Rwanda Constitution

In honor of Jacob Srebanize coming to my university, Western Illinois University, to give the University Theme Lecture, I read up on the Rwanda constitution. And from a participatory democracy point of view, it and its development, has blogworthy features.

I presume that all the readers know of the horrible features of the genocide involving Hutu and Tutsi tribes. Political parties are prohibited from "basing themselves on race, ethnic group, tribe, clan, region, sex ... or any other division which\may give rise to discrimination." Yet sadly, this clause was used to suppress other parties, There is a provision where the Senate can lodge a complaint against a political organization with the High Court and appealable to the Supreme Court, and they can dissolve the organization. If this happens, all their members of parliament lose their term.

Interestingly enough both the Chamber of Deputies and senate have reserved seats.

1. women (24 out of 79 deputies)] 30 percent of the senate
2. two members of the Deputies elected by the National YOuth councel
3. One deputy representing the disabled.
4. four members elected from a group of political parties. the constitution provides for this organization
5. two reserved positions for faculty members

The "P)resident of the republic" may call a referendum. We saw this in use in Iceland relating to the bailout of the banks.

Gawanga cites Kirsti Samuels in that after the break from a conflict or authority, there are likely to be participatory constitution making processes and these helpful in legitimizing the constitution and bring the citizen ry together.

Article 45, "Every citizen have the right to participate in the governance of the country, whether directly or through freely chosen represenatives.."

Acorcding to Gasamagera, the creation of the Constitution was done with much consultation with the citizenry (through questionnaires) and with input from civil society. In fact the limitations on parties was done on the basis of the "people's wish" in response to the genocide. They simply did not want political parties. Also,the provisions regarding women having 30 per cent of the seats was put in at the people's request. and at the time of writing Rwawnda has 49% of its parliament women and is the highest in the world.

Also western advisors on constitutions were rejected, because the constitution should be developed by the people.

Participatory democracy is used to deal with genocide trial, 825,000 cases, which could not be managed by conventional means. The term is GACACA.

Gamasara also mentions the participatory democracy aspects of designing the flag, national anthem and national logo.

References:

1. to be blogged later, Kirsti Samuesl 2006, Paradoxes and Compromises in the design of Post Conflict constitutions Research Partnership in Postwar State building, website at http://state-building.org
2. The Constitution Making Process in Rwanda: Lessons to be Learned by Senator Gasamagera Wellars, Senator at the seventh Global Forum for Reinventing Governmment, Vienna 26-29 June 20067
3. Constitution of Rwanda
4. Wikipedia Article on Rwandan Constitution

Miscellaneous referendum news

Switzerland, November 24th, will vote on a referendum prohibiting any business from paying anyone more than twelve times the salary of their lowest earners. Also, there will be a referendum on a minimum wage of 2500 Swiss Franks. ("regardless of whether or not they have a job.") And a short time ago, a referendum passed to eliminate golden hellos and good byes.
Financial Times "Swiss Referendum on Wages of iIgh Earners Stirs Debate" by James Shotter November 12th

Coed Bathroom Law Referendum-- 620,000 signatures have been collected. If passed, it would overturn a law about coed bathrooms.

Cash Shortage in China

Many business are exchanging IOU's, guaranteed by banks, instead of paying their bills in cash. Also banks are extending loans rather than declaring them nonperforming. (Note that China's total money supply is is 110 trillion yuan (about 18 trillion dollars). And their total corporate debt is 145% of GNP with interest payments being nine percent of GNP--more than the US. Total debt is 210 per cent.) of which sixteen percent are these IOUS. Less than a quarter of business surveyed report having access to bank credit. (Although ocassionally these are electronically, most of the the time they are real paper. Each company that eøxchanges them puts their seal on them, sometimes attaching a piece of paper if there is not enough room for all the seals.)

"With Yuan Scarce, Firms Get Stuck with IOUs" Wall Street JournalFriday, April Fourth 2014 page C1 and C2.

China's Minsky Moment by John Mauldin

Parks Referendum

Portland is having a referundum on whether to sell part of a park. This editorial argues that referendums increases polarization rather than reduces it. The referendum will prevent the City Council from giving up any of its park land; editorial says that :
If the accountable elected leaders can’t be trusted to weigh the various factors that make a city livable, then who is?

This election is not a choice between good guys and bad guys – it’s about what process we want to use to make decisions that don’t lend themselves to yes-or-no answers."

