Friday, October 19, 2012

Incentives and the Copper Law

I've been thinking about the incentives in the Chilean Congress to end the Copper Law and replace it with something that gives more control to Congress. The literature suggests that individual members of Congress would be more interested in defense if there was a) more control over funds, which makes defense positions more prestigious; and b) pork for their consituents. Right now those don't exist. Writing a new law that made defense spending the same as other state functions could serve both purposes.

In other words, there should be an incentive to change the Copper Law, which in turn would create incentives to be more actively engaged in defense issues.

Yet we don't see that. Even the law now being debated in the senate currently still includes a (high) floor below which the budget cannot fall and, as I understand it (though I need to read the 2010 Organic Law of the Defense Ministry) keeps control of decisions largely in the executive branch. So, for example, if a member of Congress wished to spend money on, say, a hospital in her district, she can't move funds around. Similar to now, they will be told that there is a certain big chunk of money they can't mess with, and how it will be spent.

There should be an incentive, then, for Congress to vote in favor of giving itself more control. But it doesn't.

There are a number of potential reasons for this. The right doesn't trust the left to spend well. There is latent nationalism--make sure the military always is well equipped because of conflicts with neighboring countries. The military influences the right in Congress. Presidents don't push it hard because they are trying to get votes on other issues and/or their proposals are largely symbolic to give the impression they are doing something.

What we're left with, though, is the fact that the incentives analyzed in the literature just don't hold. Congress remains very passive.


Daniel C. 12:51 AM  

Isn't it also just a matter of congressional weakness? To my layman's eyes, when I compare it to e.g. The US Congress, the Chilean Congress lacks a lot of power to do stuff like shuffle money around. They just get to say yes or no, and affect the wording of the law, but exercise nowhere as much control as other legislatures. So perhaps they don't really feel they could use the money as effective pork.

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