David R. Henderson  

Time Inconsistency in Government Policy

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When I teach various concepts, I try to connect them with specific stories because I find that students remember stories. This is especially important when the concept is labeled with a very abstract label. Take "time inconsistency." When I teach that, I tell the story of Charlie Brown, Lucy, and the football.

This last week in Congress, Rep. Tim Johnson, R-IL used the same story to challenge the government's credibility on Afghanistan. He said:

I think it was November of 1952, when I was about 6 years old, that Charles Schultz and his Peanuts comic strip came out with the annual saga where, every year, Charlie Brown comes up to the football, and Lucy tells Charlie Brown year after year, "Just one more time, we'll let you kick ball." And each year, she pulled the football out, only to find Charlie Brown on his rear end.
I would suggest to you, Mr. Speaker and Members of the House, in this somewhat stretched analogy, that a series of Commanders-in-Chief are Lucy, and we're Charlie Brown, and the football is the illusive promise of a goal that we simply cannot reach.

I don't think the analogy is stretched at all.


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CATEGORIES: Public Choice Theory



COMMENTS (4 to date)
Bob Murphy writes:

Hmmm... I don't have a better analogy for you off the top of my head, but I'm not sure these are illustrations of time inconsistency. They seem more like subgame (im)perfection or simple lying.

Jeff writes:

The classic example is a government that tells people that it won't provide post-flood assistance to people who build in the flood plain. Once the flood happens, politics dictates that they do it anyway. Everyone knows this will happen, so the government's threat to not provide assistance is not credible. So people go ahead and build in the flood plain. It's called time inconsistency because what was optimal for the government in the first period (don't provide assistance) is not optimal in the second, post-flood period.

David R. Henderson writes:

@Bob Murphy,
I think you're right.
@Jeff,
Ditto what I said to Bob.
If I could retract this post, I would. Not one of my best, to put it mildly.

David Friedman writes:

The example in my Price Theory is rent control. The mayor wants to buy the votes of renters at the expense of landlords, so he freezes rents. To avoid an inefficient allocation of existing apartments, he leaves sublet rents uncontrolled, thus making rent control into a partial property transfer from landlords to existing tenants. To avoid discouraging future construction, he announces that new apartments will be uncontrolled.

Ten years later ... .

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