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Foreign Affairs

Autocracy on the March

Even a casual observer of the Arab world knows that democracy has made little headway in the region in recent years. According to a new report by the Carnegie Endowment for International Peace, that won’t change anytime soon. While talk of political reform echoes in some Arab countries, and while others inch toward openness and democracy, the authors argue that such advances are little more than a front for preserving the power of authoritarians—and for propping up their economies. “The goal has not been democratization but modernization,” the study says, “both as a genuine attempt to improve the quality and efficiency of governance and as a cosmetic device to make the system look better and thus be more acceptable.” Morocco, for instance, has expanded human rights and made limited electoral reforms while leaving power “firmly in the hands of the king.” Other Arab autocrats have publicly tolerated opposition parties while working behind the scenes to divide or discredit them. Even in countries where reformists have reached important positions, “they have yet to attain control of real levers of power.” But real progress toward democracy in the Middle East, like free elections, could bring Islamist groups to power, as happened with Hamas in Palestine two years ago. The U.S. and Europe, the authors argue, will therefore continue to support limited top-down reform, and power in the Arab world will remain “in the hands of kings and presidents.”

“Incumbent Regimes and the ‘King’s Dilemma’ in the Arab World: Promise and Threat of Managed Reform,” Marina Ottaway and Michele Dunne, Carnegie Endowment for International Peace

Public Health

Smoke ’Em If You Got ’Em

Can smoking cigarettes actually save lives? When some state and local governments banned smoking in bars, the number of fatal car accidents involving drunk drivers rose by about 13 percent, two economists recently showed. In the most extreme result, they found that fatal accidents in Jefferson County, Colorado, increased by more than 40 percent after neighboring Boulder County instituted a ban. Although a portion of the smoking population simply stays at home to drink after bans are enacted, the researchers argue that many other smokers seek out bars in locales where simultaneously imbibing and inhaling remains legal. Given the greater distance to a bar in a neighboring county or state, the authors surmise that smokers in towns with bans log more drunk-miles, leading to more alcohol-related accidents. Growing evidence from neurological research also suggests that smoking lessens a drinker’s level of intoxication, and that nicotine deprivation can sharpen the urge to drink. As a result, the authors say, smokers who comply with the ban and elect to booze close to home may be drinking more, or getting more drunk from the same number of drinks. While a national smoking ban could offset some of the increase in fatalities, perhaps alcohol, like coffee, is simply best (and safest) when enjoyed with cigarettes.

“Drunk Driving After the Passage of Smoking Bans in Bars,” [PDF] Scott Adams and Chad Cotti, Journal of Public Economics


Middling Through
From Atlantic Unbound:

"Midlife Myths " (April 15, 1997)
Far from being the slough of despond it is considered, middle age may be the very best time of life, researchers say—the "it" we work toward. By Winifred Gallagher

What’s the saddest time in life? The trials of adolescence? The decline of old age? According to a recent study, for most people it’s middle age. Studying data on 500,000 Americans and Europeans, the researchers consistently found a “turning point” in midlife: happiness falls as we progress from youth into middle age, bottoms out in our 40s, and then rises again into the golden years. The authors estimate that American men are least happy at age 49, and American women at age 45. The decrease in happiness between ages 20 and 45 equals about one-third of the drop a person would report after losing a job. A range of theories may explain this “U-shaped curve.” Perhaps older people can better count their blessings, or maybe they know themselves better in maturity and can “adapt to their strengths and weaknesses” without getting carried away by the dreams of youth. The data suggest that rather than buying a Harley to shake the midlife blues, 40-somethings might head to Europe: while Americans have grown grimmer over the past century, Europeans report feeling happier and happier.

“Is Well-Being U-Shaped Over the Life Cycle?,” David G. Blanchflower and Andrew Oswald, National Bureau of Economic Research


Manifest Density

The secret of Wal-Mart’s success may also be its Achilles’ heel. Thomas J. Holmes, an economist at the University of Minnesota, found that as Wal-Mart started colonizing the U.S. retail mar­ket, in the 1960s, it methodically expanded outward from its base in Arkansas, keeping its stores close together. When Holmes measured the effects of this “economy of density,” he found that although the strategy was key in boosting Wal-Mart’s enormous profits, growth opportunities are now limited, as the company has essentially exhausted its ability to expand. Building stores in tight clusters saves money by keeping trucking costs down and helping the company respond to shifts in demand. But those stores also tend to cannibalize each other’s sales. The author estimates that existing Wal-Marts cut sales at new stores by about 10 percent on average. That overlap hurts, but the cost of spacing stores farther apart is astronomical. Moving a store 100 miles from a distribution center can raise its yearly costs by more than $500,000. If every Wal-Mart store moved 100 miles farther from its distributor, total costs would go up by at least $1 billion a year. The author also points out that Wal-Mart can no longer simply spread to new turf at will. Its attempts to conquer urban markets have foundered, not only because of higher property costs and stronger unions, but also because greater population density hurts the company’s bottom line. In rural areas where Wal-Mart is the only game in town, erecting a store five miles from a population center barely affects demand. But in larger urban areas with more stores to choose from, those five miles would cut demand by 80 percent. People who fear that yellow smiling faces will one day rule America can take solace: even Wal-Mart has its limits.

See an animated map of Wal-Mart store openings from 1962 to the present
(Video created by Thomas Holmes, University of Minnesota)

“The Diffusion of Wal-Mart and Economies of Density,” Thomas J. Holmes, National Bureau of Economic Research


A Working Girl Can’t Win

Prostitutes make good money, a new study argues—but not enough to offset the risks the job involves. The economist Steven D. Levitt and the sociologist Sudhir Alladi Venkatesh sent researchers into the streets of Chicago to record how much prostitutes earn and to assess the hazards they face. Analyzing Chicago Police Department data on prostitution arrests, the authors argue that paying for sex in some ways resembles paying for any other service on the open market. Almost half of prostitution-related arrests were made on just 0.3 percent of the 25,000 city blocks surveyed, and prostitution incidents tended to occur along major streets—suggesting that prostitutes, like other retailers, need to display their wares in concentrated and consistent locations where potential consumers congregate. As far as sales are concerned, the setup seems to work: the prostitutes surveyed over a two-year period averaged $27 an hour, or about $300 to $400 a week. Women reporting to a pimp fared even better. Although they had to hand over 25 percent of their earnings, they still made roughly 50 percent more than women without pimps. Compared with the wages these women could earn in retail sales, hairstyling, or babysitting (from $67 to $145 per week), prostitution looks like a much better deal. But the authors suggest that the dangers of the job outweigh the financial incentives. Not only did prostitutes engage in sexual acts without a condom 75 percent of the time, they also were the victims of abuse by clients or pimps once a month on average.

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