Welcome to the 13th volume of Metaculus Mondays.
After forecasting some of America’s geopolitical concerns last week, we turn our attention to the future of the United Kingdom and European Union. No, we’re not forecasting whether the UK will rejoin the EU (?). Instead, we are forecasting two independent questions from the forecasting platform Metaculus:
- Will Scotland hold an official independence referendum (indyref2) by mid-2024?
- Will the European Commission borrow more than 50 billion euros in 2027?
After these new forecasts, we’ll review our previous forecast on whether there will be peace in the Yemen Civil War this year.
In addition to forecasting these questions on Metaculus, we will forecast similar questions when they exist on Good Judgement Open.
If you want to forecast these questions before reading, you can find them here (one; two; three; and their GJOpen counterparts here: two). If you have your own forecasts on these questions, respond to our comments on either Metaculus or Good Judgement Open and tell us what we missed or how we made you rethink your forecasts (links after each forecast).
For the first question this week, we are asked to forecast whether Scotland will hold an official independence referendum by May 2024. This question resolves positively if Scotland holds an official sanctioned independence referendum before May 2024, meaning “the UK government has approved the holding of the vote on or prior to May 2 2024.”
There are currently 162 predictions made by 37 forecasters, with a community median and mean of 42%.
Outside View
The first way to approach this question is to take a historical view-point.
The last time Scotland held a sanctioned referendum on independence was in 2014, 3 years after the Scottish National Party (SNP) won a majority (69 / 129) of seats in the Scottish Parliament. Due to the Scotland Act, the British Parliament Westminster has to agree to any independence referendum which they did nearly a decade prior.
Base-Rate
Although 2014 was the most recent example, since 1920 there have been 3 official independence referendums in the past 50:
- 1979
- 1997
- 2014
This leads to a base rate of just 6% per year.
At the same time, in recent history there has been correlation between SNP majority in the Scottish Parliament and independence referendums. With elections for Parliament coming up in 3 days time, and Nicola Sturgeon–the leader of the SNP–declaring her intent for an independence referendum by 2023 if the SNP wins a majority, perhaps it makes sense to also consider the inside view.
Inside View
It is clear the main component of our forecast is answering whether or not the SNP will win a majority of seats in the Scottish Parliament in this week's election.
Unfortunately for the SNP, the massive lead they enjoyed during the peak of the British pandemic appears to have abated as the country has gotten the pandemic mostly under control.
At the same time the SNP has seen a dip in the polls, so too has support for Scottish independence.
According to The New Statemen's election model, the SNP are forecasted to receive 37% of the vote and win 62 seats–a net loss of one seat and just short of the 65 needed for a majority.
And based on our election model, the SNP have a 30% likelihood of a majority which lines up with the numbers we are seeing from the above sources.
Predict It
Which, if true, would put us well at odds with the prediction betting platform Predict It. According to their prices, there is a 63% likelihood the SNP win a majority of seats and only an 18% likelihood they win 62 or fewer seats.
Good Judgement Open
This analysis also runs contrary to the community forecast at Good Judgement Open, which is forecasting a 68% likelihood that the SNP wins a majority of seats in this week's election.
Other Factors
Returning to the Metaculus question with a forecast for the upcoming Scottish elections, we now consider the likelihood of Scotland holding a referendum should the SNP win a majority.
Nicola Sturgeon has claimed "there will be no democratic, electoral or moral justification whatsoever for Boris Johnson or anyone else seeking to block the right of people in Scotland to decide their own future" should the SNP win a majority. She has also claimed that a referendum would be legal unless Boris intervened legally.
However, given the nature of the Scotland Act it appears that a court challenge would be nearly certain to hold up. At the same time, we are not convinced that should there be majority support for a referendum and should the SNP hold a majority in Scottish Parliament that Boris Johnson would be able to deny the vote–particularly given the changing leadership in Washington.
Therefore, we calculate an 85% likelihood of a referendum taking place should the SNP win a majority, with a 85% likelihood the referendum happens before May 2, 2024.
Initial Forecast
Given a 30% likelihood for an SNP majority in this week's elections, and a 72.25% condition probability of positive resolution, we forecast a 21% likelihood that Scotland holds an official independence referendum by May 2024.
What we're watching
- As mentioned earlier, the outcome of the SNP election this week is the largest factor impacting this forecast. An SNP victory almost ensures a battle for a second Scottish independence referendum with Boris Johnson, which greatly increases the chances of one taking place versus if the SNP is not able to capture the 65-seat threshold.
- While Nicola Sturgeon, leader of the SNP, has been vocal about the position she believes Boris Johnson will be in if the SNP wins their election this week. Sturgeon’s comments, while informative, are not diagnostic of Johnson’s decisions. We will be watching for a statement or commitment from Boris Johnson as a signal for this forecast.
