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Comment by mothballed | Hacker News Reader

Well when we look at rational economic policies take a look at top ~10 in terms of GDP, purchase parity adjusted, per capita:

   monaco, liechtenstein, singapore, luxembourg, ireland, macau, qatar, bermuda, norway, switzerland

Monarchy: monaco, liechtenstein, qatar

One party state w/ elections: singapore, macau

direct democracy: switzerland

represented democracy: Norway, Bermuda, Ireland, Luxembourg

Multi-party representative democracy is less than half. And none of the top 3. An interesting, but uncomfortable, fact. The people are not good at picking economically rational leaders in adversarial elections.

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This is a perfect example of how to lie with statistics. All of these countries are either tax havens or oil-rich economies, apart from half of them having the population of a small city. The economic policy implemented by any of these countries cannot be implemented by a large economy with little or no natural resources, or would you recommend to Germany or Japan to just "HAVE" oil or open their banks as offshore foreign accounts?

> There are many natural economic reasons for GDP-per-capita to vary between jurisdictions (e.g. places rich in oil and gas tend to have high GDP-per-capita figures). However, it is increasingly being recognized that tax havens, or corporate tax havens, have distorted economic data which produces artificially high, or inflated, GDP-per-capita figures.

> ...

> In 2017, Ireland's economic data became so distorted by U.S. multinational tax avoidance strategies (see leprechaun economics), also known as BEPS actions, that Ireland effectively abandoned GDP (and GNP) statistics as credible measures of its economy, and created a replacement statistic called modified gross national income (or GNI*)

Source: Wikipedia on GDP per capita, PPP

I don't think your conclusion about governance is warranted, given the important other factors you aren't accounting for in your list (also presence of large oil & gas natural resources).

What are you saying then, that you wouldn't want to live in Monaco (assuming you had median Monaco income)? That you think large oil & gas resources is good (Venezuela)? I'm struggling to figure out which side you're on

Thinking there is a side to be on is evidence of the problem.

I'm on the side of "looking at top 10 GDP per capita PPP countries is not good evidence for what type of government is better for a country's economy, at least not without far more analysis"

OK can you share more?

You called out per capita GDP as not a great metric but you didn't seem to deny that living in Monaco on a Monegasque income (for example, or any of these other monarchies) would be a bad thing, despite their type of government.

And you called out vast oil & gas resources as essential, or scale-tipping, for the goodness of a monarchy but I'm assuming you are against the US intervention in Venezuela for the purposes of securing such resources for American interest.

Did you have other factors in mind that you did not mention?

> OK can you share more?

No, I don't really care to. I feel like the two confounding factors I've given are sufficient to cast doubt in your attempted causal inference.

I'm also not interested in continuing with you since you don't actually seem interested in the truth, with things like "figuring out which side I'm on" and the absurd non-sequitur:

> but I'm assuming you are against the US intervention in Venezuela for the purposes of securing such resources for American interest.

like what the hell are you talking about.

Those countries are rich in resources or tax-heavens with lax law. Most of them also have very few citizens (down to ~40k in some cases) which are usually also insanely rich. There is no rational economic policies at work here, except to accept all money and don't look at the bloodstains.

Also worth noticing the size of these countries. Mostly on the small/tiny side, besides Norway (an oil exporter) and Ireland (a corporate tax haven)

Perhaps making good economic decisions grows exponentially in difficulty with the population size, especially for “conventional” economies that do not have another cash cow.

I can’t help but notice the absence of a “how shitty is this country for the average person” dimension.

E.g. which of these countries has any kind of youth culture to speak of?

Ireland, but the worsening economic inequality is wearing away at the edges of it from what I could tell on my last visit.

If you're the outdoorsy type, Switzerland.

The reality is to you get way more benefit from attracting a multinational company to shift its revenue to you for tax purposes when you're a (very) small state. This strategy simply isn't available to you when you're the US (which already has major bases for all these companies, it's just not that big a deal compared with their population and govt budget)

I can only assyme that you meant something more akin to "absolute monarchy" but I still feel like pointing out that Norway, Bermuda, and Luxembourg are all monarchies. And of course out of all the monarchies listed Qatar is probably the closest to an absolute one.

And in the inverse Monaco is a multi-party representative (semi-)constitutional principality, so a monarchy as said.

So I don't necessarily disagree with your points, I'm mostly just adding thy these aspects of politics can and do coexist.

But a monarchy/autocracy hardly guarantees you success either. Isn't this Bill Gates and charter schools all over again?

Basically, the boring solution (democracy) gets you boring, middle-of-the-road results, while a monarchy is more likely to get you an outlier. The outlier might be at the top or the bottom of the pack, but because it's not democracy any more you don't have any say, so tough toenails if it's the wrong one.

There's no connection with monarchy at all - the only absolute monarchy is Qatar and we know their money comes from a lot of oil per capita. The other countries all have legislatures involving multiparty democracy with or without quirks/flaws (Switzerland has referenda, the microstates still give their constitutional monarch significant executive powers, Singapore's major party has completely dominated since the 1960s). The more obvious thing they have in common is low populations [relative to resources]

I agree that the top of the list is clearly small-population edge cases, but one could also make an argument that strong, consistent economic leadership yields more coordination and reduces waste and thrash in the market (boom/bust cycles, etc).

All of it still comes down to the competency of that leadership though.

Liechtenstein is as much a monarchy as Britain is. It probably falls more in the direct democracy bucket. Also, the GDP per capita figures for these tiny countries are very missleading because you can have a situation where more than half the work force is commuting into the country every day for work. They increase the GDP but don't count in the capita part.

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