Art Carden  

A Good Heuristic for Public Policy? Does This Require Extra Intelligence and Virtue?

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I'm a fan of the information-economizing value of heuristics, though I certainly recognize that they can get us in big trouble. At a Jack Miller Center event a few years ago, Mike Munger said that whenever we say "the state should..." we should replace "the state" with "the politicians we see who actually get elected." That changes the game somewhat as when we're thinking about public policy, we aren't thinking about policies enacted by disinterested, wise, virtuous, technocrat-advised-autocrats. Rather, we're thinking about policies enacted by real people with real flaws and real limitations who are responding in real time to real incentives. Hence, the outcomes we see are a far cry from what a well-intentioned economist can dream up in his office.

Hence, I propose a heuristic: If it requires policymakers of above-average intelligence and virtue who are willing to act contrary to their incentives in order to work, then it is a bad policy.

It seems pretty obvious, and I'm sure it isn't original. And yet: how often do you hear people saying that we need to vote the bums out and replace them with the wise, the virtuous, and the incorruptible? How often are people shocked (SHOCKED!) that politicians respond to incentives? How often do people treat systemic institutional failures as if they are individual moral failings by people who are of virtue insufficient for their office? How often do we blame bad outcomes on "bad people" rather than "bad institutions"?


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CATEGORIES: Public Choice Theory



COMMENTS (9 to date)
Joe Teicher writes:

Very true. I think that is why for the most part libertarianism will not have much real world relevance. Mostly libertarians just want to scold politicians for not acting sufficiently against their own interest.

Jay writes:

Joe, libertarians don't want to scold politicians. In general, libertarians want to strip the government of powers that give politicians the ability to enrich / empower themselves at the expense of the public. Then they won't need scolding.

Giving the current expansive government power to a politician is like giving cocaine to an addict. Then you tell him "Hold on to this because there are some situations where it will have an important and legitimate use. I can trust you to only use it in those few appropriate instances, right?"

Restricting power and scope of the government is what most libertarians are after.

Jay writes:

Basically, we want the cocaine out of the hands of the addict.

Gabe writes:

I believe in the path you have laid out, in which the government would work for the people and not for them individually. However there is a large problem with this that arises from the public. Many people have incentives to better their own lives so they vote for those who may temperedly make the present seem better but drive the future for the worse to be reelected. However if more of the public was educated on the matters of what types of policies lead a better future for not just them but numerous other factors even though the transitions may be difficult then. Then perhaps the “right” people would be voted into the positions.

Joe Teicher writes:

Jay:

Doesn't a policy of reducing government power require virtuous politicians to act against their interest? Otherwise, I don't see how it can ever happen.

vikingvista writes:

The incentives faced by mortals in the halls of government, I can understand. What is less clear to me are the incentives among ordinary adults outside of government to follow romanticized notions of what brute force can accomplish, even in the face of experience with both workable private solutions, and repeated spectacular and often tragic government failures.

Why don't ordinary self-interested people instinctively desire to *avoid* using government to solve their problems? It seems as though they should, and if they did, government would quickly wither.

Pajser writes:

Carden's criticism relies on popular but vague notion of "incentive." Individual wealth increase already doesn't seem to be the main motive for politicians. For instance, they could vote for dramatic raise of their own wages, but it doesn't happen. The main motive of the politicians is, probably, power. Which depends on support from voters, but also on support from other powerful people. If votes are the main influence, politicians will try to actualize the goals of the voters, and that is exactly what is needed. The influence of other factors, beside votes, can be reduced. Is there a reason to believe there is theoretical limitation of such improvement? As Gabe noted, the motives of the voters are still the problem.

Nathan W writes:

Why would ethical people who have no interest in abusing their power have any interest in fighting so hard to achieve political authority in order to earn a fraction of what people with equivalent responsibility in the private sector can earn, all for the right to be pilloried completely and have their personal lives picked to pieces?

People get the leaders they deserve.

I agree, institutional changes are needed so that incentives will be aligned with ethical outcomes.

US-style politics of regularly slinging mud in any and all directions regardless of whether it's warranted is behind much of this. Decent people would not want to participate in such a game, and the sad thing is that it is precisely how it is "supposed" to work.

Joe C writes:

Art,

I don't necessarily think that it is easy to separate "institutional failure" and "individual failure" as you seem to be doing in the latter part of the post. Maybe I am misreading, and please correct me if so, but I have a few qualms with your statements.

Many people do attribute institutional failure to individual morals. When people say "Obama is doing this and I like/dislike it", they are doing just that. People don't say "The administration/executive of the EPA/HHS/etc." Many are just not that politically sophisticated to know where to point fingers.

Same thing when people scream about individual members of Congress. Individuals respond to incentives, yes. Incentive structures are created by institutions and individuals interacting within those institutions. With a plethora of legislative choke points and parliamentary procedures built into the Congress, it is not easy to see where the institutional incentives for bad behavior end and the individual ones begin.

I don't think our points are that different, but I think that bad institutional structure is just as much to blame for our current political situation as the quality of individuals the institutions attract.

JC

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