In the American imagination, the Netherlands is famous for its “coffee shops” and laissez faire approach to marijuana. But one thing I found out when I visited Amsterdam a few years ago is that the trend in recent years has been toward stricter rules on coffee shops (for example, banning the sale of alcoholic beverages in establishments that also serve marijuana) and a reduction in their number.

And now it seems that the new right-wing coalition government taking office is certain to crack down even further:

Certainly the outlook for coffee shops is bleak. Among the few policies that the three parties in the new coalition government agree on is the need to reduce their numbers. The governing agreement released last week laid out plans that will force them to become members-only clubs and shut down those shops located near schools.

The coalition is also advancing the idea of prohibiting the sale of cannabis to non-Dutch residents, which amounts to a death knell for many coffee shops.

There are various ins and outs to this, but as I understand it there are two main problems with the status quo. One is that under the old tolerance regime there’s still no way for a coffee shop to legally obtain the supply of marijuana you need to operate on the scale of a business. Consequently, de facto legalization hasn’t actually eliminated the black market and associated criminality. Secondarily, the main market for the coffee shops turns out to be drug tourists from abroad. That reduces the Dutch political constituency for keeping them open. And the two factors interact together to create a situation where there’s a strong case to be made that legal coffee shops (by bringing drug tourists from the UK and the US into shops that need to tap an illegal wholesale market to gain their supplies) increase the scale of organized crime in the Netherlands.

I think that if you’re looking for stable alternatives to prohibition you either need to more to a more robust form legalization than the Dutch had—complete with totally legitimate marijuana farmers—or else adopt the Mark Kleiman “grow your own” proposal in which growing pot, smoking pot, possessing pot, etc are all legal but commerce in marijuana would be illegal.

The debate over the Affordable Care Act was largely a debate about improving America’s morally bankrupt and economically inefficient health insurance system. But there’s more to health care than insurance payment mechanisms. A recent Commonwealth Fund report compared health systems and concluded that the Netherlands has the best performing one, which certainly makes the fact that ACA establishes a Dutch-style insurance system for non-seniors look good. But as I observed in my original post on the matter, the quality of Dutch health care likely derives from how its providers work rather than from the structure of its insurance payments.

Eric Voeten backs this up with some anecdata:

Last summer, I had to bring my daughter to a Dutch doctor. Not only did I succeed in seeing someone that same morning but the cost were less than my regular co-payment in the USA, even though I have no insurance in the Netherlands and had never seen that doctor before.

The key is that the Dutch have an extensive system of family doctors, who generally operate a practice from their homes with minimal administrative assistance. These family doctors provide basic health care, do house visits, and are the gatekeepers for (more expensive) specialized care. This keeps a lot of people out of hospitals who do not need to go to hospitals. Of course, reforming insurance is relatively easy in comparison with making the type of structural reforms that would create a similar system in the US. Yet, these may well be the types of reforms that have a broader impact on quality of life.

And there’s the rub. It’s much more feasible to provide affordable insurance to everyone if the per unit costs of medical services are lower. In America, they’re very high. In part that’s because the American consumer disproportionately subsidized medical innovation from which the whole world benefits. And in part it’s because our system is simply inefficient.

For several years now the Commonwealth Fund has been doing invaluable comparative reports of different countries’ health care systems based on surveys with doctors and patients. Time and again these surveys show that there’s no perfect system out there, but that the American system delivers incredibly high costs in exchange for nothing in particular in terms of quality. The latest report adds the Dutch system into the mix and finds it’s basically the best. Here’s the summary:

Personally, I’m an admirer of the ultra-cheap UK system that I think appropriately de-prioritizes health care services relative to other public services and achieves decent quality and enormous efficiency while doing so. But everything about that system cuts against the American grain. The Australian system, at least as I understand it, is structurally much more similar to what we do in America and probably more in line with our cultural norms and manages to do a much better job than our system. The high-performing Dutch system is broadly similar to the Affordable Care Act in its structure, but it adds a government-run social insurance component for catastrophic costs.

The Netherlands overhauled its insurance system very recently, however, and I have to believe the quality of its providers has longer-standing roots than the 2006 reforms.