Referendum Process Referendum

The city of Springfield, Missouri attempted to make several changes in the referendum process in one Yes/no vote. It narrowly failed. And in learning about YES/NO votes, they decided to split this into several votes. But they did not consider relationships between them. ``

Spain wants Monarchy Referendum

62 of Spaniards want a referendum "at some point" to decide onthe future of the monarchy. I read in Spanish class that the king who just abdicated was very instrumental in bringing in democracy denying the wishes of the dictator Franco who picked him to continue his dictatorship after he died. Yet polls say the vote would be 49% in favor of the monarchy with 32% against. The prime minister argued that the Constitution which set up a ceremonial monarchy was approved overwhelmingly by the people. (But I bet it was a take-it-or-leave-it vote. Wikipedia article on Spanish Constitution referendum says that vote was 91% yes; there was no indication of any options, just yes or no.)

College Debt by Share Mechanism

Federal "Pay As You Earn Repayment Plan" expands and it is anticipated that five million would be eligible. All federal loans are subject to a program where monthly payments are fifteen percent of after-tax income. However, unlike share economy paradigm, it is forgiven after twenty-five years, ten years if the person works in the public sector. The "Pay as You earn repayment Plan" applies to those with loans going to 2007 and earlier, and the rates are lower (only ten percent of monthly income and forgiveness comes after twenty years). And if the participants income rises, they can switch back, possibly automatically, to the ten-year plan. Six hundred thousand student loan borrowers have defaulted. 40% of college students don't graduate in six years. 45% of those who did graduate had jobs that did not require a degree.

Lumni is a private company doing this--so far with five thousand students. I researched this myself. The bankruptcy code states that student loan debt is not dischargeable; thus one can't get a student loan, declare bankruptcy, then enjoy one's high income. However, this only applies to something guaranteed by a non-profit. So a bank, or an individual investor, who does an income-share agreement with a college student can be stymied by the person declaring bankruptcy. Lumni are mostly active in South America; they are working with House of Representative members to give these agreements legal significance. Probably, the agreements would be required to limited to thirty years, to have an exemption for those earning under ten thousand dollars, and "not dictate career choices." I have a problem with the thirty-year limit. One or more fourty-year olds might support some college students. After thirty-years, the loaners would probably still be enjoying their retirement and wanting the income and the students would be in their highest earning years.

By the way, they were inspired by another income-share agreement. David Bowie sold shares in future revenue to finance his income. Milton Friedman also briefly mentioned the idea of income shares.

College Debt: Easing the Burden, Saturday/Sunday June 14-15 2014 B7 and B9, Wall Street Journal Volume CClXIII B1 138.

"Escaping the Student Debt Trap" Saturday/Sunday June 14-15 2014 The Wall Street Journal Page A11

India and Israel

India

"Why Everyone is Afraid of Arvind Kejriwal" by Dhiraj Nayyar India Today International. October 12 2012,Volume V, Number 44, Pages 12 to 17
Jatin Gandhi, "The Man Who could have been Kejriwal" India Today International January 20 2014
AAP Effect, by Kunai Pradham, INDIA Today International , January 20th, 2014, page 14 to
Wikipedia Page on Aam Aadmi Party.

Arvind Kejriwal is an anti-corruption fighter who is building a new poliitcal party, "India Against Corruption" or Aam Aadmi Party (AAP). He is known for naming and accusing of corruption, prominent politicians and their families. He is in favor of decentralization: "gram sabhas" and urban neighborhoods. The "decisions must be taken by the people and not 'experts' or 'officials' ' a direct democracy' However, his documents would reverse the free-market shift in the last two decades of India. Their Visio document does say that "development cannot be guided by the 'logic of capital' or forces of the 'free market' and Guidance should be given by the 'need of the last person.'

Raul Gandhi is also pushing to involve more people in the Congress Party, the "Grand Old Party" of India.

The AAP has come to power in Delhi. And 75% of Indians would like a Chief Minister like Arvind Kejriwal in their state. 43% are interested in their anti-corruption campaign and only one per cent believe in the "decentralization" ideas. These go back to Swaraj, advocated by Mahatma Gandhi, calling on a stateless society. Mr. Gandhi believed that a representative democracy would be unjust.

Israel Two-State solution

The son of the West Bank Palestinian President, Tareq Abbas, says that a two-state solution is impossible. 65% of Palestinians over fifty support a two-state solution; 47% of those 18 to 34 support this. One of the issues is demographics. There will be more Palestinians than Jews in a single state. But the Jews are concerned about being outvoted, a problem is any constitution that specifies a simple majority vote to pass legislation. In my discussion of Arab/Israel peace talks,, I talk about using max of min to determine an agreement, whether it be a constitution for a single state or a peace agreement between two states. (Max of min, means for each proposal, determine which group gives it the minimum number of aye votes. The one whose minimum is the largest is the one that is effective.) In the Constitution Construction Kit, I discuss systems for multi-ethnic voting. . These prevent one ethnic group from dominating government decisions, regardless of whether that group may have more voters or residents than the other.

