preference modification vs. incentive manipulation as tools of insurgent recruitment: the role of...

Preference modification vs. Preference modification vs. incentive manipulation as incentive manipulation as

tools of insurgent tools of insurgent recruitment:recruitment: the role of the role of

culturecultureMichael Munger, Departments of Michael Munger, Departments of

Political Science and EconomicsPolitical Science and Economics

Duke UniversityDuke University

Friday, Sept 30, 2005Friday, Sept 30, 2005

Problem of Acting as a “Society”Problem of Acting as a “Society”Can a group of people who disagree come to a Can a group of people who disagree come to a

consensus? consensus?

I want…you want…what do I want…you want…what do wewe want? want? COLLECTIVE CHOICE PROBLEMCOLLECTIVE CHOICE PROBLEM

Even if they do agree, how could they coordinate Even if they do agree, how could they coordinate their actions? their actions? INFORMATION / INFORMATION / TRANSACTIONS COST PROBLEMTRANSACTIONS COST PROBLEM

Even if they all know what to do, why would they Even if they all know what to do, why would they do it? do it? FREE RIDER / FREE RIDER / COLLECTIVE ACTION PROBLEM COLLECTIVE ACTION PROBLEM

Problem 1: Collective ChoiceProblem 1: Collective Choice

Everyone wants something differentEveryone wants something different

Even if they all want the same (more!), Even if they all want the same (more!), there is a problem of disagreement.there is a problem of disagreement.

On disagreement, Charles IV: On disagreement, Charles IV:

““My cousin Francis and I are in perfect My cousin Francis and I are in perfect accord—he wants Milan and so do I.”accord—he wants Milan and so do I.”

Problem 2: Information & CoordinationProblem 2: Information & Coordination““The peculiar character of the problem of a rational economic The peculiar character of the problem of a rational economic

order is determined precisely by the fact that the order is determined precisely by the fact that the knowledge of the circumstances of which we must make knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources—if merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of rather a problem of how to secure the best use of resources known to any of the members of society, for resources known to any of the members of society, for ends whose relative importance only these individuals ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.” knowledge which is not given to anyone in its totality.” (F.A. Hayek, 1945, (F.A. Hayek, 1945, AERAER).).

Problem 3--Commitment: Without Problem 3--Commitment: Without Enforcement, Can We Cooperate?Enforcement, Can We Cooperate?Common Knowledge Basis of Cooperation—When I Common Knowledge Basis of Cooperation—When I Know You Know That I Know that it is in your Know You Know That I Know that it is in your interest to cooperate…interest to cooperate…Can we account for irrational acts? Suicide Can we account for irrational acts? Suicide bombings, sacrifice of a life? Are the bombers bombings, sacrifice of a life? Are the bombers duped? confused? primitive?duped? confused? primitive?Hobbes: “Covenants, without the sword, are but Hobbes: “Covenants, without the sword, are but words.”words.”We tend to think the state is the only We tend to think the state is the only answer….but…..Can there be decentralized, answer….but…..Can there be decentralized, preference-based means of overcoming the free-preference-based means of overcoming the free-rider problem?rider problem?

My Definition of “Culture”My Definition of “Culture”

Culture:Culture: The set of “inherited” The set of “inherited” beliefs, attitudes, and moral beliefs, attitudes, and moral strictures that a people use to strictures that a people use to distinguish outsiders, to understand distinguish outsiders, to understand themselves and to communicate themselves and to communicate with each other.with each other.

Culture Is “Inherited”Culture Is “Inherited”

I have put quotations around the word inherited above, not I have put quotations around the word inherited above, not because I am quoting anyone, but because the sense of because I am quoting anyone, but because the sense of the word is strained. the word is strained.

Hair texture, eye color, general build…those sorts of things Hair texture, eye color, general build…those sorts of things are inherited. They are hard-wired into the genetic are inherited. They are hard-wired into the genetic structure of humans, and children are directly and structure of humans, and children are directly and entirely the product of their parents. entirely the product of their parents.

