PC Gone Mad: Women Drivers' Car Insurance in EU

Contrary to hoary stereotypes about "women drivers," the truth is that they are safer drivers--at least in the EU. So much so that women have been charged commensurately lower premiums in EU nations for years. However, in a dubious case of political correctness, the EU has issued a directive against discriminating against charging premiums differentially based on gender. End result? From December 21, 2012 onwards, profit-minded insurance companies have by and large chosen not to bring down male insurance premiums to those for females, but to bring up female premiums up to those for males. The UK Mirror writes:

Next month Brussels delivers an unwanted early Christmas present to women drivers – a nasty hike in car insurance premiums. Under a new European law known as the EU Gender ­Directive, insurers will no ­longer be able to calculate how much a driver pays for their insurance based on their sex. It means that from December 21 women, who are statistically much safer drivers and therefore enjoy lower premiums than men, will see insurance rates rise.

And the amount could be by as much as £300, according to comparison website Gocompare.com. For younger women drivers who have just passed their test, the hike could be in the ­thousands. As a result, many women may end up being forced off the road. According to research by uSwitch.com, 13 per cent of 1,219 women questioned said they would no ­longer be able to afford insurance if their ­premiums rose, while one in 10 said they would be forced to sell their cars.

You call this progress? While I am certainly no Eurosceptic, sometimes the EU is simply misguided in attempting to be politically correct. If women are less prone to fender benders, there is no reason to charge them premiums equivalent to their more reckless male peers.

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Catholic Melinda Gates vs Church on Contraception

For reasons you are doubtlessly aware of, the emphasis on population control of most in the development mainstream has long attracted criticism from the Roman Catholic Church. What we have here is a new twist on an old story: as cash-strapped Western nations have become warier about providing development aid, other actors have stepped up--especially wealthy private interests alike the Bill and Melinda Gates Foundation. In theory, these foundations combine the best of both worlds by avoiding electoral politics--witness tied aid--and applying a business-like sophistication to social problems.

But some things never change. It was perhaps inevitable that the Gates Foundation would bump up against the Church when it came to matters dealing with contraception. While there has been a change of emphasis on the rationale for it--instead of allaying fears of large Malthusian population increases in the postwar period, it is now on female empowerment concerning reproductive health decisions--the controversy remains.

An interesting twist on this story is that the main proponent of contraception is Catholic. Melinda Gates' religion invites media scrutiny as well as, I am sure, no small amount of introspection on her part about practicing her faith. As with many controversial issues, her plan to fund contraception research and dissemination adopts the "technocratic pose" which goes something like this--we are applying scientific method here, hence we should leave the politics out of this. Here is a key excerpt from the Newsweek article:

Perhaps more importantly, there’s her Catholic faith, which has always informed her work. “From the very beginning, we said that as a foundation we will not support abortion, because we don’t believe in funding it,” she says. She’s long disagreed with the church’s position on contraception, and the Gates Foundation did some family-planning funding early in its history. Still, she went through a lot of soul-searching before she was ready to champion the issue publicly. “I had to wrestle with which pieces of religion do I use and believe in my life, what would I counsel my daughters to do,” she says. Defying church teachings was difficult, she adds, but also came to seem morally necessary. Otherwise, she says, “we’re not serving the other piece of the Catholic mission, which is social justice.”

Gates believes that by focusing on the lives of women and children, and by making it clear that the agenda is neither coercive population control nor abortion, the controversy over international family-planning programs can be defused. Right now, she points out, 100,000 women annually die in childbirth after unintended pregnancies. Six hundred thousand babies born to women who didn’t want to be pregnant die in the first month of life. “She is somebody who really sees this as a public-health necessity,” says Melanne Verveer, the United States ambassador at large for global women’s issues. “I think she believes, and I hope she is right, that people of different political persuasions can come together on this issue.”

Do a quick search on this article and you can see very strong denunciations from church and family groups [e.g. 1, 2]. (If you think I'm snarky, wait till you read these folks' scribblings.) As a Catholic myself, I would like to expand on points for consideration that the Newsweek article does bring up:

(1) For better or worse depending on your point of view, you have to differentiate between the Roman Catholic Church and Catholics at large regarding contraceptive practices. The former sticks to the doctrine that contraception is unacceptable, but the latter have been more open to if not exactly being forthcoming about the use of contraceptive devices. In Catholic teaching, you often come across idealized analogies of the family as reflections of Christ's own. In the real world, Catholics too must deal with single parenthood, forced marriages, abusive spouses and so forth that are not necessarily conducive to such ideals.

Economists speak of first-best conditions where development theories are more likely to deliver. Similarly, Church teaching is often similar to first-best in the social realm, whereas the likes of the Gates Foundation have to deal with more practical, less ideal, situations. Call it the theory of second best applied to social matters. Out there, Catholics are undoubtedly among those who've decided to not follow Church teaching on contraception. While the Church derides this sort of "cafeteria Catholicism"--so we'll avoid abortions but we're OK with contraception--it wouldn't have coined a term for it if it didn't exist.

