Why Government Fails So Often: And How It Can Do Better (20 page)

PUBLIC OPINION

In 1922, journalist Walter Lippman wrote an influential reflection on the emergence of public opinion as the most powerful force in politics.
⁸⁵
His analysis was prescient, but he could not possibly have anticipated the explosion of media through which public opinion is now both influenced and expressed, nor could he have predicted the far higher level of education and sophistication about public affairs that exists today.

As discussed in
chapter 3
, the policy-making process is a complex and protracted one, replete with opportunities for public participation, especially that mediated by interest advocacy groups. Public opinion is more powerful today not only because of the much-noted
instantaneous, real-time news cycle facilitated by new technologies but also because the gap between the education level of the citizenry and policy makers—and the greater deference to the latter that this gap once commanded—has shrunk. For these and other reasons, public opinion exercises more control over decision makers in the United States than in Europe. Although public opinion in the United States and in, say, France on a number of controversial issues—capital punishment and abortion, for example—is similar, U.S. policies seem to cleave more closely to public opinion than French policies do. Our government’s greater responsiveness to public opinion may reflect its more limited powers compared to those of governments in European parliamentary systems (especially France’s).
*
Coupled with the power of new technologies to cheaply and quickly mobilize opinion to pressure politicians on hot-button issues, this heightened responsiveness means greater caution and volatility in policy making, which in turn reduces the credibility of particular policies, as discussed in
chapter 5
.

CIVIL SOCIETY

Civil society refers to the vast, extraordinarily diverse array of private entities—both nonprofit and for-profit—that stand between the government and individuals. (It may stand outside of government proper, but a key part of it, nonprofit organizations, is highly dependent on the public fisc for its funding; one-third of all nonprofit dollars come from government grants or contracts, with grants nearly tripling in real terms in the last quarter century.
⁸⁶
It is also the domain in which almost all people conduct the most important activities and cultivate their most meaningful relationships of trust and cooperation—what Robert Putnam and others term “social capital,”
⁸⁷
and what Nancy Rosenblum calls the “democracy of everyday life.”
⁸⁸
This is particularly true in a liberal democratic nation like the United States, which
as we have seen emphasizes individualism, voluntary associations, and limited government.
*
(Because I discuss private interest groups and markets—both central elements of both civil society and politics—in
chapter 7
, I do not consider them further here.)

Consider religion.
⁸⁹
Surrounding and shaping America’s political and popular cultures is a remarkably strong religious tradition and an inventive though sometimes repellent popular culture of religiosity. The relationship between religion and both popular and political culture is a complex and generative, socially beneficial one on the whole. Although measures and estimates of American religiosity vary, no scholar disputes the fact that we are much more deeply involved with religion than are Europeans. Church leaders and their flocks have led almost all of the great reformist causes in American history: abolition, women’s suffrage, temperance, civil rights, opposition to unpopular wars, environmentalism, and “choice” and “life” forces in the abortion debate. Some mainstream religious groups tend to support liberal candidates and policies. Many others now support conservative presidential candidates, but this is only a recent development. Moreover, these conservative groups are divided politically by quarrels over abortion, gay rights, stem cell research, foreign policy, and many other issues. One reason for this pronounced religiosity is that creating and sustaining churches was never in the hands of the federal government and only briefly in those of the first states; instead, religious development was promoted by spiritual entrepreneurs engaged in competitive marketing, vigorous proselytizing, and doctrinal and liturgical innovations. Immigration, moreover, has fortified this religious commitment throughout American history.

Private philanthropic giving from and to nonprofit groups—to secular as well as religious causes—is unmatched anywhere in the world not just in absolute terms but also as a share of income and
wealth.
⁹⁰
Private charity, operating with varying financial and other relationships with the government, including strong tax incentives to donors, supports a vast array of civil society organizations—schools, universities, hospitals, nursing homes, child welfare agencies, ethnic advocacy groups, amateur sports, museums and the arts, and a host of others—that provide diverse social services to the needy and other members of the public. Local, regional, and national voluntary associations form constantly to pursue a bewildering variety of private and public interests, providing many more avenues for citizen participation in larger collective endeavors.

Civil society groups play an immense role in the implementation of government programs, performing many of the social functions that in Europe are largely reserved for government. These organizations are in a mutually dependent relationship with government. On the one hand, government depends on them for much policy implementation, yet they often stress religious and other values that a liberal government may not want to promote officially or is constitutionally barred from supporting. This often causes significant conflicts affecting (and often limiting) policy effectiveness. In 2012, for example, a serious crisis, with constitutional litigation in its train, arose when Catholic hospitals refused to implement the Affordable Care Act’s mandate of full coverage of contraception services.
⁹¹
Other clashes arise over religiously sponsored child welfare agencies that challenge public policies imposing requirements that reflect more secular moral ideologies.
⁹²
On the other hand, these groups have become financially dependent on the federal contracts. Organizations like Planned Parenthood, AARP, the Urban League, and La Raza receive large sums from Washington; more than half of Catholic Charities’ budget comes from there. Not surprisingly, such groups are now major advocates for expanded programs.
⁹³

The remarkable achievements of the ubiquitous nonprofit sector, and the public’s relatively high degree of confidence in it, have prompted policy makers to initiate a large number of programs seeking to draw on the distinct advantages of both public authority and private incentives and innovation. These public-private partnerships
operate in many different fields, including housing and community development, scientific research, environmental protection, the integration of immigrants, public safety, and many areas of regulatory policy.

