But would Musharraf’s fall be good news? It’s not obvious, since we don’t know who will replace him (i.e., Bhutto or someone more anti-Western). And even if it’s Bhutto, we don’t know how much help she’ll be once in office.

Intrade has just listed a contract that may help provide an answer. In addition to adding Musharraf to their foreign leader departure series (as Chris noted yesterday), they also added a parlay for Musharraf leaving and Osama being captured (at my suggestion). So if these contracts turn out to be liquid, we’ll be able to get a market-based estimate of the correlation between Musharraf and a reasonable summary statistic for whether outcomes in Pakistan are good for the West.

Of course, the usual caution about correlation and causality applies here. If Osama is caught tomorrow, it probably helps Musharraf keep his job. The longer term conditional probabilities should be less contaminated by this problem and the difference betweens between the prices of the long and short dated contracts might be used to contract a clean(er) estimate of a causal effect.

This seems like the most interesting geopolitical decision market to come along in a little while. But it’ll only work if it’s liquid. So those of you with Intrade accounts, put up an order or two. Your country needs you.

Benazir Bhutto’s Op-Ed in the New York Times

Very conveniently, the assassination attempt against me last month that resulted in the deaths of at least 140 people is being used as the rationale to stop the democratic process by which my party would most likely have swept parliamentary elections.