So here we are in the final week and back to Peters for his final chapter. In this edition, Peters combines cost-benefit and ethical analysis into a single chapter. While I generally prefer to discuss these two issues separately, I think the combined chapter works for the purposes of this class. This chapter helps serve as a teaser for two 400-level courses we offer (or will be offering) as part of the Public Service and Public Policy major. PAF 471: Public Policy Analysis will be a required course for the public policy concentration and will likely focus on economic models of policy analysis, specifically cost-benefit analysis and quantitative analysis. PAF 460: Public Service Ethics is our required ethics course and will help you navigate current ethical issues in public policy, public administration, and the non-profit sectors. I hope that this chapter sparked your excitement for these courses.
There are other reasons why it may make sense to combine these two chapters. In some ways, cost-benefit analysis can be thought of as a specific type of consequentialist ethics. Consequentialism is just a fancy way of saying "the ends justify the means". Of course, this form of ethics can lead to many actions that we would consider unethical, but it is often used in public policy creation. Basically, cost-benefit analysis is attempting to reach a Pareto Optimal outcome, where no one is made worse off but at least one person is made better off, or a Kaldor-Hicks outcome where society experiences a net-gain. In this case, the ends and the means are quantified so that the ends justify the means if the outcome is a net monetary benefit. Of course, opportunity costs, consumer surpluses, unintended consequences, and net values need to be considered in the calculation you use to determine the costs and benefits. I think Peters does a good job of walking you through these concepts using a basic example of cost-benefit analysis. It is important to note that although we rarely use Pareto Optimality as a goal in policy analysis (because it is usually an impossible standard to meet) it likely works much better as a criterion for ethical analysis. Certainly, ensuring that no one is made worse off by government action is a stronger ethical stance than assuming that the individuals who benefit from government action will somehow compensate those who are burdened by government action.
As Peters points out there are many problems associated with the use of cost-benefit analysis. It requires a lot of assumptions about risk and future circumstances. Small changes in those assumptions can drastically change the predicted net benefit of a program. In a policy world where solutions are often looking for problems, interest groups have substantial power, policymakers are politically motivated, and competition for funds is the primary rule of the game the temptation to make favorable assumptions about the future of one's preferred project is overwhelming. I believe the perception that cost-benefit analysis is preferable to other forms of analysis because it is straightforward is really an incorrect perception. Cost-benefit analysis can be just as subjective as ethical analysis.
Further, while cost-benefit analysis can help us choose projects out of a list, it offers very little normative advice. It cannot answer the question "what should government do?" We have to draw on our cultural and social values for that. Peters' discussion of "ethical analysis" is really about these value questions. After Stone, his recommendations likely seem a little quaint but they are as follows: the preservation of life, the preservation of individual autonomy, truthfulness, fairness, and deservedness. In many ways these parallel with Stone's values of security, liberty, and equity with truthfulness added for good measure. Of course as we saw with Stone, actually defining what these values mean and whose definition we should use is the difficult part.
I agree with Peters assessment that we as policy analysts are over-reliant on cost-benefit analysis because of its apparent objectivity in comparison to ethical analysis. Policymakers are a different story. Some policymakers have become little more than rubber stamps for programs with positive cost-benefit analysis, but currently values seem to be the prominent metric determining whether or not policies proceed through the policy process we discussed during the first few weeks of class. Many of the policies Congress is considering are policies that invoke those tough ethical questions such as Don't Ask, Don't Tell; defunding Planned Parenthood, immigration policies, and even the debate over the deficit. Cost-benefit analyses have played very little role in these debates. This leads me to two questions: Would we be better off if policymakers used the cost-benefit analyses provided by policy analysts rather than relying on their own definitions of values, and what is the state of the policy analyst profession if their primary means of analysis is often ignored by policymakers?
Showing posts with label Efficiency. Show all posts
Showing posts with label Efficiency. Show all posts
Thursday, December 1, 2011
Tuesday, October 11, 2011
Defense Policy
As I mentioned on twitter, the substantive readings for the week combine a lot of policy issues that have been "hot topics" over the past few years. Although I like Peters' reasoning for combining defense policy and law enforcement into one chapter, I think it makes sense for me to talk about them separately. I know a little more about law enforcement and criminal justice policy than defense policy, but I think that I can pull together our readings from Stone and some of the current issues in defense policy to help you think about this policy arena.
I think that even the most libertarian-minded individuals would agree that the basis of the social contract is that government should provide for the people's defense. Civil defense is a classic example of a collective good, for which the market cannot provide. For all those except the most extreme pacifists, the idea that government should provide for the protection of its citizens is not under dispute. The questions of how and to what degree remain.
For the past two weeks, we have been reading about policy goals. From Stone, we have learned that they are often subjective and vaguely defined. Security, liberty, and efficiency are often discussed as rationales for our defense policies. Most Americans would agree that our military should protect us from current and future harms in the most efficient way possible, but does that mean that we should allow pre-emptive strikes and water-boarding to ensure our safety? What about assassinations? Should we grant citizens, non-citizens, guerilla forces, and opposing military forces the same protections or do certain groups deserve more protections than others? I think the chapters in Stone about policy goals can help us think about all of these issues.
