Arnold Kling  

Unchecked and Unbalanced Watch

PRINT
Is the Taylor Rule Really a Ru... If I Taught Greg Mankiw's Semi...

Pete Peterson writes,


the Los Angeles City Council is expected to overturn the 36-year-old policy of city-funded sidewalk repair, returning responsibility to property owners. The city is attempting to narrow a nearly half-billion-dollar budget gap. The sidewalk repair program costs $10 million annually in construction and another $3 million to $5 million per year in legal fees defending the aforementioned cases of people falling. Still, one wonders how effective the program has been as nearly half the city's pathways are currently deemed in need of repair at an estimated cost of over $1 billion.

Why has government grown since 1800? In the whig-history account, the United States became more urbanized, creating more externalities, resulting in more demand for government. Certainly, one could tell a story that sidewalk maintenance creates externalities in urban areas (you might not even have sidewalks in a rural area). So we need government to take over sidewalk maintenance.

The problem with the whig-history story is that it assumes that government takes care of the problem that it is supposed to solve. But it might not. It might be the case that individuals or small organizations solve the problem better.

Another example, which Russ Roberts and I discussed in a forthcoming podcast, is lowering the risk of salmonella in eggs. We have seen that the government solution did not work as well as intended. If there were no government involvement, I suggested that egg producers might organize to sponsor an inspection service. In fact, that apparently is the solution that emerged in the UK. For a long time, they have had a non-governmental service, called the Red Lion mark, that certifies eggs. See this commentary.

One theme of Unchecked and Unbalanced is that public goods do not have to be provided by government. In fact, lack of competition often makes government ineffective in providing public goods. Eggs and LA sidewalks are examples.


Comments and Sharing





COMMENTS (9 to date)
jsalvati writes:

I wouldn't really call the egg example an example of an externality. I think liberals would tend to describe this as some sort of information related market failing. But your point is probably applicable in any case.

GU writes:

I read a story a couple years ago about all the fraternities and sororities near USC raising money to repair the (public) road all of their houses were located on ("The Row"). I'm sure their repair was more effective than the city's would have been, but I doubt they received a tax rebate.

ps L.A. has pretty terrible roads in general, which is all the more ridiculous given the lack of real winter weather (which obviates the need for salt and also allows road repair crews to work year round).

Gaspard writes:

I invite Arnold to stroll around the suburbs of Athens, Greece where "pavements" are indeed the responsibility of property owners, and they are so disjointed and irregular that everyone walks in the road with the cars and the mopeds. A complete nightmare if you have small kids, a pram, or any kind of mobility problem.

Ted writes:

The problem with the whig-history story is that it assumes that government takes care of the problem that it is supposed to solve. But it might not. It might be the case that individuals or small organizations solve the problem better.

I don't see that as being a necessarily assumption to what you term 'whig-history' (although your definition is not what I would recognize as the well accepted definition of whig history). Let's assume the story that urbanization creates more externalities is true. It may also follow that a demand for government increased, but that doesn't mean that what actions government take will be successful.

Now, about the specific program. The problem for sidewalk repair in LA isn't that government monopolies suck at providing public goods. They often do, but I don't think that is the problem here. Sidewalk repair should be an easy thing to do. The problem here is that LA county wastes so much damn money on other crap (like $500 million public schools!) that they simply don't provide necessary services. Then they come around whining about how they can't afford to do this basic public service. It's like those recent stories about cities shutting down their fire departments in response to their budget problems. Are they seriously arguing there is nothing else they can cut but the fire department? And frankly, if it were really true it was impossible to cut spending anywhere else but the fire department then I think that would be grounds for a tax increase.

Substantial Monopoly power is usually inefficient, but that is not the only problem with government. Some functions of government are so basic that monopoly power cannot explain a screw up. What I think explains a lot of government screw up of basic functions is that rather than using your revenue to fund a good provision of basic public goods, bureaucrats find little pet projects that they find appealing and shower those with tax payer dollars. Then all of a sudden they whine they don't have money for public services so they either raise taxes, privatize them, or just give crappy quality on them.

Personally, I'm fine with privitizing sidewalk repair (but I'm also fine with it be a public good) - but it also angers me because it's an example where government is pushing off a fairly basic function to instead fund their own pet projects.

On the egg thing, one of the advantages of capitalism though is that people learn. My suspicion is that use of the Salomenlla vaccine by American farmers will skyrocket now and the problem will correct itself.

Andy writes:

I'm sure property owners are ecstatic - not only because they now have additional costs and liability, but they're not going to pay less taxes as a result.

Arnold, I think you've misidentified the problem. It's not that the city government is incapable or incompetent at repairing its sidewalks (I'm agnostic on whether it should be government's responsibility, but I don't think it's absurd to suggest that it is). The problem is that the city government (and most small government in California and many other places) is getting so much of it's tax revenue sucked into the black hole of personnel, pension and medical costs. City government, for the most part, used to do a decent enough job before the black hole existed.

Various writes:

Why has government grown since 1800? I think you'll agree there are some rational reasons. But one significant reason is because it can.

Yancey Ward writes:

Legal fees are half the amount spent on maintenance? Sheesh.

Rebecca Burlingame writes:

It may well be that local city governments in the future may need to stylize themselves, as to what kinds of services they are actually willing to provide and citizens are willing to be taxed for...a two way street. Not every place is going to be willing to build and maintain sidewalks for the long haul. But then some places have nice sidewalks that barely even get used. I only hope that if individuals are willing to do the work themselves that they don't get sued the way cities continue to get sued over sidewalks now. Perhaps an appropriate sign might read, the owner' sweat went into this sidewalk...use at your own risk!

Dan Weber writes:
Then they come around whining about how they can't afford to do this basic public service. It's like those recent stories about cities shutting down their fire departments in response to their budget problems. Are they seriously arguing there is nothing else they can cut but the fire department? And frankly, if it were really true it was impossible to cut spending anywhere else but the fire department then I think that would be grounds for a tax increase.

See http://en.wikipedia.org/wiki/Washington_Monument_Syndrome.

Comments for this entry have been closed
Return to top