Why Government Fails So Often: And How It Can Do Better (18 page)

Critics of the political process often focus on the fact that interest groups are unequal in the financial resources that they can bring to bear on it. A recent synthesis of the data on political inequality emphasizes the utter numerical dominance of lobbying groups favoring business interests, and the weaker turnout among lower socioeconomic status voters despite recent reforms facilitating voter registration.
⁴²
This lower turnout, along with our first-past-the-post electoral
system (discussed in
chapter 3
), seem to be important reasons why policies favoring the poor—welfare benefits, for example—are difficult to enact.
⁴³
(Group turnout by blacks, however, was apparently higher than by whites in the 2012 presidential election.)

Academic and journalistic analyses alike show that business interests often get their way in policy disputes, especially when they can unite on a common position.
⁴⁴
Money counts in politics, and mobilizing key political support (often aided by money) counts even more. Still, even well-heeled, well-connected, well-represented business interests often fail to get their way—particularly (but not only) from Democratic Congresses and administrations. Some other groups have less money but better organizational skills, name recognition or dynastic ties, a larger and strategically distributed voter base, superior contacts in Washington, more charismatic leaders and telegenic messages, broader and more supportive media coverage, stronger legal claims, the inertial advantages of a policy status quo, better arguments on the policy merits, and the most potent electoral asset of all—incumbency. These advantages are more important than ever, given the dramatically lower costs of mobilizing today through e-mail and social media. They often enable diffuse interests to overcome the remorseless “logic of collective action” explained in Mancur Olson’s book of that name, discussed in
chapter 5
.

The business community, moreover, is anything but monolithic. It often divides sharply—for example, between exporters and importers on trade policy,
⁴⁵
between manufacturing and service industries on tax issues,
⁴⁶
between large and small companies on tax policy,
⁴⁷
and among employers, providers, and insurers on health care cost control. The Obama administration’s bailout of General Motors and Chrysler was opposed by Ford and foreign car makers. Also, some business interests will coincide with those of consumers, taxpayers, or labor interests—for example, policies favoring deregulation (discussed in
chapter 11
) or more cost-effective regulation; economic growth and innovation; price and quality competition; wider consumer choice; reduced health care costs; tax reform; and so on. To prevail, they may have to make large concessions to strategically placed adversaries.
The auto bailout, for example, could never have happened without the support of the autoworkers and allied unions in key presidential battleground states that received huge financial and pension protections in return.
⁴⁸

The political process is so complex and opaque, and the role of ideological zeitgeist such as environmentalism, gender equality, deregulation, civil rights, and market idolatry is so pervasive, that it is usually impossible—even after the fact—to know for sure how weighty each of the many politically relevant factors might have been in determining the policy outcome. Well-heeled groups often lose out to more impecunious ones; indeed, populist denunciations of corporate influence and moneyed interests are sometimes effective political weapons, as in the defeats of Mitt Romney, who was the business community’s standard-bearer, and of Linda McMahon, who spent some $100 million in her 2010 and 2012 failed Senate bids. Corporate interests often refrain from political activity out of fear of retribution if their preferred candidate loses. One cannot plausibly explain in simple materialistic terms the countless legal and political victories of environmental, disability, minority, immigrant, gay rights, AIDS treatment advocacy, small business, proregulation, and other relatively low-budget interest groups. This more nuanced account does not mean, of course, that financial resources are not valuable and sometimes decisive, only that otherwise strong candidates attract much financial support, that financial advantages are often outweighed by other political weaknesses, and that gauging how influential they might have been in any given case is very difficult.

By the same token, claims that regulatory agencies are “captured” by powerful business interests are common but often beg the most important questions: What does capture mean? What are the underlying merits of the dispute? Is there an objectively discernible “public interest” in the matter, or are there instead merely competing conceptions of what constitutes sound public policy? Are there plausible public interest arguments for the positions that the industry advocates and that the government adopts, or are those positions only in the industry’s self-interest? If the industry wins, does that necessarily
mean that the public loses? Are the regulated firms monolithic such that we can speak intelligibly about “the industry,” or are there conflicting interests among these firms that contradict the notion of a single industry position? Can private enforcement litigation constrain regulatory capture? And most important, how often do concentrated interests actually get their way?
⁴⁹
Unless we can answer these questions with confidence, how can we know what regulatory capture means when it has actually occurred, and how it bears on the merits of any particular policy issue?

Any satisfying answer to these questions, I believe, must bring together two related and mutually informing kinds of inquiries, one empirical and the other theoretical. The first draws upon data about the actual performance of particular policies, assessing their effectiveness in light of the criteria discussed in
chapter 2
. The second draws upon a rich body of social science analysis to identify and elaborate the deep structural reasons why public policies fail so frequently, why they occasionally succeed, and why they often fall somewhere in between failure and success.
Part 2
will integrate the empirical evidence and the theoretical explanations.
Chapter 5
, for example, analyzes policy makers’ incentives, which include their need for interest group support and for policy-relevant information, some of which can be obtained only from such groups.
Chapter 7
analyzes how well-functioning markets, which business organizations often claim to promote, tend to impair policy effectiveness.
Chapter 8
draws on empirical assessments of many specific programs, including related interest group activity, to show how and why policy implementation fails so often.
Chapter 11
does the same for successful policies.

