Balsa Research 2024 Update

For our annual update on how Balsa is doing, I am turning the floor over to Jennifer Chen, who is the only person working full time on Balsa Research.

For my general overview of giving opportunities, see my post from last week.

Previously: The 2023 Balsa Research update post, Repeal the Jones Act of 1920.

tl;dr: In 2024, Balsa Research funded two upcoming academic studies on Jones Act impacts and published the Jones Act Post. In 2025, we'll expand our research and develop specific policy proposals. Donate to Balsa Research here.

Today is Giving Tuesday. There are many worthy causes, including all of the ones highlighted by Zvi in a recent post. Of all of those orgs, there is one organization I have privileged information on – Balsa Research, where I’ve been working for the past year and a half.

Balsa Research is a tiny 501(c)(3) currently focused on repealing the Jones Act, a century-old law that has destroyed American domestic shipping for minimal gain. You can read the long Zvi post for details, or this Planet Money podcast transcript if you would like the arguments from someone who is not Zvi.

This is not the most urgent challenge facing humanity, but we believe that it’s one where relatively small investments have a chance to unlock fairly large economic benefits.

This post is an update on what we’ve been up to this year, and our plans for 2025.

Table of Contents

1. What We Did in 2024.

2. Looking Ahead to 2025.

3. Why Support Balsa.

What We Did in 2024

Our work this year focused on building a robust foundation for future policy change:

In March, we opened up an RFP for academic studies quantifying the costs of the Jones Act after our literature review revealed that it’s been several decades since someone has attempted to do this.

We’re funding studies for a few different reasons. For one, updated numbers are just nice to have, for understanding the state of the world and our likely impact. They’re also good for advocacy work in particular – numbers grow stale over time, and people like seeing numbers that are from the 2020s more than they like seeing numbers from the 1990s in their policy one-pagers. Lastly, we know that DC does occasionally pay attention to policy findings coming out of top econ journals, and this shapes their policy choices at times. We’re not counting on this happening, but who knows!

We have accepted proposals from two different teams of academics working or studying at top econ departments in the US. The contracts have been signed, the teams’ data sets and interns are getting paid for, and we now await their preliminary findings in 2025.

The two proposals take complementary approaches:

• A Macro-level Trade Impact Model: This proposal aims to construct a large-scale detailed gravity model of domestic and international trade flows across the complex network of routes, evaluating the Jones Act's comprehensive impact on US trade patterns. This will create a "gains from trade" view of the Act and its potential repeal. By comparing the current constrained system with a hypothetical unconstrained one within this model, the study will estimate the hidden costs and inefficiencies introduced by the Jones Act.

• A Micro-level Agricultural Commodity Analysis: This proposal focuses on the impact of the Jones Act on U.S. inter-state agricultural trade, with a particular emphasis on California-produced goods, aiming to pinpoint the exact impact of the Jones Act on their transportation and pricing. Similar to the methodology used in a recent paper on the Jones Act’s impact on US petroleum markets, this granular analysis will provide concrete, quantifiable evidence of the Act's effects on specific goods. By focusing on a specific sector and concrete details, this research could offer valuable hard data to support broader reform efforts and be extended by further research.

We’re excited about both of these – it’s important to both get a better macro view, and to be able to point to fine-grained impact on specific US states and industries.

We consider the RFP to still be open! If we get more exciting proposals, we will continue to happily fund them.

We have also published The Jones Act Post. This was the result of months of research, interviews with experts in the policy sphere and various stakeholders, plus Zvi’s usual twitter habit. This is Zvi’s definitive case for Jones Act repeal, but we obviously didn’t fit in all of the policy minutiae that we picked up over our literature review. Those are going to go into additional documents that are going to be crafted to more precisely target an audience of policy wonks.

We’re also working to develop relationships with key players and experts to better understand both the technical challenges and political dynamics around potential reform.

It would be reasonable to say this is slow progress. We've prioritized getting things right over moving quickly, and have a modest budget. Policy change requires careful preparation - especially on an issue where entrenched interests have successfully resisted reform for a century.

Looking Ahead to 2025

With this foundation in place, we’re positioned to do a lot more work in 2025. We’re looking to do the following:

1. Launch a second round of funding for targeted academic research, informed by the preliminary findings of studies funded in our first round.

2. Get a better understanding of key players' interests, constraints, and BATNAs to identify realistically viable reform paths, and reasonable concessions.

3. Building on all of our existing research, develop detailed and viable policy proposals that address key stakeholder concerns, including:

   • Protecting union jobs and worker interests

   • Maintaining military readiness and security capabilities

   • Structuring viable transition paths and compensation mechanisms

4. Draft model legislation that can serve as a foundation for reform.

From the very beginning, our philosophy has been to focus on the useful groundwork that enables real policy change, and this is where our focus remains. Additional funding would allow us to expand our impact and accelerate our work.

Why Support Balsa

To be clear: we have funding for our core 2025 expenses and the initiatives outlined above (but not much beyond that). Additional support would allow us to expand our impact through better assisting activities such as:

• Industry and labor outreach ($5,000+)
  Fund attendance at three key maritime industry and union conferences to build relationships with people working in shipping, unions, and policy. This would cover registration fees, travel, and accommodations.

• Additional Research & Analysis (~$30,000 per study)
  Fund additional academic studies to strengthen the empirical case for reform, complementing our existing research initiatives, as we discover new opportunities.

• Policy Engagement ($85,000)
  Hire a DC-based policy liaison to build some key ongoing relationships. This would help us better understand the needs and motivations of the people and committees that we need to convince, allowing us to create more targeted and timely policy documents that directly address their concerns.

• Additional Causes (unlimited)
  We see opportunity in many other policy areas as well, including NEPA reform and federal pro-housing policy. With additional funding we could address those sooner.

It would also give us additional runway.

While changing century-old policy is not going to be easy, we see many, many places where there is neglected groundwork that we think we’re well positioned to do, and we can do well. There are many studies that should exist, but don’t. There should be analysis done of the pros and cons of various forms of reform and partial repeal, but there aren’t. There should be more dialogue around how to grow the pie in a way that ensures that everyone comes out of the deal happy, but we see very little of that. These are all things we intend to work on at Balsa Research.

We invite you to join us.

If you have experience with maritime shipping, naval procurement, connections to labor unions, or anything else you think might be relevant to Jones Act reform, we'd be interested in talking to you and hearing your perspective. Get in touch at hello@balsaresearch.com and let us know how you might be able to help, whether that's sharing your insights, making introductions, or contributing in other meaningful ways.

You can also donate to our end-of-year fundraiser here. Balsa Research is a 501(c)(3) nonprofit organization, which means donations are tax-deductible for US taxpayers.

Balsa Research is a small organization - still just me, with Zvi in an unpaid, very part-time advisory role - and our progress this year has been possible only through the generous support of our donors and the many people who have shared their time and expertise with us. We're grateful for this community of supporters and collaborators who continue to believe in the importance of this work.