Culture is obviously not inherited like this. We teach it to Culture is obviously not inherited like this. We teach it to our children, or they learn it by tacit and perhaps our children, or they learn it by tacit and perhaps unconscious exposure over time. unconscious exposure over time.

But it makes sense to think of culture as an inheritance, or But it makes sense to think of culture as an inheritance, or legacy from the past.legacy from the past.

Culture solves the 3 problemsCulture solves the 3 problems

MetapreferencesMetapreferences

Information: “good” and “bad” action. Information: “good” and “bad” action. Garrison Keillor’s confirmationGarrison Keillor’s confirmation

Commitment devices: Kreps’ model of Commitment devices: Kreps’ model of “corporate culture” in situations of “corporate culture” in situations of pervasive hierarchy and irreducible pervasive hierarchy and irreducible uncertaintyuncertainty

An Illustration of “Culture” An Illustration of “Culture”

““shibboleth”--The word is often combined shibboleth”--The word is often combined with the word “cultural.”with the word “cultural.”

Its general meaning is meanIts general meaning is mean an unspoken an unspoken but shared understanding of something but shared understanding of something that identifies insiders, and distinguishes that identifies insiders, and distinguishes outsiders because they do not share this outsiders because they do not share this understanding.understanding.

ShibbolethShibbolethJudges 12, 5-7, Judges 12, 5-7, King James 21st Ed. BibleKing James 21st Ed. Bible

5 And the Gileadites seized the passages of the 5 And the Gileadites seized the passages of the Jordan before the Ephraimites; and it was so, that Jordan before the Ephraimites; and it was so, that when those Ephraimites who had escaped said, "Let when those Ephraimites who had escaped said, "Let me go over," that the men of Gilead said unto him, me go over," that the men of Gilead said unto him, "Art thou an Ephraimite?" If he said, "Nay,""Art thou an Ephraimite?" If he said, "Nay,"

6 then said they unto him, "Say now Shibboleth." 6 then said they unto him, "Say now Shibboleth." And he said "Sibboleth," for he could not frame to And he said "Sibboleth," for he could not frame to pronounce it right. Then they took him and slew him pronounce it right. Then they took him and slew him at the passages of the Jordan; and there fell at that at the passages of the Jordan; and there fell at that time of the Ephraimites forty and two thousand.time of the Ephraimites forty and two thousand.

ShibbolethShibboleth

Imagine Ephraimite twins, separated at birth.Imagine Ephraimite twins, separated at birth.

Suppose the Gileadites capture one twin at Suppose the Gileadites capture one twin at age one week, raise as a Gileadite. Would age one week, raise as a Gileadite. Would likely adopt Gileadite beliefs. More likely adopt Gileadite beliefs. More importantly, would be able to pronounce the importantly, would be able to pronounce the “sh” sound, while the other twin who remained “sh” sound, while the other twin who remained behind with the Ephraimites could not.behind with the Ephraimites could not.

Culture is (imperfectly) inherited from Culture is (imperfectly) inherited from the people who raise you.the people who raise you.

The Questions that interest me…The Questions that interest me…Are preferences tastes, truly primitive (chocolate v. Are preferences tastes, truly primitive (chocolate v. vanilla), or are they culturally conditioned or even vanilla), or are they culturally conditioned or even instrumenal?instrumenal?

Are moral beliefs important? Are such beliefs best Are moral beliefs important? Are such beliefs best treated as preferences or constraints?treated as preferences or constraints?

Core values: relatively fixed, strongly held, Core values: relatively fixed, strongly held, primitives in terms of “preference.” Policy beliefs primitives in terms of “preference.” Policy beliefs not held instrumentally, but as ends in themselves. not held instrumentally, but as ends in themselves. Not irrational to sacrifice for beliefsNot irrational to sacrifice for beliefs

Nietzsche, Nietzsche, Genealogy of MoralsGenealogy of Morals, or , or Gauthier, Gauthier, Morals by AgreementMorals by Agreement?

