Why Government Fails So Often: And How It Can Do Better (6 page)

A ROAD MAP OF THE BOOK

This book consists of thirteen chapters, divided into three parts.
Part 1
(
chapters 2
–
4
) provides the context in which policy making occurs.
Part 2
(
chapters 5
–
11
) constitutes the book’s core, presenting an immense body of empirical findings on the effectiveness of an extraordinarily broad range of federal domestic policies. Each chapter analyzes a discrete cluster of endemic sources of government failure that are deep, structural, and systemic. As such, these problems cannot
easily be remedied but they can be mitigated.
Part 3
(
chapters 12
–
13
) explains how this might be done. Because these sources of failure are multiple, interrelated, and often occur simultaneously, the topics treated in
part 2
’s chapters are not as analytically discrete as the chapter titles might suggest. They inevitably overlap to a degree, and even my many cross-references to other chapters cannot completely alert this fact to the reader.

Part 1

Chapter 2
presents the methodology of policy assessment. It addresses questions on which any analysis of governmental effectiveness must turn: how should we define failure and success, with what bases of comparison in mind, and how can we assess the performance of particular programs in light of those criteria? Because no crisp, wholly satisfactory answers to these questions are possible, I suggest a number of approaches that converge enough to support the book’s hypotheses about why government fails so often.

Chapter 3
provides the necessary background on how public policy making works. It is divided into five parts: (1) the different
functions
—some indispensable, most matters of policy discretion—that the government performs; (2) the
processes
of policy formulation; (3) the
missions
that agencies are assigned to perform; (4) the diverse
instruments
that can be deployed in pursuing these missions; and (5) the most important
institutions and practices
that constrain government performance. Readers who already possess a sophisticated knowledge of political economy and of how policy making works may want to skip this chapter—although it emphasizes aspects of policy making that even the cognoscenti may overlook.

Chapter 4
probes the unique political culture in which our policymaking system is embedded. It focuses on ten elements of this culture: (1) constitutionalism; (2) decentralization; (3) protection of individual rights; (4) interest group pluralism; (5) tolerance for inequality; (6) religion and political moralism; (7) social diversity; (8) populism; (9) public opinion; and (10) civil society. These values and attitudes animate and constrain policy makers at every turn.

Part 2

Chapters 5
and
6
analyze the most fundamental characteristics that shape the substance of public policy, afflict its performance, and distinguish it in kind or in degree from most private decision making.
Chapter 5
explores two of these characteristics: the incentives of policy makers and of private actors who policies affect (including policy-induced moral hazard), and the irrational aspects of policy makers’ decisions.
Chapter 6
considers four others: (1) information deficiencies; (2) the inflexibility of the policy system; (3) its credibility problem with those whose cooperation is necessary for success; and (4) mismanagement encouraging fraud, waste, abuse, and related conduct.

Chapter 7
, as already noted, focuses on how markets affect policy performance. It is long, as befits the importance of the topic. I show that the powerful incentives, logic, hydraulics, and political influences of markets are difficult to control and tend to undermine the effectiveness of many public policies, including those explicitly designed to correct market failures. Although market-savvy Cassandras often predict policies’ ineffectiveness, their warnings, like those of their classical namesakes, usually go unheeded until it is too late and the policy misfires. After showing how markets compete with government for participants, administrative talent, and performance, I discuss nine reasons why markets tend to confound the effectiveness of policies that seek to perfect them: (1) speed; (2) diversity; (3) informational demands; (4) price and substitution effects; (5) transjurisdictional effects; (6) political influence; (7) obstacles to policy enforcement; (8) “informal” markets; and (9) the lack of good substitutes for market-based ordering. (Two other reasons, moral hazard and black markets, are discussed in
chapters 5
and
7
, respectively.) In the chapter’s final section, I explain how innovative policy makers have sought to exploit market forces for policy purposes (especially environmental protection) rather than trying to subdue them. While I generally support this innovative approach, I show how it too is hobbled by implacable market forces.

Chapter 8
analyzes the problem of policy implementation—the obstacles that invariably litter the path between policy design and real-world outcomes. Policy makers can and often do try to anticipate these implementation problems, but their efforts almost always fall short—and for identifiable, predictable reasons. These reasons may include a flawed social or causal theory, faulty program design, naïveté or ignorance about the force of the relevant market(s), political-bureaucratic impediments, and a host of other unforeseen, often inchoate developments including Murphy’s Law (“anything that can go wrong will go wrong”). Given the indeterminacy of precisely which factors cause which particular policy failures, I use the term
implementation
to refer to any or all of them. After using a particularly well-documented example—the Oakland Project—to illustrate how these factors interact to produce policy failure, the chapter reviews the empirical evidence on the effects of a large number of specific programs across a broad range of public policy domains. I organize this large body of evidence around six broad categories of policy goals directed at markets: (1) perfecting them; (2) eliminating them; (3) redirecting them; (4) midwifing them; and (5) mobilizing them for regulatory purposes.

Chapter 9 is concerned with law—the vocabulary and grammar in which almost all public policies (except for the policy of inaction) are expressed—and particularly with its inherent limits. I focus on six of these limits: (1) law’s ubiquity; (2) the inescapable trade-offs between simplicity and complexity; (3) its linguistic ambiguity; (4) the discretion necessary for it to function; (5) its costly procedural apparatus; and (6) its inertia. These inherent limits, I suggest, preordain much of the government’s failure.

