6.20.2010

Iceland, Freedom of Expression, and Institutional Competition


Iceland's Althing* just passed a resolution that was being heavily pushed by Julian Assange, the founder of Wikileaks (and recently profile-ee of the New Yorker, here) that seeks to make Iceland's protection of freedom of expression, especially over the internet, the strongest in the world.

Now, there are multiple ways of thinking about why this was done (that it's an attempt to bring international accolades to a country that's been rather macroeconomically embarrassed of late doesn't seem out of the realm of possibility...) but what I find most interesting about is that it's yet another example of traditionally noneconomic things getting some very economic treatment. The language that's been used to cover the bill thus far has been quite evocative of another form of "institutional competition," namely tax havens. It's fairly conceptually similar to the way that places like the Caymans Islands have decided to give themselves comparative advantage among investors by setting low tax laws and regulations that encourage the creation and hassle-free maintenance of off shore investment vehicles.

Yes, there's a fundamental information asymmetry difference here in that freedom of expression is, by definition, observable, so unless they do it anonymously dissidents from other countries will only be protected from Iceland's laws, which is probably not what they're worrying about in the first place. That does make it a lot less attractive than the knowledge that I could dump some ill-gotten gains in a numbered account in Lichtenstein and never have it get found, taxed, or linked to my ill-getting, but nonetheless. The decision to institutionally compete is there, and I'm curious to see how it'll pan out and whether it'll have any material effect.

Now all we need is a greater degree of institutional differentiation and a reduction in migration barriers and we can get some megascale Tiebout sorting. Lower taxes for Russian-style restrictions on free speech, anyone?

* I feel like somewhere there's an undergrad viking mythology professor who's very happy I'm linking to the webpage of the oldest parliamentary institution in the world. And no, I can't read Icelandic. But Google Chrome does have Google Translate built in...

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