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. disraeli says:

    And the most important think about Mr. Levitt’s posting- the fact that Mr. Myerson won a nobel prize and his most important task is to prepare for Mr. Becker’s workshop like a first year student at The University of Chicago. This is representative of what is amazing about this university, its love of learning and its many successes including how many Nobel Prizes? Makes me prouder to be an alum than the actual recognition of the prize to a deserving professor at my Alma Mater. Crescat Scientia Vitas Excalitor.

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  2. disraeli says:

    And the most important think about Mr. Levitt’s posting- the fact that Mr. Myerson won a nobel prize and his most important task is to prepare for Mr. Becker’s workshop like a first year student at The University of Chicago. This is representative of what is amazing about this university, its love of learning and its many successes including how many Nobel Prizes? Makes me prouder to be an alum than the actual recognition of the prize to a deserving professor at my Alma Mater. Crescat Scientia Vitas Excalitor.

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  3. David R. says:

    As someone who pays attention to what Greg Palast writes, the first question I ask is whether the United States ever intended to build a democracy in Iraq.

    A democratic state of Iraq:
    a) would want the United States to go home (at least that is what opinion polls in Iraq show)
    b) would not necessarily feel like ceding control of oil to multinationals.
    c) may not desire America to put their largest embassy in the world in Baghdad
    d) may not desire permanent American military bases in Iraq

    It is still not clear why the United States was in such a hurry to crush Iraq, given that the official explanations for invasion, such as these from Condoleezza Rice, were wrong:
    “[We have been told] Iraq provided some training to al-Qaida in chemical weapons development.”
    “We clearly know that there were in the past and have been contacts between senior Iraqi officials and members of al-Qaida going back for actually quite a long time.”
    “We don’t want the smoking gun to be a mushroom cloud.”

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  4. David R. says:

    As someone who pays attention to what Greg Palast writes, the first question I ask is whether the United States ever intended to build a democracy in Iraq.

    A democratic state of Iraq:
    a) would want the United States to go home (at least that is what opinion polls in Iraq show)
    b) would not necessarily feel like ceding control of oil to multinationals.
    c) may not desire America to put their largest embassy in the world in Baghdad
    d) may not desire permanent American military bases in Iraq

    It is still not clear why the United States was in such a hurry to crush Iraq, given that the official explanations for invasion, such as these from Condoleezza Rice, were wrong:
    “[We have been told] Iraq provided some training to al-Qaida in chemical weapons development.”
    “We clearly know that there were in the past and have been contacts between senior Iraqi officials and members of al-Qaida going back for actually quite a long time.”
    “We don’t want the smoking gun to be a mushroom cloud.”

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  5. DanC says:

    While the link to the Meyerson presentation is interesting. I would ask two questions.

    The American Colonies were bonded by a fear of European powers and united for a common defense. In Iraq, some factions seem to want to be part of some greater Islamic Empire where Iraq disappears. How will Federalism solve this problem and how do you create a sense of national identity.

    Next, the American Colonies created wealth through private property and the protection of individual rights. The Iraq economy is highly dependent on the value of potential oil revenues. A resource that creates conflict between Iraq factions as they seek the power of the state to distribute the potential wealth. How does this conflict over oil work against the Federalist model?

    Just questions I would ask if I was there.

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  6. DanC says:

    While the link to the Meyerson presentation is interesting. I would ask two questions.

    The American Colonies were bonded by a fear of European powers and united for a common defense. In Iraq, some factions seem to want to be part of some greater Islamic Empire where Iraq disappears. How will Federalism solve this problem and how do you create a sense of national identity.

    Next, the American Colonies created wealth through private property and the protection of individual rights. The Iraq economy is highly dependent on the value of potential oil revenues. A resource that creates conflict between Iraq factions as they seek the power of the state to distribute the potential wealth. How does this conflict over oil work against the Federalist model?

    Just questions I would ask if I was there.

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  7. misterb says:

    There is something like a Maslow’s hierarchy of needs for societies as well as for individuals. First and foremost, a society needs to provide predictability. If I plant a seed, will I be able to see it grow? Dr Levitt’s paraphrase of Meyerson covers a small part of this, but it needs to be extended to the vast majority of human endeavor that is non-governmental. Here Bremer’s conservative principles work against the foundation of stability. As a baby needs its parents much more than a teenager, a society emerging from chaos requires more management. The tragedy of Iraq is that Saddam’s Iraq was a stable society although run by a tyrant. Bremer’s policies destroyed the stability by not respecting the practices that provided predictability for Iraq’s people, merely because they were ideologically inconsistent with his misguided beliefs.

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  8. misterb says:

    There is something like a Maslow’s hierarchy of needs for societies as well as for individuals. First and foremost, a society needs to provide predictability. If I plant a seed, will I be able to see it grow? Dr Levitt’s paraphrase of Meyerson covers a small part of this, but it needs to be extended to the vast majority of human endeavor that is non-governmental. Here Bremer’s conservative principles work against the foundation of stability. As a baby needs its parents much more than a teenager, a society emerging from chaos requires more management. The tragedy of Iraq is that Saddam’s Iraq was a stable society although run by a tyrant. Bremer’s policies destroyed the stability by not respecting the practices that provided predictability for Iraq’s people, merely because they were ideologically inconsistent with his misguided beliefs.

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