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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 9, Issue 36: September 4, 2007

  1. What if Insurers Licensed Cars and Drivers?
  2. Two Years after Katrina: How Policy Has Undermined Non-Governmental Recovery Efforts
  3. Peru’s Earthquake Shakes Faith in Government Relief
  4. Eland Restates the Case for “Gerrymandering” Iraq

1) What if Insurers Licensed Cars and Drivers?

On Saturday, the Wall Street Journal published Independent Institute Research Fellow John Semmens’s innovative proposal for improving road safety—by allowing auto insurance companies to license cars and drivers. This arrangement, which Semmens examines in greater detail in the Independent Institute book Street Smart, works in the maritime industry because insurers have strong direct incentives for monitoring safety and performance of the ships and pilots they license. In contrast, employees at state Departments of Motor Vehicles, Semmens says, “have no stake in what happens after those drivers [they’ve licensed] hit the road.”

“Because they would be insuring the drivers and cars they license, insurance companies would be vigorous in their testing and car-safety requirements, letting only qualified individuals venture out onto the roadways,” writes Semmens, who also works at a research project manager in the Arizona Department of Transportation.

“They would be more likely to ferret out those unqualified to drive, from those whose driving abilities have become compromised with age or habitual substance abuse to those who have been ticketed on more than one occasion for reckless or aggressive driving,” Semmens continues. “Insurers also would be more likely to develop methods to allow such drivers back on the road when specific criteria are met. For instance, insurers might re-license and insure reformed DWI abusers if they use only vehicles equipped with devices that disable the ignition when alcohol is detected in the driving cabin.”

“On the Road,” by John Semmens (The Wall Street Journal, 9/1/07)

Also see:

Street Smart: Competition, Entrepreneurship, and the Future of Roads, edited by Gabriel Roth

“Recovering from Smart Growth,” a conference organized by the American Dream Coalition, will examine additional innovative ideas on transportation improvement, urban planning, and related topics. Nov. 10-12, 2007; San Jose, Calif.

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2) Two Years after Katrina: How Policy Has Undermined Non-Governmental Recovery Efforts

Two years after Hurricane Katrina pummeled the Gulf Coast, recovery in many areas has stalled. Neighborhoods still lay in ruins. Thousands still populate “temporary” FEMA trailer parks. Residents and business owners wait for signs of whether and when their communities and customers are going to return, but the communities and customers can’t—or won’t—return until housing, businesses, and services are restored.

This Catch-22 is not an inherent by-product of the vast storm-related destruction, according to economist Emily Chamlee-Wright. In the latest issue of The Independent Review, the Beloit College professor and Mercatus Center scholar argues that the key reason for the slow pace of post-Katrina reconstruction—one which has received little systematic coverage—is that many disaster-response policies and redevelopment initiatives have distorted the signals from markets and civil society that would otherwise foster a swift and sustained recovery.

Based on extensive field research, including interviews with hundreds of residents, business owners, and government officials, Chamlee-Wright takes a tough look at policies that have created “signal noise” that discourages non-government efforts to rebuild. She also offers helpful principles that could—and, in some places, already have—spurred redevelopment. “Effective recovery, even in the wake of catastrophic disaster, depends primarily on the social and economic systems that coordinate people’s daily life,” writes Chamlee-Wright. “It is imperative that public policy play only a supportive role to these systems rather than create signal noise that inhibits their successful reestablishment.”

“The Long Road Back: Signal Noise in the Post-Katrina Context,” by Emily Chamlee-Wright (The Independent Review, Fall 2007)

Also see:

“The Use of Knowledge in Natural-Disaster Relief Management,” by Peter T. Leeson and Russell S. Sobel (The Independent Review, Spring 2007)

“Public and Private Responses to Katrina: What Can We Learn?” by Mary L. G. Theroux (10/20/05) Spanish Translation

Subscribe to The Independent Review.

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3) Peru’s Earthquake Shakes Faith in Government Relief

In some ways it is a replay of Katrina. Tragically, Peru’s earthquake two weeks ago reinforced the observation that governments aren’t terribly adept or reliable when it comes to emergency management or disaster relief. Many outsiders might be inclined to view Peru’s predicament as the result of a dearth of resources controlled by the government, but this view is mistaken. Lima’s coffers are flush with tax revenue from the country’s current export boom, and the number of government employees is relatively large for the region. Thus, the “poor government” excuse fails to explain much of anything, according to Peruvian-born Alvaro Vargas Llosa, director of the Independent Institute’s Center on Global Prosperity.

The blame cannot be laid on the nominal slowdown in the size of government, Vargas Llosa argues, especially because regional and local government in Peru has grown significantly since the 1990s. Also, the much-discussed reduction in the size of the national government—associated with selling state-owned enterprises—did not fundamentally reform Peru’s top-heavy government institutions.

“Under the current circumstances, with an export boom, a government receiving record revenue and a tragedy that has many people lamenting the lack of ‘enough government,’ there is no way Peru will opt for the painful sacrifices that a true reform would require so that the next earthquake doesn’t catch the authorities so unprepared,” Vargas Llosa concludes.

“Lessons from the Rubble,” by Alvaro Vargas Llosa (8/22/07) Spanish Translation

Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa

The Che Guevara Myth, by Alvaro Vargas Llosa

Center on Global Prosperity (Alvaro Vargas Llosa, Director)

Visit our Spanish-language website.

Visit our Spanish-language blog.

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4) Eland Restates the Case for “Gerrymandering” Iraq

In his latest op-ed, published last Tuesday in the Washington Times, Ivan Eland restates the case for partitioning Iraq into autonomous zones governed separately by the Shi’a, the Sunnis, and the Kurds.

Announcing a U.S. withdraw of troops would likely pressure Iraq’s hostile factions to seek a confederate arrangement (and would save more American lives than a modest reduction in troop levels, which would put U.S. forces at greater risk). “Such a ‘confederation’ would lessen fears that any one ethnic or religious group will gain control of the national government and oppress the others, as Saddam Hussein did,” Eland writes.

After presenting the merits of partitioning Iraq, Eland rebuts three criticisms often leveled at this proposal. First, “gerrymandering” could easily accommodate multi-ethnic cities such as Baghdad, Eland argues, just as it has created politically viable (if geographically unsightly) congressional districts throughout the United States. Second, Turkey would learn to live with a Kurdish zone in Iraq (indeed, it has done so for years) because doing so is more conducive to admission to European Union. Third, Iranian influence over a Shi’ite zone in Iraq would be limited because the Shi’ites would not rule over the entire country. “If Iraq is divided,” Eland writes, “Iranian influence would be limited to and even within the Shi’ite south.”

“Iraq’s Last Best Hope?” by Ivan Eland (The Washington Times, 8/28/07) Spanish Translation

The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland

“The Way Out of Iraq: Decentralizing the Iraqi Government,” by Ivan Eland

“Troop Withdrawal: Looking Beyond Iraq” – Panel discussion featuring Ivan Eland, Leon T. Hadar, and David R. Henderson (Washington, D.C., 9/21/07)

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