The Questions that interest me…The Questions that interest me…Are ideologies, or shared belief systems Are ideologies, or shared belief systems about right and wrong, the key to about right and wrong, the key to understanding moral beliefs? In the U.S., lots understanding moral beliefs? In the U.S., lots of research to say no. But Islam, or Maoism, of research to say no. But Islam, or Maoism, may have implications for guerrilla may have implications for guerrilla movements… movements…

Are ideologies a kind of spontaneous order, Are ideologies a kind of spontaneous order, not explicitly designed but regular and not explicitly designed but regular and consistent across people and across time? consistent across people and across time? Ideas--like viruses? Reproduce, gain Ideas--like viruses? Reproduce, gain resources, but kill their host….resources, but kill their host….

Emergence of “Culture”: Emergence of “Culture”: David Hume has Lunch at Café Hayek David Hume has Lunch at Café Hayek

(where orders (where orders emergeemerge))Three claims about culture:Three claims about culture:1.1. ““Order” requires only regularity and consistency. Order” requires only regularity and consistency.

Human beings choose actions based on moral Human beings choose actions based on moral conceptions, but also incentives and calculated gains conceptions, but also incentives and calculated gains that accrue to one action rather than another. that accrue to one action rather than another.

2.2. Purposive Action: I am going to adopt the convention Purposive Action: I am going to adopt the convention that humans act purposively. (Didn’t say “rationally”) that humans act purposively. (Didn’t say “rationally”)

3.3. People choose actions that they People choose actions that they believebelieve (rightly or (rightly or wrongly) will lead to a goal that they wrongly) will lead to a goal that they consider consider (rightly or (rightly or wrongly) desirable. These conceptions of right and wrongly) desirable. These conceptions of right and wrong may be Humean conventions, not transcendent wrong may be Humean conventions, not transcendent principles.principles.

Emergence of “Culture”: Emergence of “Culture”: David Hume has Lunch at Café Hayek David Hume has Lunch at Café Hayek

(where orders (where orders emergeemerge))

1.1. Surprising thing is that order can Surprising thing is that order can emerge, even from disparate and emerge, even from disparate and uncoordinated application of social uncoordinated application of social convention.convention.

2.2. Survival value of practices, or fashion, Survival value of practices, or fashion, may be conscious reason for adoption. may be conscious reason for adoption. But it is a predictable, and measurable, But it is a predictable, and measurable, consequence.consequence.

Origins: Two ConceptsOrigins: Two Concepts

Spontaneous OrderSpontaneous Order

““Intelligent” DesignIntelligent” Design

Evolutionary natural selection: fitness rests on ability Evolutionary natural selection: fitness rests on ability to obtain food and to reproduce successfully (i.e., to obtain food and to reproduce successfully (i.e., ensure offspring survive to sexual maturity)ensure offspring survive to sexual maturity)

Cultural selection: Tastes operate to advantage Cultural selection: Tastes operate to advantage some organisms / styles. Not the product of some organisms / styles. Not the product of evolution, but “intelligent” design.evolution, but “intelligent” design.

Order vs. Design: Order vs. Design: Which is Culture?Which is Culture?

Coyote—Evolution Coyote—Evolution Dachshund / Chihuahua—Cultural SelectionDachshund / Chihuahua—Cultural Selection

Dandelion—EvolutionDandelion—EvolutionRose—Cultural Selection Rose—Cultural Selection

Male Peacocks—Evolution (Sexual Selection)Male Peacocks—Evolution (Sexual Selection)Paris Hilton—Hard to say…Paris Hilton—Hard to say…Fabio—Impossible to say…Fabio—Impossible to say…

Choices Emerge….Choices Emerge….Do Preferences?Do Preferences?

Is there some evolutionary process that governs Is there some evolutionary process that governs preferences? preferences?

Are human political beliefs “getting better” over Are human political beliefs “getting better” over time? time?

The key difference is the absence of any The key difference is the absence of any feedback mechanism by which the merits of the feedback mechanism by which the merits of the emergent order might be judged, or subjected to emergent order might be judged, or subjected to modification. modification.