"Generations Divide on a Two-State Solution" Wednesday March 19th 2014, Page A6 and A7, New York Times Volume CLXII No 56445.

Miscellaneous M (mostly referendum news)

United States Tax System Woes - A Good Summary

Dr. Stiglitz provided a good summary of the current issues in the United States tax system. low tax rates for top tax income earners increases "rent seeking," not investment. That is why I proposed that meaningful investment should be free of taxation, sortition jury approved investments one can put one's income before taxation. These could be exploring for natural resources, biomedical research or investment in the next big thing.

He argues that someone who "earns income from financial innovations " should pay the same taxation percentage as those who do "research to create real innovations that transform our economy and society." I would feel, and perhaps Americans in sortition juries, that the latter should pay less taxes.

Referendum news

(gathered from Google news)

Israeli/Palestinian Peace Agreement

Two cabinet officials say tht the Israeli people should vote on any proposed peace agreement. But Tipi Livni says that "'That is what the national elected us to do--to make courageous choices."

But a better idea is to have both the Palestinians and the Israeli's vote. And they should choose from a large selection of peace arrangements. The maximin proposal wins. (That is the proposal whose minimum percentage from both Palestinian citizens and Israeli Citizins is the highest.)

Princeton University

The Princeton student population voted on changing a penalty for an honors violation and required the Honors Committe to publish statics. http://www.dailyprincetonian.com/2013/04/26/33399/ The issue was a relatively technical issue ( was a student who wrote over the time limit on the exam treated with the same penalty as other violations) The penalty changed to probation to a "standard penalty" of one-year suspension. A 3/4 majority was required on the referendum. http://www.dailyprincetonian.com/2013/04/22/33277/

Taiwanese Nuclear Power Plant

The Tawanese legislature has multiple readings for proposed referendum. This referendum is about whether a fourth nuclear power plant construction should be stopped midstream.

But there is an interesting issue. The vote is to stop construction. In Taiwan, referndum needs a 50% turn out. Thus, by having a positive vote to stop construction, those who don't bother to show up are making it more likely that construction will proceed. That is, counted in favor of this nuclear power plant.

President Chen spoke at the Conference on Comparative Studies of Referendum that this requirement makes the referendum law a "'birdcage'" referendum process. He was elected with less votes than the peace referendum received. Yet the latter did not pass because of lack of turn out.

I like the statement by KMT caucus whip Lin Hung-chuh:

"'Now that we haven't been able to settle in the legislature the issue which has already confounded the country for more than 20 years, it's time for the public to make a decision'"

"Lin said the proposal was as neutral as it could be to make a referendum on the issue possible.

"'Whether you support the plant's continued construction or not, you should all vote in favor of the proposal'"

The Democratic Progressive Party (DPP) Legislator said the referendum process is "structurally flawed"

Also, the NIMBY issue is prevalent here. TSU Legislator Lin Shih-chia said the referendum should also be decided by those living within 50 kilometers of the nuclear power plant.

Taiwan passed its referendum law in 2003.

Croatia tourism development

Croatia's third referendum is a local one. Dubrovnik will vote on whether to allow a huge golf-focussed resort. Those in favor point to the additional jobs in the tourism industry. Those against it say that the development is inappropriate for the image of the town which has many historic streets and buildings. IN fact all of the areas previous referendum were on issues such as splitting from Yugoslavia or joining EU or NATO, what one would consider major sovereignty issues. This is the first 'everyday' referendum.

Iceland

I wrote about Iceland's referendum on whether to repay bail out of its banks.

Paul Krugman and Joseph Stiglitz liked the idea tht Iceland lets its banks fail and its currency dropped. But apparently many ordinary Icelanders are unhappy. They have seen some economic growth. The comparison is with Ireland which handled the bank bail out differently. It is not clear what approach was better.

Iceland also decided to write down any loan that is ten percent under water. Of course, people in such underwater homes don't want to pay their mortgages, as it will just get written down any way. The solution, of course, is to make mortgages a percentge of wages or income.

Miscellaneous KL

Medicare reimbursement rates.

The Central Management Services office of the Federal government is supposed to set national rates for procedures and tests. Unfortunately, they have declined to do this for medical diagnostics used to "effectively customize treaatment" (molecular tests). These tests look at specific regions of DNA or protein sequences, typically in cancer cells. In some cases they do it by looking at each discrete step, but without looking at the value of the test. However, since the Central management services has not done what it should do, the "contractors" that cover each region of the country have the option of how much to pay each provider of diagnostic services. Some of them have not set rates and are not paying at all.

