Category: Public choice theory

Zeno’s Public-Consultation Paradox: Part 2, No matter how much time you allow

19 March, 2014 (09:00) | Brazil, Bureaucracy, Government, Infrastructure, Olympics, Public choice theory, Relocation, Rio de Janeiro, Theory, Urban development |

[Continued from yesterday’s Part 1.]   By:David A. Smith   Yesterday’s post meta-illustrated Zeno’s Public Consultation Paradox – you might have thought I could cover the topic in one day’s posting, but I ran over to two, even though I was working with a short story on National Public Radio’s Morning Edition (February 27, 2014).: […]

Zeno’s Public-Consultation Paradox: Part 1, Longer than the time available

18 March, 2014 (13:24) | Brazil, Bureaucracy, Government, Infrastructure, Olympics, Public choice theory, Relocation, Rio de Janeiro, Theory, Urban renewal |

By:David A. Smith   Zeno’s Public Consultation Paradox   All public-consultation processes take longer than the time available, even when you take into consideration Zeno’s Public Consultation Paradox.   Surely Achilles can catch the tortoise Just as surely, Rio can relocate slum dwellers without resorting to forcible eviction   Sometimes no evil intent is required […]

Whose risk is it, anyway? Part 4, If the funding ratio falls below 80%

16 January, 2014 (09:00) | Actuaries, Bankruptcy, Bonds, Detroit, Investment, Kevyn Orr, Municipal bankruptcy, Municipal bonds, Pension funds, Public choice theory, Risk, Speculation, US News |

By:David A. Smith   [Continued from yesterday’s Part 3 and the preceding Part 1  and Part 2.]   In the three days up to this point, we’ve discovered that the City of Detroit, not its employee-retiree pension funds, owns the risk of fund underperformance, meaning we have a classic case of moral hazard combined with principal-agent risk.  […]

Whose risk is it, anyway? Part 3, Unrealistically high projected rates of return

15 January, 2014 (09:00) | Actuaries, Bankruptcy, Bonds, Detroit, Investment, Kevyn Orr, Municipal bankruptcy, Municipal bonds, Public choice theory, Risk, Speculation, US News |

By:David A. Smith   [Continued from yesterday’s Part 2 and the preceding Part 1.]   In yesterday’s post on the net unfunded liabilities of Detroit’s two principal public-employee unions (the non-uniformed GRS and the uniformed FRP), we had reached the point of knowing that Detroit was on the hook for any shortfalls, even as the pension funds […]

Whose risk is it, anyway? Part 2, Negative twelve percent return

14 January, 2014 (09:00) | Actuaries, Bankruptcy, Bonds, Detroit, Investment, Kevyn Orr, Municipal bankruptcy, Municipal bonds, Pension funds, Public choice theory, Risk, Speculation, US News |

By:David A. Smith   [Continued from yesterday’s Part 1.]   Yesterday’s post, the first of four parts in this multi-parter, finally started our blog process of explaining the arcana of pension fund investment management and its implications for failing cities and municipal bankruptcies.   Principal sources used in this post Pension and Investments (April 15, […]