving the participants a chance to discuss their decision. And normally it takes the form “We should co-operate”. “Yeah we should.” “Cool let’s co-operate then” then a question of how honest the people are.

But, as Mr Right (the player’s in this game I’m going to call Mr Right and Mr Left, I’ve decided) has worked out, such an attitude to negotiation doesn’t solve the game. The dominant strategy to betray remains, and the Nash Equilibrium of <betrayal, betrayal> does too; regardless of the good vibes you’ve been getting from your partner through out the game. The incentive is still there to steal.

BUT… this is not the same game as outlined above. The payoffs are:

<Split, Split> <6,800, 6,800>

<Split, Steal> <0, 13,800>

<Steal, Split> <13,800, 0>

<Steal, Steal> <0, 0>

If you think the other person is going to Split, there is a clear incentive to Steal. But if you think they are going to Steal, then you are faced with the payoffs of 0 or 0. They are equivalent. Thus, Steal is only a weakly dominant strategy.

Rather than engage in the fantasy that co-operation was possible if Mr L thought R was going to Split (faced with such a proposition, L would always steal), Mr R sets his stall out: I’m going to steal. This infuriates L – he can’t do anything with that. Whatever he does, he’ll get nothing.

But Mr R offers him a chance of the winnings. Although this isn’t taken very seriously by Mr L, it is (quite literally) better than nothing. His payoff from Splitting if Mr Right steals is now 6,800p, where p is the probability that R keeps his promise. p could be infinitesimally small, but as long as it isn’t zero, it’s better than the alternative.

This is presumably the realisation that L has when he sighs “okay, I’m going to go with you.” He splits, so does Mr R, and co-operation in a one shot game has been achieved.

Is this the only solution to the game? Quite simply, no. Mr R constructed a payoff matrix whereby L had nothing to lose by splitting, but the uncertainty in whether or not Mr R will keep his promise is only uncertain to Mr L. Mr R knows exactly what he’ll do. Let’s call “altruistic” Mr R “Nick”, and evil Mr R “Mick”. If Mr R is Nick, then he may as well play Split too, as p = 1, so his payoff from Stealing is 13,600-6,800 = 6,800, so Split and Steal are equivalent. We could even model a negligible benefit ε of being an internet hit and people knowing how nice you are, so his payoff from splitting is slightly higher. But Mick would do no such thing, and would steal the money and then not share. Then he has to play steal, and once he had, even though on the show we wouldn’t know if he would keep his word, we can assume he won’t, as if he was going to cough up he may as well as split. So for what happened to be a proper solution to the game, we have to make assumptions about the nature of Mr R, and his utility gain from (essentially) being nice (perhaps the size of ε).

But Mr L didn’t play in a totally rational manner either. Because rationality means that one can, essentially, work out everything that I’ve just written above before the game is played. And even though L didn’t know who he was playing, evil Mick or nice Nick, he would have been rational to steal in either case. Mr R’s promise is not credible, not just because once he’s one the jackpot no-one can make him share it (a classic intertemporal problem, which I won’t go into here…) but because, as outlined above, an altruistic Mr R (Nick) would just play Split. At which point… Mr L has an incentive to Steal the whole jackpot! So in fact, even though Nick created a payoff matrix for Ibrahim (aka Mr L) where he only had something to gain by Splitting, had Ibrahim thought through the motivations of what Nick was saying, he would have found it rational to cheat. Perhaps Ibrahim didn’t have enough time to think it through, and Goldenballs’ time limit saved Nick and his altruism.

But perhaps Ibrahim is just as irrational as Nick. As they both had a chance to win it all, and neither took it. In a one-shot game, there can be no future punishment, no way of enforcing agreement. So ultimately, although Nick’s strategy seemed to create new payoffs for Ibrahim, its success rested on trust and a belief in non-rational altruism all the same.