Douglass North makes this point quite forcefully:Douglass North makes this point quite forcefully: Necessary conditions for what economists think of as Necessary conditions for what economists think of as efficiency almost never exist in political realm…efficiency almost never exist in political realm…

……Efficient markets are created in the real world when Efficient markets are created in the real world when competition is strong enough via arbitrage and efficient competition is strong enough via arbitrage and efficient information feedback to approximate the Coase zero information feedback to approximate the Coase zero transaction cost conditions and the parties can realize the transaction cost conditions and the parties can realize the gains from trade inherent in the neo-classical argument.gains from trade inherent in the neo-classical argument.

But the informational and institutional requirements But the informational and institutional requirements necessary to achieve such efficient markets are stringent. necessary to achieve such efficient markets are stringent. Players must not only have objectives but know the correct Players must not only have objectives but know the correct way to achieve them. But how do the players know the correct way to achieve them. But how do the players know the correct way to achieve their objectives? The instrumental rationality way to achieve their objectives? The instrumental rationality answer is that even though the actors may initially have answer is that even though the actors may initially have diverse and erroneous models, the informational feedback diverse and erroneous models, the informational feedback process and arbitraging actors will correct initially incorrect process and arbitraging actors will correct initially incorrect models, punish deviant behavior and lead surviving players to models, punish deviant behavior and lead surviving players to correct models. correct models. (North, 1993).(North, 1993).

Will Culture of Interpersonal Will Culture of Interpersonal Relations Inevitably Disappear in Relations Inevitably Disappear in

the Commercialized West?the Commercialized West?

Ronald Heiner (1983) argues that as human Ronald Heiner (1983) argues that as human interaction becomes more complex and uncertain, interaction becomes more complex and uncertain, successful social institutions must reduce the successful social institutions must reduce the information needed to achieve cooperation among information needed to achieve cooperation among individuals. individuals. A person’s “overall behavior may actually be improved A person’s “overall behavior may actually be improved by restricting flexibility to use information or to chose by restricting flexibility to use information or to chose particular actions” (p. 564).particular actions” (p. 564).Mom and Pop hardware store vs. WalmartMom and Pop hardware store vs. WalmartFarmers’ Market vs. Piggly WigglyFarmers’ Market vs. Piggly Wiggly

The End of HistoryThe End of HistoryWhat is the cheapest way of achieving cooperation? What is the cheapest way of achieving cooperation?

Formal rules and external enforcement, or culture Formal rules and external enforcement, or culture and shame/guilt “enforcement”? and shame/guilt “enforcement”?

Heiner (1983):Heiner (1983):““In general, further evolution toward social In general, further evolution toward social

interdependence will require institutions that permit interdependence will require institutions that permit agents to know about successively smaller fractions agents to know about successively smaller fractions of the larger social environment. of the larger social environment. That is, institutions That is, institutions must evolve which enable each agent in the society must evolve which enable each agent in the society to know less and less about the behavior of other to know less and less about the behavior of other agents and about the complex interdependencies agents and about the complex interdependencies generated by their interactiongenerated by their interaction”” (580; emphasis in (580; emphasis in original).original).

The End of HistoryThe End of HistoryIn In WalMart worldWalMart world, ideologies would , ideologies would disappeardisappear. .

Western, market-based societies with weak Western, market-based societies with weak parties and decentralized democratic parties and decentralized democratic institutions—the end of history?institutions—the end of history?

And is “terrorism” a reaction to this threat, as And is “terrorism” a reaction to this threat, as

much as to religion or politics? much as to religion or politics? People understand immediately (though not People understand immediately (though not

instinctively, but at a deep level) that this instinctively, but at a deep level) that this change is a threat to their understandings of change is a threat to their understandings of means/end relations, and to moral statusmeans/end relations, and to moral status

““Spontaneous” labor movements, “sabot”ageSpontaneous” labor movements, “sabot”age

Origins of cultureOrigins of culture

The literature contains two strikingly different The literature contains two strikingly different accounts of the origins of culture as a accounts of the origins of culture as a commitment device and organizer of commitment device and organizer of preferences, based on two preferences, based on two very differentvery different conceptions of its function. conceptions of its function.