ACCEPTANCE OF SOCIAL AND ECONOMIC INEQUALITY

By most measures, inequality in the United States is rising and is now greater than in other comparable societies.
⁵⁰
(Consumption-based measures, which focus on the goods and services that people actually have and use, show less inequality than pretax and even posttax
measures.) Economists sharply dispute the magnitudes,
⁵¹
and especially the causes, which surely include growing educational disparities, particularly affecting men and minorities; assortative mating by high-income couples; competition in manufacturing from low-wage countries; immigration’s effects on low-skill American workers; lower rates of marriage and of intact families; high incarceration levels; more economic gains from better education; and redistribution programs that benefit the elderly and well-off disproportionately to low-income families with children.
⁵²

Although Americans are deeply committed to the ideals of legal equality and equal opportunity, we evidently find current levels of
social
and
economic
inequality regrettable but not a high-priority issue, much less one that our government should do much about. A 2011 Gallup poll found that only 1 percent of Americans believed that it was our most important problem (a percentage even lower than for those who cited foreign aid). Other research finds that even a tutorial presenting inequality as harmful had little or no effect on attitudes but did reduce respondents’ trust in government.
⁵³

Americans, moreover, find inequality more acceptable than Europeans do. Economists Alberto Alesina and Edward Glaeser have compared public attitudes and comment, “Europeans maintain a belief that birth determines status and the poor are trapped. Americans believe that they live in a land of opportunity where the people who stay poor are those who are too lazy to pull themselves up by their own bootstraps…. Across countries, places that believe that the poor are trapped are much more likely to redistribute than countries that do not have this belief. Across the United States, the states where more people believe that achievement is determined by family background are more likely to have more generous welfare payments.”
⁵⁴
They note (writing in 2004, before the financial crisis) that these distinctive American attitudes persist in the face of certain realities that might seem to refute them. For example, they cite data indicating that the poor seem to work as hard in the United States as in Europe, and that (contrary to the Horatio Alger myth) social mobility in the United States has stalled and (contrary to
common perceptions among Americans) is no longer greater than in some other developed countries.

One possible explanation for this difference—that Americans are less generous toward the poor—is clearly false. Americans are vastly more charitable toward the poor and more generally. Social scientist Arthur Brooks has shown that this is mostly attributable to Americans’ far greater religiosity; that most of this charity goes not to religious activities but to secular ones such as education, health, and social welfare; that low-income families give away a higher percentage of their incomes than do better-off families (especially if the former’s income is from earned wages rather than government transfers); and that self-described “conservatives” are more likely to give, and give more generously, than self-described “liberals” with comparable incomes. Alesina and Glaeser present additional data consistent with Brooks’s claim that Americans are more charitable than Europeans, and speculate that the “public provision of welfare (in Europe) in part crowds out private charity” and that “Europe’s more generous provision of welfare does not stem from a greater innate endowment of altruism in Europe.”
⁵⁵
(In reviewing their work, I have argued that the United States–Europe comparison is more complex than they allow; in particular, they underestimate substantially the true size of the American welfare state, missing its most important feature: its reliance on private provision of certain benefits through policy instruments whose costs are not wholly reflected in public budgets.
⁵⁶
)

Equality, as legal scholar Peter Westen has explained, is an empty concept until one specifies the particular respect in which equality is being assessed and the variables that one is holding constant.
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In American political ideology, equality is a founding concept gloriously inscribed in our Declaration of Independence. But for most Americans, the distinction that matters most in thinking about equality is that between equality of opportunity and equality of result. For most Americans, this distinction is a sharp one. (For many affirmative action proponents, it is
too
sharp.
⁵⁸
) Be that as it may, the distinction is a cliché in political debates, one that few policy makers are prepared to repudiate—at least publicly. This cliché masks our unwillingness to
define precisely what is meant by opportunity and result, and the difficulty of figuring out the empirical relationship between them.

Finally, political inequalities—surely an important cultural fact—tend to promote, or at least preserve, whatever economic inequalities the market generates. As political scientists Kay Schlozman, Sidney Verba, and Henry Brady show in a recent, compendious study of the subject, these class-based political inequalities are manifest and reinforce one another with respect to voter turnout, interest group activity, campaign finance, and other forms of civic participation.
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These inequalities are deeply embedded in the political culture, reflecting both constitutional values limiting government regulation of campaign contributions and other efforts to “level the political playing field” and civic values that are more sympathetic to business interests than to labor unions,
⁶⁰
although unions—despite their decline, especially in the private sector
⁶¹
—are very active in campaign finance and in politics more generally.
⁶²
(Campaign finance’s actual effects, discussed in
chapter 7
, are far more complicated.) Such inequalities, moreover, tend to be self-reinforcing, partly due to uncontrollable technological and macroeconomic changes, have few countervailing forces,
*
and seem morally acceptable to most citizens.
⁶³

RELIGION AND POLITICAL MORALISM

Policy debates in the United States are pervaded by religious convictions, some quite dogmatic, and are also inflected by other moral claims. This is hardly surprising; Americans are far more religious and patriotic than the citizens of any other liberal democracy and, as Tocqueville noted, our religions are “democratic and republican.” (Scholars disagree about whether American religiosity is waning.
⁶⁴
) This helps to explain why even secular political movements like civil rights, international human rights, unionization, and feminism often invoke religious themes.
⁶⁵
The infusion of such moral energy
invigorates American politics and shapes our public policies, both domestic and foreign, in many profound ways.