Something I used to hear when I was a kid is that there’s no need to create a Palestinian state because if Jordan was turned into a democracy, then in effect that would be a Palestinian state and then Palestinians living in the West Bank and Gaza could go move there. Voluntarily, I guess. Or else maybe they could be “encouraged” to go. That’s not really a position one wants to advance in the context of international diplomacy, but with anti-Muslim sentiment on the rise in Europe, far-right Israeli political positions are suddenly finding a respectful hearing. For example, Geert Wilders, leading of the Netherlands’ Party for Freedom, sees a “Greater Israel” agenda as part of an epochal conflict between the West and Islam:

“Jordan is Palestine,” said Wilders, who heads the third-largest party in Holland. “Changing its name to Palestine will end the conflict in the Middle East and provide the Palestinians with an alternate homeland.”

Wilders added that Israel deserved a special status in the Dutch government because it was fighting for Jerusalem in its name.

“If Jerusalem falls into the hands of the Muslims, Athens and Rome will be next. Thus, Jerusalem is the main front protecting the West. It is not a conflict over territory but rather an ideological battle, between the mentality of the liberated West and the ideology of Islamic barbarism,” he said.

“There has been an independent Palestinian state since 1946, and it is the kingdom of Jordan.” Wilders also called on the Dutch government to refer to Jordan as Palestine and move its embassy to Jerusalem.

In light of the recent election results, there’s actually a fairly plausible scenario in which Wilders could become the main junior partner in a right-wing coalition with the Liberals and the Christian Democrats. That could lead to him becoming Foreign Minister and finally Avigdor Lieberman would have a buddy. For now, though, the Christian Democrats seem to have nixed that idea and the Liberals are exploring the idea of forming a coalition with three left-of-center parties, the largest of which is actually led by a secular Jewish guy named “Job Cohen.”

In some informal discussions with people, I’ve heard folks assume that Geer Wilders’ rising popularity is due to the severity of the economic downturn in Europe. It’s worth noting that the economic situation in the Netherlands is actually quite mild (see lots of data here) in terms of the labor market:

And the relatively strong labor market has meant that the budgetary situation in the Netherlands hasn’t deteriorated to nearly the extent that you see in most developed countries. In part that reflects good Dutch fundamentals, but it’s also a lesson about the importance of forceful countercyclical policy. Your budget stays in much better shape if you do what it takes to keep people employed than if you go down a cycle of recession and slow growth.

There’s a sort of odd ratchet effect in the Anglophone media’s coverage of anti-immigrant politics in the Netherlands. When Pim Fortuyn’s political movement broke through in 2002 that was widely reported, but when it collapsed in 2003 nobody cared. Similarly, when Geert Wilders’ new anti-immigrant party surged to first place in the public opinion polls, that got reported. When it sank back to third or fourth place, nobody reported that. And now that the election’s been held and Wilders finished third you get headlines like “Surge for Dutch anti-Islam Freedom Party”.

But the bigger story is probably about the political party that actually took first place in the election, the VVD, a center-right liberal party (the Dutch also have a left-liberal party called D66). VVD has often participated in coalition governments, but the Netherlands hasn’t had a liberal prime minister since World War One and now they almost certainly will.

What comes next is the negotiations over forming a coalition for which I’ll defer to Erik Voeten:

To say that coalition formation is going to be rough would be an understatement. Most within the VVD either want a coalition with the CDA and PvdA or with CDA and PVV. A coalition with the PVV would be a minimal one, making it dependent on whatever motley crew of individuals Wilders has managed to put together (always a problem with parties that suddenly become very large). This will make the CDA pause as they just lost half their seats. They may well think that it is not so great to be a junior partner in a coalition government: Better to sit this one out and bounce back (which is what they did the only other time they lost this bad in 1994). The PvdA has rejected any possibility to govern with the PVV and prefers a “purple coalition” with the VVD, D’66 (a centrist liberal party with 10 seats), and the Greens (left, 10 seats). This is hardly ideal for the VVD. They would be outnumbered by parties of the economic left when they campaigned so hard on economic reforms from the right. The ball is in the VVD’s court. Given that the PVV won so substantially, it would be difficult for the VVD not to at least have talks with them. Of course this puts the CDA in an odd power broker situation given how badly they were beaten up. For what it’s worth, the election markets now put the chance of a purple coalition at 60% and have the CDA/VVD/PVV coalition at 10%.

I wonder if the rules allow for the possibility of a Danish-style center-right VVD/CDA minority government that would depend on occupying the central position in parliament and the impossibility of effective collaboration between PVV and the left-wing parties in order to stay in office. You’d try to get PVV votes for your economic reforms, and then just not give them cabinet seats or policy concessions on their nuttier agenda items like banning the Koran or taxing headscarves.