(2) This matter is unavoidably "political"--especially for Catholics. While there may be a silent majority that tacitly approves of contraception by using it despite not loudly trumpeting the fact, the important adjective is that they are silent. In any political contest, the ability to organize and mobilize count for a lot, and you certainly don't see large groups alike "Catholics 4 Contraception" and so on. There's also the centuries-old tendency to stamp out those unfaithful to Church doctrine, and in this respect it doesn't matter if you're Martin Luther or Melinda Gates.
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Personally, I am not so heavily involved in these debates for my (empirically verifiable) belief is that population size is mostly a function of economic growth. That is, births generally fall as societies become wealthier. So, while Mrs Gates and her critics engage in a heated debate over the matter, I would focus more on increasing per-capita income as a relatively uncontroversial objective (except for deep greens, perhaps) in achieving similar goals.

That's just me, though. Some folks apparently prefer giving themselves an especially difficult time. Rest assured that Melinda Gates' allusions to promoting contraception being in line with Church teachings on social justice will not go down well with the orthodoxy and its followers. The technocratic pose simply does not work when you are addressing an especially evocative issue.

Though I do not side with Melinda Gates here, I do acknowledge that the Church could explain its case better in terms of "second-best" situations Catholics in poor countries do find themselves in. Moreover, the widespread phenomenon of cafeteria Catholicism when it comes to contraception is a wake-up call to those who believe that fire-and-brimstone rhetoric discourages those with more immediately pressing concerns.

It isn't like that anymore, if it ever was.

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Palace Coup? World Bank Vets Pick Okonjo-Iweala

News is becoming sparser as most of the Christian world slows for the Easter holidays. However, in the run-up to the selection of the next World Bank president which should happen in a fortnight or so, we've had ringing endorsements of Nigerian Finance Minister Ngozi Okonjo-Iweala. (See a previous post for further ruminations.) We begin with an interesting counterblast to the current climate of economist-phobia at development institutions post global financial crisis. While it may be trendy to put non-economists at these institutions, the Economist (surprise!) slams this trend in endorsing her as the best candidate for the job:

Okonjo-Iweala is an orthodox economist, which many will hold against her. But if there is one thing the world has discovered about poverty reduction in the past 15 years, it is that development is not something rich countries do to poor ones. It is something poor countries manage for themselves, mainly by the sort of policies that Ms Okonjo-Iweala has pursued with some success in Nigeria.

While I am nowhere near as partial to economists as a publication dedicated to them in name, I did enjoy the insinuation that the United States which encouraged World Bank lenders to avoid corruption was doing so by choosing its favoured candidate to yet again fill a top (international) job.

Meanwhile, the Financial Times seconded the motion, accentuating the positives of extensive work at the World Bank:

Its new leader should have a command of macroeconomics, the respect of leaders of both the funding and the funded countries, and the management skills to implement his or her vision. These requirements make Ms Okonjo-Iweala the best person for the role.

Having served as managing director under outgoing World Bank president, Robert Zoellick, she also has a unique knowledge of how the institution works. While one risk could be the temptation not to challenge the status quo, she might find it easier than other candidates to gain the respect of staff and build on Mr Zoellick’s legacy.   

More importantly for me, however, is that many World Bank veterans have come out in a strong show of support for Okonjo-Iweala. Lest you think that its employees don't matter, remember how the Ameriscum Paul Wolfowitz was eased out as World Bank president even during the Bush administration. From the Vanguard of Nigeria:

As the World Bank gets set to interview the three candidates vying for its presidency from April 9-11 before announcing its decision the following week, a group of former World Bank officials, including one-time chief economist, Francois Bourguignon, said it supported Nigerian Finance Minister, Dr Ngozi Okonjo-Iweala’s candidacy to become the lender’s president even as Governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi said Nigeria’s nominee was the best candidate for World Bank top job.

The 39 former managers, in a letter to the bank’s members, cited Okonjo-Iweala’s “deep experience in international and national issues of economic management” and said she had the ability to increase the bank’s effectiveness. Okonjo-Iweala, who was a managing director at the bank until last August, “would hit the ground running and get things done from the start,” the letter said.

According to the former World Bank officials, “challenges for the future president range from international fundraising to brokering agreements on global issues and while all the three presidency candidates, including former Colombian Finance Minister Jose Antonio Ocampo, have strong qualifications, Okonjo-Iweala’s skills cover the full spectrum of criteria. Uri Dadush, a former World Bank director of policy and one of the 39 signatories, provided a copy of the letter.

Before concluding I should also point out that an assortment of heterodox economists (including the LSE's own Robert Wade)--many from the Global South besides--signed on to a similar petition for the Colombian candidate Jose Antonio-Ocampo. Although they're both long shots given the history of the institution in question, Okonjo-Iweala is more of an insider to it and Ocampo an outsider.

Still, the IPE Zone comes down in favour of Okonjo-Iweala if previous merit is the criteria. Nevertheless, what's obviously fascinating about the succession race is that it not only pits vested Western interests against rising ones from the Global South but it is also a trial of sorts for mainstream economics' place in development practice. Go ask Jagdish Bhagwati.

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