One account is based on transactions cost and One account is based on transactions cost and commitment, while the other rests on the commitment, while the other rests on the problem of excludability and “club” goods. problem of excludability and “club” goods.

The two accounts are The two accounts are not mutually exclusivenot mutually exclusive, but , but they do have strikingly different implications for they do have strikingly different implications for our understanding of culture.our understanding of culture.

I. Commitment Device: I. Commitment Device: Real Real PietyPiety

Kreps (1990)Kreps (1990)

HierarchyHierarchy

UncertaintyUncertainty

Requires an organizing principle as a Requires an organizing principle as a commitment device.commitment device.

The Trust GameThe Trust Game

A +$20 B +$20

Honor Trust

Do Not Trust B

B

Trust B

Do Not Honor Trust A

Total:+$40

A $10 B +$30

Total:+$20

A +$0 B +$0

Total:+$0

Hierarchy and Strategic UncertaintyHierarchy and Strategic UncertaintyIt is B’s behavior that is in question; somehow B must persuade A

that there is at least a high probability that B will honor A’s trust if A offers it. And there are real gains to be made here, so there are significant pressures at work to overcome this commitment problem. There are two apparently different but mathematically indistinguishable ways of solving the problem:

(1) B could post a bond, or submit to some kind of binding third party enforcement that would punish him if he violates trust, or

(2) B could persuade A that cares so much for A, or that B cares so much for his own honor, that he will not violate the trust, because it would not be in his interest to do so, given B’s self interest properly understood.

Similar in terms of analytics, but a world of difference in terms of practical implications, and beliefs.

Hierarchy and Strategic UncertaintyHierarchy and Strategic UncertaintyOutside enforcement: Hobbes’ “covenants, without the sword, are

but words…”Beliefs: Rousseau: “inscribe the law on the hearts of men…”

It is common to dismiss this difference, but in fact the distinction may be the very heart of the matter for the society. Dead weight loss to society has two parts: (1) The size of the “transactions cost sector” of the society, and (2) Other exchanges precluded by an inability to reduce transactions costs to the point where those otherwise profitable transactions can take placeThis loss is a direct function of the society’s set of moral beliefs that condition interactions. It will surprise no one at this point that I want to call this whole set of moral beliefs and conditioning factors for economic and social exchange by the vague name I mentioned earlier: culture….

II. Club Goods: Good WorksII. Club Goods: Good Works

A standard set-up for the club goods approach is Berman’s A standard set-up for the club goods approach is Berman’s (2003):(2003):

Imagine a community for which neither government nor Imagine a community for which neither government nor markets function well. Local public goods usually markets function well. Local public goods usually provided by government such as public safety, law and provided by government such as public safety, law and order and welfare services are poorly provided or order and welfare services are poorly provided or absent, while neither public nor private sectors efficiently absent, while neither public nor private sectors efficiently deliver education, health services, or insurance. It would deliver education, health services, or insurance. It would not be surprising for individuals in such a place to band not be surprising for individuals in such a place to band together into communities which provide public safety, together into communities which provide public safety, education, welfare services, and other local public goods education, welfare services, and other local public goods through mutual insurance. (Berman, 2003, p. 2)through mutual insurance. (Berman, 2003, p. 2)

Game 1: Prisoner’s DilemmaGame 1: Prisoner’s Dilemma

Cooperate Defect

Cooperate (2,2) (4,1)

Defect (1,4) (3,3)

ORDINAL PREFERENCES: 1 is good, 4 is bad

Game 1Game 1: Prisoner’s Dilemma with : Prisoner’s Dilemma with External Enforcement: External Enforcement:

Defectors are Tortured & their Families KilledDefectors are Tortured & their Families Killed

Cooperate Defect


Defect (4,2) (3,3)


Game 1Game 1 : Prisoner’s Dilemma : Prisoner’s Dilemma with External Enforcement: with External Enforcement: Defectors Feel Really BadDefectors Feel Really Bad

Cooperate Defect


Defect (4,2) (3,3)


Game 2: Culture WarGame 2: Culture War

Cooperate Defect


Defect (1,4) (2,2)


Game 3: U.S. in Iraq—1992Game 3: U.S. in Iraq—1992No Equilibrium….No Equilibrium….Anti-SaddamAnti-Saddam

InsurgencyInsurgencyU.S. U.S.