Chapter 10
discusses the growing pathologies of the civil service bureaucracy that, depending on the policy instrument being used, typically implements the policy at the governmental end and monitors and enforces it when the private sector acts on it.

Chapter 11
is about policy success. Given the dismaying portrait of endemic government failure that I paint in the earlier chapters, it is reassuring to know that some programs have been relatively
successful. I discuss some of the most important ones, and analyze what conditions, systemic and otherwise, seem to account for their success.

Part 3

Chapter 12 advances a guardedly optimistic reform agenda, discussing three approaches to reform. Two of them—policies to promote cultural change that might in turn produce better outcomes, and changes at the most basic level of constitutional design—are almost certainly nonstarters, but I take them (especially the latter) seriously. This prediction reflects my sense of political reality, my respect for the remorseless law of unintended consequences,
⁹¹
and my conviction that cautious, carefully tested reforms often produce better outcomes than more radical ones do. Accordingly, I devote most of the chapter to a third, far more promising approach—cross-cutting reforms that seek to reduce the dysfunctional aspects of the policy systems diagnosed in
part 2
. I illustrate these reforms by imagining how they might improve some specific programs that are now failing us.

Chapter 12’s proposed reforms will strike some readers as merely incremental. This incrementalism will disappoint more radical reformers who deride it as both unimaginative and not going to the root of the problems. I nevertheless defend incrementalism there as a wise, honorable, efficacious, and profoundly moral concession to our cognitive limitations, our complex social systems, and our diverse views of what constitutes good policy.
⁹²

Ironies abound in the struggle between incrementalists and more audacious reformers. Small, cautious changes, for example, sometimes cumulate over time into far-reaching reform, as with food stamps, which grew from a small temporary program in the 1930s to one serving nearly 45 million low-income Americans today (see
chapter 11
). At the other, root-and-branch end of the policy spectrum, relatively comprehensive reforms often come a cropper, which fuels disillusionment and may even discredit the progressive project. Thus, campaign finance regulation, which its advocates claimed
would “take the money out of politics,” has done pretty much the opposite and fueled fury at the Supreme Court’s protection of core political speech (see
chapter 7
). In such cases, disappointed reformers will often insist that a more radical reform would have worked—a counterfactual that, conveniently for them, can be neither proved nor refuted. Finally, opposition to modest gains may doom reform altogether. For instance, president Richard Nixon’s family assistance plan, which liberals rejected as inadequate, would have installed their long-sought principle of income guarantees for the poor, thus opening the door to future expansion.

Chapter 13 sums up, presenting the major themes that emerge from the analysis. All Americans have a strong stake in understanding why government’s failures are so endemic, and what might be done to improve matters. For liberals, poor performance both discredits activist government and swallows up the precious resources needed to sustain and extend it. Once conservatives accept that an activist state is here to stay, they can focus on improving programs’ effectiveness, not just quixotically demand wholesale repeal. Centrists must learn enough about the true causes of failure to propose moderate solutions. If we do not do so—and soon—our great experiment in self-government may itself come to be seen as a failure. In an era of fiscal cliffs, pallid enforcement, special-interest pandering, and growing public disgust with politicians, this warning is not hyperbole.

For better
and
for worse—and it
is
both—we are largely stuck with the government that we’ve got along with many of the cultural legacies, institutions, processes, and values that have shaped and inspirited it for two and a quarter centuries. Reform is both essential and within our reach. But more radical transformation—if it be desirable, which is harder to predict, the more radical it is—must await a new political dispensation whose contours are not yet visible and whose consequences are thus even more speculative.

Finally, a few words about my own bona fides. I am a political independent, a self-styled militant moderate who has always voted for Democrats for president (except for a protest vote in 1968).
⁹³
I served as a former policy planning official in the Department of

Health, Education, and Welfare during the administration of president Jimmy Carter, and am as committed to social progress (properly defined and suitably pursued) as the most interventionist reformer. I support many public programs, and as a citizen I take no pleasure (indeed, I am dismayed) in finding how often my government fails, as I dutifully report in the chapters that follow. I do take heart from the important successes to be discussed in
chapter 11
but, regrettably, they are too few and far between. However, they can help us understand the reasons for the far more numerous failures.

*
A
policy
is a statement of goals; a
program
is an instrument for implementing a policy. Generally, I use the terms interchangeably. Policy makers are those who design, adopt, and implement policies. Again, I shall use the generic term except where it seems important to distinguish among them.

*
The main exceptions are one-off existential situations in which goals are clear and normal politics is largely suspended (as was the case in World War II), and the relatively few but important domestic program successes discussed in
chapter 11
.

†
Brookings Institution economist Scott Winship shows that growing inequality is a doubtful explanation. See Winship, “How Much Do Americans Care about Income Inequality?” April 30, 2013,
http://www.brookings.edu/research/opinions/2013/04/30-income-inequality-winship
; and Scott Winship, “How Much Do Americans Care about Income Inequality? Part II,” May 15, 2013,
http://www.brookings.edu/research/opinions/2013/05/15-do-americans-care-about-inequality-winship
.

*
Former congressman Barney Frank reportedly once told a group of complaining constituents, “We politicians are not great shakes, but you voters are not a day at the beach either.” Such candor is as rare as it is true. Most politicians flatter the voters, as when, in 1974, then presidenial candidate Jimmy Carter called for “a government as good as its people.” Our framers had no such illusions, placing their faith not in individual virtue but in institutional arrangements. As James Madison wrote in “Federalist No. 51”: “If men were angels, no government would be necessary…. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.”