- Like many forecasts we make, decision-makers are often heavily influenced by their constraints, social, political, or otherwise. British sentiments towards a second referendum, the U.K.’s parliamentary system, and even U.K. legislative procedure are all potential constraints on Johnson approving a second referendum. As such, we will be watching all of these factors closely to understand better how they might affect our overarching forecast on this question.
The second question is asking us to forecast whether the European Commission will borrow more than 50 billion euros in 2027.
More specifically, this question resolves positively if the European Commission, or other body or institution representing the EU, borrows more than 50 billion euros (in 2018 prices) in 2027. The borrowing cannot be made by an organization created by separate treaties between EU countries nor by borrowing by the European Investment Bank (EIB) or European Financial Stability Facility (EFSF).
There are currently 15 predictions with a community median of 70% and mean of 65%.
We wanted to forecast this question because we feel like its resolution is a statement not only on the future of the European Union’s economic and political health, but also that of the international community writ large.
If the EU is borrowing that much money in 2027 it means that both the EU’s economic and political well-being is strong enough that investors and politicians are willing to buy and sell EU bonds, and also that the international community (or at least those countries which are tangential analogs to those within the EU) are also borrowing at relatively high rates as well. We have also considered the possibility of the EU taking steps towards becoming more of a super-state in the intervening six years.
The question regarding EU borrowing is based on the report that came out earlier this month claiming the EU would be borrowing 150 billion euros annually until 2026. This spending would be targeted at making the EU’s economy more ecologically-friendly as well as more digitally advanced. It would also likely support countries whose spending reached highs during the Covid-19 pandemic.
At Global Guessing we tend to believe that forecasting events 10 years in the future is often a fruitless effort, as 10 years adds incredible amounts of statistical entropy to the forecasting process. This forecast asks us to predict an event six years in the future, which is close to that mark.
With that being said, we used the Metaculus community median and mean, as well as our own view (albeit only directional) of the EU’s borrowing behavior after six years of borrowing 150 billion euros, to inform our forecast for this question.
Initial Forecast
Based on the Metaculus forecasting thus far, our feeling that the EU will likely not drop borrowing by over two-thirds one year after borrowing so much more, and the direction that macro finance is headed in the next decade, we have arrived at a forecast of 65%.
Some of the factors that will affect future updates of this forecast will include the future of the EU’s joint-debt program which launched during the Covid-19 pandemic and the future of the EU’s climate change initiatives. We touched on this in our forecast of the Portuguese presidential election back in January when we discussed how Portugal’s position of leadership in the European Union would allow them to drive a green energy movement to drive demand for the country’s supply of lithium. This push may also lead to increased borrowing which would potentially result in a positive resolution for this question.
That being said, in the near future we plan to be judicious about designating signals from noise as there is so much time until this question would resolve, so while news may come out that seems directionally relevant, we may not immediately update this forecast accordingly. Much of this question is tied to a macro view of the world’s financial future, making future research and analysis necessary as well.
Our final forecast this week is on a previous forecast we made on Metaculus Mondays on whether there will be peace in the Yemen Civil War in 2021.
This question resolves positively if there is a cease-fire or peace agreement in the Yemeni Civil War by January 1, 2022. The agreement will have to last without unambiguous violations for 30 days and cover over 90% of territory in Yemen.
There are currently 35 predictions with a community median of 41% and mean of 35%. When we originally made the forecast, the community median was 45%, and when we updated our forecast (from 11% to 10%) a week after making it the median was 41%.
The primary factors that we considered when updating this forecast were the time constraints for the question (how much time is left in the year relative to our previous forecast update) and any relevant news signals that might inform our thinking.
Whereas in the past, a report about U.S.-Saudi talks to find a solution to the violence in Yemen may have affected our view on the situation more heavily. But other reports, such as Yemen’s recent on a Saudi airbase in Asir, have tempered that. We also weighed the possibility that even if the United States was able to broker talks between the Yemeni government and Saudi Arabia for a ceasefire, the presence of violent non-state actors participating in this conflict may make those conversations moot.
Iran is also a relevant player in this equation, as they have been reported to be backing the rebels currently embattled with Yemeni forces. And with Iranian elections, scheduled for this summer, quickly approaching, we think it is possible that Rouhani may be too preoccupied to effectively stop the country’s support for the Houthi rebels.
Iran is currently in talks with the United States over the JCPOA, and a deal Rouhani would like to get over the line before his re-election campaign. So peace in Yemen would ostensibly be pushed to after the election and the fuller integration of the next Iranian president, making the time constraint for this question even more potent.
Updated Forecast
Taking all of this into account, including the positive and negative effects of Yemen’s geopolitical situation as well as the uncertainty that accompanies the upcoming Iranian election, and the passage of time, we drop our forecast of Peace in Yemen in 2021 from 10% to 9%.
This is more a product of the time that’s elapsed since our previous forecast update than a reflection of any signals that we’ve identified in the interim. We will, however, be closely watching the many moving parts in the Middle East in the coming months, including the Iranian election, JCPOA discussions, Israeli elections, and Saudi-Israeli normalization talks to inform our next update for this question.
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