The Economist’s MS gapes in awe at the detailed policy programs put forth by Dutch political parties as they head into election mode:

When a Dutch political party says it wants lower deficits, it actually outlines an electoral programme with details about how it plans to cut spending and/or raise taxes. For example, the most economically laissez-faire Dutch party, the VVD or “Liberals”, wants to slash 34 billion euros out of the budget by 2015, and it lays out how it will do this: limiting unemployment insurance to 12 months, raising the retirement age to 67, freezing educational spending on special-needs children, and all kinds of unpopular stuff. The Labour Party wants to cut the budget by 15 billion euros, including raising the retirement age to 66 and cutting defence spending by 1.6 billion, and raise business and environmental taxes while cutting taxes in a progressive fashion on individuals, ultimately coming out with 500m euros more in revenues. The Christian Democrats want to cut spending by 21.4 billion euros and cut taxes by 2 billion euros. Most importantly, all these details I’m providing come from the Dutch Central Planning Bureau, which evaluates all the parties’ electoral programmes and assesses how much they would save compared to baseline assumptions. It would be like American parties and candidates submitting their full programmes to the CBO for an assessment before the elections, so you could decide who to vote for.

There’s a lot to admire about this. That said, it really wouldn’t make sense for American politicians to act in this way. Indeed, if anything we spend too much time debating policy specifics of this nature during our presidential campaigns. I wrote blog posts comparing the details of the Obama, Clinton, and Edwards “plans” on health care and climate change and it turns out this was all totally irrelevant. Presidents can’t compel congress to act, and generally don’t do the detail-work of policy-design. It would make much more sense for candidates to talk less about this sort of thing and instead address what presidents actually do—help set the legislative agenda, fill federal appointments, use discretionary regulatory authority, conduct foreign and national security policy, etc.

In a parliamentary system with strong party discipline, you can try to hold people to their policy commitments. In the US sense, any president or member of congress or senator, who adhered rigidly to the details of his or her policy platform would necessarily be totally ineffective.

If anything my real question is why do Dutch parties bother to do this given that the Netherlands’ political system makes coalition governments inevitable? If I were a Dutch voter, the questions I would want party leaders to answer would be about potential coalition partners, not the details of policy platforms. Maybe there’s a sense that having a detailed agenda written out in advance makes it easier to formulate a coalition agenda post-election because you can pick and choose between specific agenda items that have already been written down and evaluated.

(my photo, available under cc license)

I don’t often agree with Bryan Caplan, but this post on the Greek economy raises what I think is an underdiscussed issue that makes international comparisons difficult—when calculating a country’s GDP, the public sector counts inputs as outputs. There are sound accounting reasons for doing it this way, but it makes it difficult to do international comparisons of living standards when we talk about developed countries with relatively large public sectors.

To see the problem, consider that in a commonsense view a clean, quiet, pleasant, timely tram is more valuable than a dirty, loud oft-late, tram. But if the good tram is just better because that country’s transportation departments are better-run, then the higher tram quality doesn’t “show up” in the per capita GDP. Insofar as high-quality public services have beneficial spillover consequences for the rest of the economy, that does show up. But insofar as good services just make people’s lives better—think of Medicare treating someone in a timely and effective manner rather than let them linger ill for three months before they recover—that’s off the radar. Public spending as a percent of GDP is similar in Greece and the Netherlands but I’d wager a fair amount that the Dutch civil service is delivering more value-per-euro.

If you want to see good writing on how the Dutch health care system works and its potential applicability to the United States, you don’t need to read this blog. Check out Jon Chait. Or Ezra Klein. Or this from Ab Klink. Or this from Health Affairs.

I do, however, want to emphasize one point about this that I think sometimes gets lost in the shuffle. You tend to hear a lot of discussion of how the Dutch regulate, mandate, and subsidize health insurance policies for individuals. Among other things, that has the most direct relevance to what we’re talking about in the US. But health insurance plays only a limited—albeit extremely important—role in the Netherlands. They also have their Algemene Wet Bijzondere Ziektekosten, or “law on exceptional health care costs” which covers long-term care for the elderly, palliative care for the dying, and treatment of the permanently disabled. This operates as a straight-up social insurance system financed by taxes.

The other thing is that the current version of the Dutch system has only been in place since 2006. That’s actually not much time to evaluate how well something really works.