Remembering Tarquinius Priscus

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August 22, 2003 by AK

Paul Jané cites a Reuters report showing that Brazil is about to become the first nation in Latin America to send not just its astronauts and sputniks to space, but propel them by their own, Brazilian-made rockets. No wonder Paul could not resist adding:

[Cultural Insensitivity Moment] They might even find the time to provide a large chunk of their citizens with indoor plumbing after this. [/Cultural Insensitivity Moment]

The same perfectly applies to the former Soviet Union, but it was a “command economy”, Moscow allocating resources among sectors and regions. Although space exploration in countries with market economies is also funded chiefly with taxpayers’ money, using tax funds to install plumbing in slums would be frowned at as a form of wealth transfer. The libertarian take, I suppose, would be that the state should not spend on more than the bare essentials; therefore, no public funding for extras, be they space flights or toilets. From a developmental perspective, near-universal access to basic amenities is conducive to both economic growth in general and the rise of a middle class. Moreover, income or wealth transfers (not handouts but benefits like education or health subsidies) might help growth in societies with huge income/wealth disparities inherited from the more illiberal times. But if the poor vote to tax the rich, why do they allow the proceeds to go to space projects that only serve to inflate national pride, instead of channeling them into projects benefiting the poorest?

Of course, indoor plumbing is not just about installing toilets; in densely populated areas, it requires building or extending a sewerage and possibly water supply system. This is where coordination becomes an issue. Moreover, much of development economics revolves around coordination failure. An example from real life, if you believe mine is real: This summer, we are renting a house in a suburban area outside of Moscow. I would estimate around 75% of residents are very well off to rich, judging by the impressive new houses they have erected on their land. However, there is no central sewerage system; homeowners use their own sewage tanks. Most land lots are too small to justify this arrangement, whether one considers the economics or sanitary concerns. There is no doubt the affluent residents could afford to install centralized sewerage provided they pooled their funds. Rumor has it that a certain homeowner paid $12,000 to import and install a proper, state-of-the-art septic tank with clean water flowing out.

So why hasn’t anyone knocked on their doors and said, “I can build a sewerage system for you guys if each of you pays his fair share?” I have a few reasons in mind but I haven’t researched it. Note that economists have encountered this problem many times before and no wonder the statists have suggested that the government step in and provide the service (paid for by the users, in full or in part), acting as a much-needed coordinator. I don’t think it’s the only solution, though. It’s an obvious but also a suspicious one.


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