What would Alberta’s GDP be if it had no oil? So many jobs are dependent on this sector of our economy - from equipment manufacturing to construction to engineering and financial services. It’d be hard to envision what Alberta would be like if it did not have oil. But how would our democratic institutions fare? Is there merit in the thought that affluence breeds apathy in this province, as reflected in our recently abysmal showing at the polls? Are Albertans too happy to care about any sort of difference a good government might be able to make when it comes to everyday life?
Remember this Calgary Herald Survey from last month? (h/t Werner)
In a Leger Marketing opinion poll of 900 Albertans provided exclusively to the Herald, only 337 people — 37.5 per cent — said they didn’t vote, a situation often encountered by pollsters asking about voting. They speculate non-voters are less likely to respond to surveys and some are reluctant to admit they failed to vote.
The main reason cited by 21 per cent of non-voters in the Leger survey was they didn’t have time to get to the polls.
One in 10 of the people surveyed between March 12 and 25 said they weren’t allowed to vote, either because they were not on the voters’ list or weren’t Canadian citizens.
A similar-sized group said they weren’t interested or don’t know much about politics. Others didn’t know who to vote for or didn’t like any of the candidates. Some simply boycotted in protest.
Too busy to vote. Too busy turning oil into cash.
Does this idea of affluenza hold up in any other data?
From Cowboy Economics: Economists find no correlation between nations’ resource endowments and the quality of their institutions
A paper co-written by an Indiana University economics professor takes issue with the widespread idea that there is a “natural resource curse” that puts countries with oil or mineral wealth at a disadvantage when it comes to economic growth.
The paper also shows that a common explanation for the curse — that an abundance of oil or other point-source resources causes countries to have lower-quality civic institutions — isn’t true.
However, that’s not the essence of what the authors of the paper are trying to say. It goes a little more like this (from pages 13-14, pdf):
We do not claim, of course, that good institutions hurt long-term growth. Instead, we conclude that countries with good institutions that would have been rich anyway, tend to benefit less from the positive effect of natural resources while countries with weak institutions that would have been poor in the absence of substantial natural endowment reap relatively large benefits from their natural resource wealth. In other words, Norway would have done well with or without oil, but Kuwait without oil would have been poor.
. . .
Various authors have claimed that either oil or mineral wealth in general exert a negative influence on the quality of institutions, income inequality, investment rate, and so on. While some of these links may indeed be present, we think that all of these studies are flawed due to the relationship between oil wealth and per capita GDP that we established earlier.
Hey, Alberta might not have the most ideal democracy. I mean, we suppose that having a higher percentage of voter turnout is a good thing. But is it, really? If people are too busy making money to stay informed, they value other things more than showing up to vote. And if they can’t see the value in voting, do we really want them doing it? Moreover, is it fair to make voting compulsory, and thereby increase the proportion of uninformed voters? I’m making an assumption here - that most of the people who don’t vote in Alberta are ill-informed; I’m sure some well-informed voters stayed home during this year’s election, and I’m betting they were in the minority.
In a way, the ‘too busy to vote’ theory holds up, especially from an economist’s (admittedly simplified) worldview of utility maximization. Voters see the benefit of voting, whereas non-voters simply abstain. It is certainly possible that the majority of Albertans receive a greater benefit on the economic side of resource development, and so they devote their time and energy to said resource. As a result, democratic institutions suffer. But this isn’t necessarily a bad thing. Dare I say that Ed Stelmach may have been right on the money when he said:
“They’re just happy with life, most of them,”
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{ 3 comments… read them below or add one }
John Clark 07.25.08 at 10:50 pm
Starting with Don Getty and moving forward to Ralph Klein and onto the present the Conservative Government rested on its back side not encouraging any kind of manufacturing business unless it happened to be making plastic goods.
Fights with the pipeline companies during Klein’s reign pushed most of the ethylene out of the oil into NOVA CORP. This gave nova the control of the plastic industry. But because of little interest beyond production of the stuff there was never a secondary industry started.
One wet dream was Alberta Intermodal Services which cost over a hundred million dollars to set up. Deals were made with the CP by Intermodal Services to guarantee containers into Alberta to start their inland port. IMS guaranteed the CP 700 dollars a container back to Vancouver for every container they could lay down in Alberta. If a company could only afford to pay 200.00 for the load back to Vancouver on that container the IMS would pay the other 500 out of pocket so to speak.
The idea was with a cheap subsidized transport to the West Coast a manufacturing industry would bloom in Alberta. It never happened. Celanese, Dow Chemical and a newly started log home business in Spruce Grove Alberta used up the containers. All are gone now and the AIS turned out to be such an embarrassment for the Government it was sold to the CP Rail for .08 cents on a dollar of value.
The CP just a few years later decided Alberta wasn’t paying enough and pulled the trains out of here putting them east into Ontario.
Klein decided on the Energy Business starting off by taking control of all the power lines. This was done by telling the population it was a move to get equal funding for computer rooms in all the schools. Now having control of all the power lines he sold them all this time asking no more than .03 cents per dollar of value.
The thrust one one of following political dogma not one of doing business or even getting the best for the province. Everything had to be private to operate in his mind.
Now, electricity which we were using at .02 per kwh the least expensive in all north America jumped up to .07 per kwh and higher making it the highest priced electricity in the country. This killed a lot of the plastic industry which used electricity for much of their heating.
Natural gas which was also used was forced into US market prices by NAFTA. This effectively killed industry.
Now, Alberta is busy in renaming a bunch of oil field support businesses into “new industries” to bolster their appearance on the stats.
Now, these guys have reduced our 25% royalty down to 19%. So, yes the oil industry gives us wages but precious little else. I am of a mind that we are paying them to take the resource away.
Bids are asked on all Government Projects but, who bid on the projects is never published and the prices for the various bids are never published. Same guys get the bids over and over.
Every thing they put out for bid is “cost plus” including 3P projects.
It could be argued successfully this crew has totally ruined this province.
John Clark 07.25.08 at 11:37 pm
They have now started a world wide search for people to come to Alberta offering them instant citizenship. The scope of this operation is going to change the face of Canada and, Harper is supporting it.
kns 07.26.08 at 8:04 am
There are many things going on, I would think; one of which would be that Albertan’s are “too busy”. But I can’t help wondering if a survey of Albertans’ tv watching habits might reveal ample time to get out and be a participating citizen. And then there’s the paradox of Albertan’s often complaining about taxes, about the federal government, etc. and the lack of any real action to follow it up. This is of course leaving aside any question of what it means to live in a country with “responsible government”.