What New Nobel Laureate Roger Myerson Is Talking About Tonight

At a Nobel press conference yesterday, a reporter asked Roger Myerson to name the next important thing he had on his agenda. Myerson responded that he had to give a speech for Gary Becker‘s workshop the next day — i.e., today.

The paper he is presenting is not your typical economics paper, especially for someone who just won the Nobel Prize for his highly mathematical contributions to economic theory. Rather, the question he addresses in this paper is how one might think about creating a functional new Iraqi state. His conclusion is that there is no single equation.

Oversimplifying (and probably butchering) Myerson’s arguments, I interpret what he is writing as follows: Paul Bremer wrongly concludes that a good constitution is what is needed to establish a state. What we really need are ways to allow the government to generously pay people who do good work for the government, and to fire or punish government employees who perform poorly. The most effective way to accomplish this goal is to backload the rewards of government service, in the form of actions like patronage. For such a rewards system to work, though, one needs the assurance that the government will make good on future promises. The best way to create the necessary trust is to have strong leaders who have built a reputation on keeping their word.

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  1. DanC says:

    I think Meyerson calls for a form of Federalism with a lot of control at the local level. As people come to know various leaders at the local level they will be able to choose who should go onto national office. I recall he talks about how this country lived under the Articles of Confederation (strong state’s rights) for many years before the political class was mature enough to make a national Constitution work.

    I think this was in a NY Times letter by Meyerson

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  2. DanC says:

    I think Meyerson calls for a form of Federalism with a lot of control at the local level. As people come to know various leaders at the local level they will be able to choose who should go onto national office. I recall he talks about how this country lived under the Articles of Confederation (strong state’s rights) for many years before the political class was mature enough to make a national Constitution work.

    I think this was in a NY Times letter by Meyerson

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  3. Michael says:

    Any time-delayed incentives would inevitably have to compete with the immediate and very real disincentive of being shot in the head for co-operating with the Americans.

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  4. Michael says:

    Any time-delayed incentives would inevitably have to compete with the immediate and very real disincentive of being shot in the head for co-operating with the Americans.

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  5. Jim says:

    ..which is why democracy shouldnt be so eagerly thrust upon people that dont have a clue about sociopolitical institutions.

    these things take time.

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  6. Jim says:

    ..which is why democracy shouldnt be so eagerly thrust upon people that dont have a clue about sociopolitical institutions.

    these things take time.

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  7. lergnom says:

    Arguing with Bremer is kind of like shooting hoops with a one-legged man. Many people have argued that we are merely backing a faction in an uncivil civil contest that often degenerates into violence. This faction, it has been argued with some persuasiveness, has less credibility nationally because it is backed by an invader who has announced plans to leave (and whose own polity is highly divided about the Iraq War). Yes, one needs to build power networks to run a state, but I have argued for some time that our presence inhibits that process because we artificially maintain a government whose anticipated lifespan is not much longer than the day we pull out.

    That said, it is clear that these networks have developed. They just aren’t the ones we prefer: the Shiite militia of al-Sadr et al. If we weren’t there, Iraq would, one way or another, come to a resolution. We prevent that because we want to skew the outcome. The natural response: states within the state, from Sadr City to the Kurdish area.

    The irony of course is that Meyerson’s work argues against our task: we aren’t a dictator, meaning we don’t control the game domain and its parameters. We are “playing” as though we set the rules – which seem to be rather inchoate and malleable – when we don’t. Again, Meyerson’s work applies: al-Sadr is attempting to establish rules within a domain (Shiite Iraq) and is attempting to extend the definition of that domain. We are attempting to argue with him and others about who actually defines the game and we cloak that in a mantle of creating a democratic state because we believe that our aims are the way it should be.

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  8. lergnom says:

    Arguing with Bremer is kind of like shooting hoops with a one-legged man. Many people have argued that we are merely backing a faction in an uncivil civil contest that often degenerates into violence. This faction, it has been argued with some persuasiveness, has less credibility nationally because it is backed by an invader who has announced plans to leave (and whose own polity is highly divided about the Iraq War). Yes, one needs to build power networks to run a state, but I have argued for some time that our presence inhibits that process because we artificially maintain a government whose anticipated lifespan is not much longer than the day we pull out.

    That said, it is clear that these networks have developed. They just aren’t the ones we prefer: the Shiite militia of al-Sadr et al. If we weren’t there, Iraq would, one way or another, come to a resolution. We prevent that because we want to skew the outcome. The natural response: states within the state, from Sadr City to the Kurdish area.

    The irony of course is that Meyerson’s work argues against our task: we aren’t a dictator, meaning we don’t control the game domain and its parameters. We are “playing” as though we set the rules – which seem to be rather inchoate and malleable – when we don’t. Again, Meyerson’s work applies: al-Sadr is attempting to establish rules within a domain (Shiite Iraq) and is attempting to extend the definition of that domain. We are attempting to argue with him and others about who actually defines the game and we cloak that in a mantle of creating a democratic state because we believe that our aims are the way it should be.

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