Of course, the other approach is to allocate a certain amount of money to molecular diagnostics or diagnostics in general. Each company then does the best job it can providing useful tests. They are reimbursed based upon how well their tests actually lead to better case. As judged by panels of sortition juries aided by the appropriate biomedical experts.

REferences

1. http://www.forbes.com/sites/scottgottlieb/2013/03/27/medicare-has-stopped-paying-bills-for-medical-diagnostic-tests-patients-will-feel-the-effects/
2. Jill Dombraukas, Ph.D. "What is Molecular Diagnostics?" ehow.com facts 5615341
3. National Cancer Inststitute, Slide four, Molecular Diagnostics, http://www.cancer.gov/cancertopics/understandingcancer/moleculardiagnostics/page4

Medicare reimbursement

Medicare pays more for the same service when a doctor is an employee of the hospital than when they have their own practice. For example, it pays a hospital $400.00 for an echocardiogram as compared to $150.00 if the same thing is done by a private pysician. Predictably, physicians are selling their practices to hospitals and becoming employees.

"The High Price of Nickel-And-Diming Doctors, Bloomberg Business Week November 25 to December 2 2012, page 39 and 40.

Craft Brewers want a cut in excise taxA

They are lobbying to decrease the excise tax rate per gallon of bear and 116 members of a caucus introduced legislation to do just that. The badness tax I proposed in the first few weeks of this blog. would handle this problem and allow the taxpayers to give a discount to small brewers and other businesses that are truly investing in good things.

http://www.nytimes.com/2013/03/29/business/riding-wave-of-popularity-craft-brewers-ask-congress-for-a-tax-cut.html?pagewanted=all&_r=0

Referendum Voting Age

An Taiwan online survey showed that 90 percent favored lowering the referendum voting age from 20 to 18. Half of the respondents showed that the schools should discuss nuclear energy. However as the survey was conducted by the Taiwan Alliance for the Advancement of Youth Rights and Welfare--I wonder about the quality of the survey.

http://www.taipeitimes.com/News/taiwan/archives/2013/03/29/2003558278 Tapei Times, "Group Urges Lowering Referndum Voting Age" Hsieh Wen-hua and Jason Pan.

Participatory budgeting

Relates experiments with participatory budgeting in New York City to the United States.

"http://www.salon.com/2013/03/27/lets_decide_the_budget_ourselves_partner/Next New Deal" The Blog of the Roosevelt Institute.

The Cynic Kids

The new generation, those in College now, in response to the financial crisis and the problems after entering Iraq and Afghanistan:

"'don't like the system == however, they are wary of other alternatives as well as dismissive of their ability the desired modifications....Broadly speaking, Cynic Kids distrust the link between action and result.'

"the Occupy movement, 'launched more traffic jams than legislation'"

And the Arab Spring has not given the desired results.

Perhaps, noteworthy, that there is a desire for experimental and empirical evidence. We are unable to appraise multiple options, so we stick with the known evil. Perhaps, experiments with the online Constitution construction Kit and other techniques can give some empirical evidence that participatory democracy could work.

the New York Times

Paulson, an example of the Hedge function going crazy

John Paulson's Very Bad Year by Sheelah Kolhatkar,

John Paulson, no relation to Hank Paulson, former Secretary of the Treasury, earned four billion dollars as a hedge fund operator. Howe ha made his money:

1. merger arbitrage, after a merger is announced, short the acquirer, buy the target company's share and pocket the difference whent he merger goes through. However, there is a big risk of large losses if the merger falls apart (e. g. because of regulatory snafu).
2. But his real venture was, in 203 to 2007. Before the housing bust, shorting housing. He did this with the famous "credit default swaps" betting that the mortgage bunds would go bust.
3. Buying debt of financial companies in 2008, in other words betting on the bailout.
4. Goldman Sach marked a collaterized debt obligsgtion called Abacus. Mr. Paulson put these together as designed to decline and that he would make a profit if they did. Goldman Sach did not tell the purchasers of the bond fund that was what Paulson was doing.

But Paulson made some big plays in 2011 that screwed up:

1. A Chinese forest company product stock where the company was accused of fraud
2. buying bank stocks
3. buying high-yield and distreswed bonds
4. a gold mining stock called AngloGold Ashanti

Although Paulson's hedge fund lost 13.2 billion dollars, however, over its life time, gain was the third highest in history. And Mr. Paulson's net worth declined from sixteen billion to twelve billion.