Cooperate Defect


Defect (1,4) (4,2)


Game 3: U.S. in Iraq—2005Game 3: U.S. in Iraq—2005Side Payments….”Be Rational”Side Payments….”Be Rational”

Anti-U.S. (Sunni)Anti-U.S. (Sunni)

InsurgencyInsurgencyU.S. U.S.

Cooperate Defect


Defect (4,4) (3,2)


If Club Goods….If Club Goods….

If participation in terrorist organizations is primarily an in-If participation in terrorist organizations is primarily an in-kind payment for access to club goods, then policies that kind payment for access to club goods, then policies that reduce the marginal value of such club goods will be reduce the marginal value of such club goods will be most effective. most effective.

A concerted effort to break up social networks, in cases A concerted effort to break up social networks, in cases where groups with terrorist ties (such as Hamas, or IRA) where groups with terrorist ties (such as Hamas, or IRA) also provide local public goods such as schools, police also provide local public goods such as schools, police services, etc., and replace those organizations with services, etc., and replace those organizations with publicly provided services, would have an immediate publicly provided services, would have an immediate impact out of all proportion to the cost. impact out of all proportion to the cost.

Though the dividing line between “police services” and Though the dividing line between “police services” and “protection racket” may be blurred, it is clearly true that “protection racket” may be blurred, it is clearly true that the IRA (in Northern Ireland) and Hamas (in the the IRA (in Northern Ireland) and Hamas (in the Palestinian territories or in other parts of the Middle East) Palestinian territories or in other parts of the Middle East) provided services valued by many local citizens.provided services valued by many local citizens.

If Club Goods….If Club Goods….

Furthermore, if the problem is an incentives-based Furthermore, if the problem is an incentives-based choice, it becomes clearer why medieval choice, it becomes clearer why medieval punishments have often been employed by punishments have often been employed by occupiers fighting resistance groups using terror occupiers fighting resistance groups using terror tactics. tactics.

The rack, ten-for-one, drawing-and-quartering, or The rack, ten-for-one, drawing-and-quartering, or other public displays of savage retribution other public displays of savage retribution reduce the value of access to local public goods reduce the value of access to local public goods as a matter of simple cost-and-benefit as a matter of simple cost-and-benefit calculations. calculations.

While this observation does not justify the use of While this observation does not justify the use of such tactics, it does explain why they have been such tactics, it does explain why they have been so commonly observed throughout history.so commonly observed throughout history.

If Preferences….If Preferences….If, on the other hand, a preference for cooperation can be If, on the other hand, a preference for cooperation can be

inculcated or selectively recruited, then such tactics are inculcated or selectively recruited, then such tactics are likely to backfire. likely to backfire.

If the primary good is psychological solidarity with an If the primary good is psychological solidarity with an identifiable group, then public abuse or torture may only identifiable group, then public abuse or torture may only harden the resolve of those committed to cooperation with harden the resolve of those committed to cooperation with terror groups. terror groups.

To the extent that abuse of some populations solidify in-group To the extent that abuse of some populations solidify in-group vs. out-group psychological identifications, attempts to use vs. out-group psychological identifications, attempts to use incentives can precipitate the “culture war” setting described incentives can precipitate the “culture war” setting described earlier in this paper. earlier in this paper.

In that setting, publicly uncooperative behavior becomes In that setting, publicly uncooperative behavior becomes valued as an end in itself, and even apparently Pareto-valued as an end in itself, and even apparently Pareto-superior compromises on territory may be ruled out. If the superior compromises on territory may be ruled out. If the preferences are primitives, not possible to compensate or preferences are primitives, not possible to compensate or buy out terrorists with alternative incentives.buy out terrorists with alternative incentives.

A movie: Positive Feedback….A movie: Positive Feedback….

preference modification vs. incentive manipulation as tools of insurgent recruitment: the role of...

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