The results of such collaborations, however, are not always benign, particularly in the area of social services. Government programs funded by taxes can “crowd out” nonprofit providers that must rely on private donations, and may also alter the nature of the interactions and relationships between providers and clients, substituting more bureaucratic, rule-bound, and morally ambiguous service modalities for those that more religion-inflected private agencies provide.
⁹⁴
This crowding out phenomenon is discussed more extensively in
chapter 7
.

*
I put to one side, and have discussed elsewhere, other cultural factors—for example, demography and patriotism—that are highly relevant to policy making and distinguish the United States from other modern liberal democracies in degree if not in kind. See Peter H. Schuck & James Q. Wilson, “Looking Back,” in Schuck & Wilson, eds.,
Understanding America: The Anatomy of an Exceptional Nation
, (2008), 627–43.

*
This power allocation principle is widely accepted in Europe under the rubric of “subsidiarity,” which is also a norm of Catholic teaching.

*
Ironically, according to recent research, “welfare rights” language was first deployed not by advocacy groups but by public agencies in the 1930s to justify expanded federal administrative responsibility for the poor. See Karen M. Tani, “Welfare and Rights before the Movement: Rights as a Language of the State,”
Yale Law Journal
122 (2012), 314.

*
A major exception is the Supreme Court of India, which entertains “public interest litigation” in which that court has required bureaucracies and legislatures to take actions that even activist American courts would not be so bold as to order. For some examples, see Peter H. Schuck, “Fixer-Upper,”
American Lawyer
, December 2011, 78.

*
Paul Starr perceives one such force, “the rise of politically oriented ‘issue generalists’ on the liberal side.” See Starr, “Politics in the Orbit of Money” (book review),
New Republic
, September 13, 2012, 28, 31.

*
There are exceptions. For example, in situations where interconnectivity and network externalities are significant (i.e., where an activity’s value to individual participants increases geometrically as the number of participants increases, as with a telephone or computer network), market competition offering different service or connectivity standards may be less efficient than having the government mandate uniform standards. Adverse selection in insurance is another diversity-related impediment to market efficiency, one that has played a central role in the debate over the Affordable Care Act’s insurance mandate and subsidies.

*
During the 2000 election campaign, for example, the Democrats were able to cite the inability of state programs to attract insurers into the market for prescription drug coverage for the elderly as evidence that could be used to discredit Republican proposals to extend that approach to the nation as a whole. This debate strongly affected the approach taken by the Affordable Care Act of 2011. Another example occurred in the aftermath of the 2000 election itself, when the failure of Florida’s electoral machinery and the likelihood of similar failures in other states spawned a political groundswell in support of national legislation in hopes of remedying the problem. In the event, that legislation has proved quite ineffective.

*
The term
entitlement
is something of a misnomer, as Congress can always alter or abolish them. See
Flemming v. Nestor
, 363 U.S. 603 (1960).

*
An apparent exception is the Senate’s rejection of gun purchase background checks in April 2013—checks that the overwhelming majority of Americans seem to favor. This may say more about the nonmajoritarian nature of Senate representation and cloture rules and the unusual power of the gun lobby than about U.S. politics in general.

*
Perhaps the most striking, and disturbing, aspect of American life is that its civil society is extraordinarily robust in every respect—
except the most important one, the family
. This, of course, is no small exception. On the state of the American family, see Linda J. Waite & Melissa J. K. Howe, “The Family,” in Peter H. Schuck & James Q. Wilson, eds.,
Understanding America: The Anatomy of an Exceptional Nation
(2008), chap. 11.

PART 2

The Structural Sources of Policy Failure

CHAPTER 5

Incentives and Collective Irrationality

D
iscussion of the quality and effectiveness of government activity often emphasizes budgetary factors. When programs fail, the argument goes, it is usually because a good policy was not adequately funded. Doubtless this is sometimes true, but more typically the real causes lie elsewhere—and far deeper.

Policy success depends, at a minimum, on six attributes of a policy that have little or nothing to do with its budget. First,
incentives
must be capable of eliciting the desired behaviors both of the policy makers and of the actors they must influence in order for the policy to work. Second, the policy makers must be
rational
in selecting appropriate instruments for policy implementation. Third, the
information
on which policy makers rely must be accurate, unbiased, and up to date. Fourth, programs must be
adaptable
to the dynamic environments in which they will operate, overcoming the strong inertial forces endemic to political decision making. Fifth, the policy must be
credible
to those who must be induced to invest their own resources for it to succeed. Finally, programs must be
managed
well enough to avoid, at a minimum, the unholy trinity of fraud, waste, and abuse. Some of the relatively successful programs discussed in
chapter 11
exhibit many of these attributes.

For deeply structural reasons, all six of these features are in shorter supply in government than budget is. To show why, I contrast government with markets that, for all their well-known imperfections,
earn high marks for incentives, rationality, information generation, adaptability, credibility, and management. In contrasting government and markets, I emphatically am
not
making a general claim that markets should substitute for government programs. (One could only advance and defend such a claim based on empirical and normative analyses of particular cases.) Rather, I mean to use the features of well-functioning markets to highlight the systemic conditions that doom so many government policies to failure.
*