To Be Blogged Later

Sebasian Mallaby More Money than God: Hedge Funds and the Making of a new Elite

Miscellaneous K

Hospitals and the $963 million question

One percent of Medicare funding (almost a billion dollars) will be based upon a quality index. These include benchmarks such as giving aspirin within twenty four hours to heart attack victims as well as patient satisfaction scores. As often is the case, there is question as to whether this is fair to hospitals treating sicker and poorer patients. (The alternatives are to develop statistical adjustments based upon patient population, or to simply allow a participatory sortition judgment to take this into account.)

An experiment where some hospitals were given bonusses showed no difference with hospitals that were not part of the bonus structure. If there is no change in performance, hospitals will get back of the most payment. There is thus too little downside to incentivize change. Bloomberg Business Week page 35 and 36, September 17 to Sept 23 2012.

White House Petition Site

A federal government web site allows one to post and sign petitions. Here are some of them:

subject	number of signatures
The US should go to the metric system	37089
disclose information that the government has been keeping secret about exraterrestrial visits	1947
FDA should not regulate electronic cigarettes	18503
Legalize online poker	9816
recount 2012 president election--alleges 'blatantly obvious' fraud	69610
recognize American sign languages	32,457

Although, obviously, some of these are ridiculous and the subject of derision by the media. Yet Obama responds to many of them including the petition to deport Piers Morgan, a "CNN talk-show host who supports gun control." Obama's team polled the people signing the Piers Morgan petition. Over half says the Obama answer was helpful and one in four say "they learned something new."

Obama organized a conference call between those who petitioned for immigration reform and the people establishing policy.

With 25000 signatures, the White House used to guarantee a response--now it is 100,000 for a guaranteed response..

Sign Here -- Please", page 34, by Michael Scherrer> Time Volume 181 Number Five, 2013

Porto Allegre - participatory democracy

Each neighborhood has a full town democracy, but they send delgates to a city wide assembly. However, there have benn dramatic improvements:

1. sewer access is now 95% , up from 46%
2. tax evasion fell--presumably because people felt the money was spent wisely.
3. The poorest 12 percent are a third of participants in the assembly
4. One in ten citizen have taken part in at least one of the assemblies.

http://www.guardian.co.uk/world/2012/sep/10/participatory-democracy-in-porto-alegre

Participatory budgeting in Venezuela and in United states Cities

Although this paper emphasizes the progress Venezuela has made in human development--and I suspect many people would disagree with this piece--but that is beyond the scope of this blog. It does talk about 20,000 "community councils" of 200 to 400 families. Some councils have joined to work on larger poblems. Also article talks about Port Allegre participatory democracy, which I do above, and references Mike Fox's democracy "Beyond Elections: Redefining Democracy in the Americas"

And one ward has particpatory democracy spend its alderman's capital budget of 1.3 million dollars with three other alderpersons following. Participatory democracies tend to have more smaller projects than the conventional budgets.

New York City now has eight council persons doing the same thing. Also, see an article in Epoch Times that said that 42 council members still are not using it. Participants identify and debate infrastructure projects at neighborhood assemblies. Then "budget delegates" do the mechanics to get precise costed out proposals. These are voted on by the community--to determine which get funded. People in the area, whether as an employee, resident or business owner can become budget delgates but only residents get to vote in the final decision. Note that this process only does a small sliver of the 9.5 billion that the city spends each year on capital improvents--and the city expense budget is not involved at all.

I had a thoughtful Thursday on Participatory budgeting in May 2010.

http://www.truth-out.org/news/item/14649-the-secret-rise-of-21st-century-democracy

Referendum on pay rates

Switzerland referendum just passed-- share holders have binding say on executive pay. Also bans "golden hellos" and "golden good bye" (golden parachutes). There is controversy whether this will discourage companies from coming to Switzerland, or even if it will attract new investment.

http://www.ft.com/cms/s/0/ca90f1b4-83ff-11e2-b700-00144feabdc0.html#axzz2MVXNQ1Zm
http://online.wsj.com/article/SB10001424127887324678604578338171658493636.html

California in 2010 allows parents to vote 51 percent to take over a school. Apparently, it can be done by petition. In Desert Trails School District, there has been concern that the petitioner organizers told parents that it was simply a "petition to get new computers and clean bathrooms" rather than starting a take over. They claim that the oppositon blocked parents from exiting if they did not sign the "counterpetition." Hollywood made a movie where the parents succeeded. The article questions whether parents have the ability to run a school, whether the process will be coopted by the wealthy, an issue with referenda (see Wikipedia article on Initatives and eEferendums in the United states).

"Parent Coup", by Caroline Winter, page 80 to 84. Bloomberg Business Week, September 17 to September 23 2012