I want to take a moment to address one issue in particular, in the context of Stone. Peters discusses the all-volunteer army and military procurement as two of the problems currently facing defense policy. We have decided that contracting out not only the creation of new weapons and strategies, but also the carrying out of on-the-ground security, as the most efficient way to fight our wars in Afghanistan and Iraq. Like the library analogy, however, we have to ask "efficient at what and for whom?" If our ultimate goal is to engage in many conflicts in a variety of so-called "theaters" then contracting out security, language, and logistics while enlisted men and women focus on combat may be the most efficient way to allocate responsibility. On the other hand, if you are concerned with a military that is more responsive to commands then contracting out services seems less efficient. If our ultimate goal is to avoid conflict whenever possible, requiring the military to carry-out all services on the ground would be the most efficient way to achieve that goal. (After all, it would require us to either reduce our conflicts to what a volunteer military can handle or institute a draft). If our goal in any individual conflict is to win at any cost, then we might consider contracting out even more services. If our goal is to win the hearts and minds of the people in the countries where our conflict takes place it may be more efficient for military personnel to be conducting fewer combat operations and more humanitarian missions and to contract out more of the security and combat duties. Some of these options may not be legal or ethical, but to say that contracting is efficient suggests an objective understanding of efficiency.
Of course, the contracting out of defense services also brings up real questions of equity. If soldiers in the military are the ones tasked with the most dangerous jobs, is it fair that military contractors far out-earn them? You may say yes if you are most concerned with process, assuming that everyone has the opportunity to either become a contractor or a soldier, because it is only the most experienced professional soldiers who will earn the higher paying contract jobs. On the other hand, you may consider that the military is more likely to recruit historically disenfranchised groups, while the contractors tend to recruit professionals. If this is how you think about the issue, then paying more to contractors is highly inequitable.
You could also think about the structural harms that contracting out may impose on the survival of our military. By incentivizing career military employees to transition to a higher paying contractor job, the reliance on contracted service may reduce the degree of expertise present in our military. Because contractors are not required to remain at their posts in dangerous circumstances, contracting out may reduce troop morale and community trust.
These are just some examples of how we can use Stone's perspective to understand one hot-topic under debate in the defense policy arena. I think the most important take-away here is that there is not one-single objective answer to the question of whether contracting out military services is equitable, efficient, or harm-inducing. Instead, we are arguing and debating our points based on our subjective understandings of each of these concepts.
I think that even the most libertarian-minded individuals would agree that the basis of the social contract is that government should provide for the people's defense. Civil defense is a classic example of a collective good, for which the market cannot provide. For all those except the most extreme pacifists, the idea that government should provide for the protection of its citizens is not under dispute. The questions of how and to what degree remain.
For the past two weeks, we have been reading about policy goals. From Stone, we have learned that they are often subjective and vaguely defined. Security, liberty, and efficiency are often discussed as rationales for our defense policies. Most Americans would agree that our military should protect us from current and future harms in the most efficient way possible, but does that mean that we should allow pre-emptive strikes and water-boarding to ensure our safety? What about assassinations? Should we grant citizens, non-citizens, guerilla forces, and opposing military forces the same protections or do certain groups deserve more protections than others? I think the chapters in Stone about policy goals can help us think about all of these issues.
I want to take a moment to address one issue in particular, in the context of Stone. Peters discusses the all-volunteer army and military procurement as two of the problems currently facing defense policy. We have decided that contracting out not only the creation of new weapons and strategies, but also the carrying out of on-the-ground security, as the most efficient way to fight our wars in Afghanistan and Iraq. Like the library analogy, however, we have to ask "efficient at what and for whom?" If our ultimate goal is to engage in many conflicts in a variety of so-called "theaters" then contracting out security, language, and logistics while enlisted men and women focus on combat may be the most efficient way to allocate responsibility. On the other hand, if you are concerned with a military that is more responsive to commands then contracting out services seems less efficient. If our ultimate goal is to avoid conflict whenever possible, requiring the military to carry-out all services on the ground would be the most efficient way to achieve that goal. (After all, it would require us to either reduce our conflicts to what a volunteer military can handle or institute a draft). If our goal in any individual conflict is to win at any cost, then we might consider contracting out even more services. If our goal is to win the hearts and minds of the people in the countries where our conflict takes place it may be more efficient for military personnel to be conducting fewer combat operations and more humanitarian missions and to contract out more of the security and combat duties. Some of these options may not be legal or ethical, but to say that contracting is efficient suggests an objective understanding of efficiency.
Of course, the contracting out of defense services also brings up real questions of equity. If soldiers in the military are the ones tasked with the most dangerous jobs, is it fair that military contractors far out-earn them? You may say yes if you are most concerned with process, assuming that everyone has the opportunity to either become a contractor or a soldier, because it is only the most experienced professional soldiers who will earn the higher paying contract jobs. On the other hand, you may consider that the military is more likely to recruit historically disenfranchised groups, while the contractors tend to recruit professionals. If this is how you think about the issue, then paying more to contractors is highly inequitable.
You could also think about the structural harms that contracting out may impose on the survival of our military. By incentivizing career military employees to transition to a higher paying contractor job, the reliance on contracted service may reduce the degree of expertise present in our military. Because contractors are not required to remain at their posts in dangerous circumstances, contracting out may reduce troop morale and community trust.
These are just some examples of how we can use Stone's perspective to understand one hot-topic under debate in the defense policy arena. I think the most important take-away here is that there is not one-single objective answer to the question of whether contracting out military services is equitable, efficient, or harm-inducing. Instead, we are arguing and debating our points based on our subjective understandings of each of these concepts.
Free to be You and Me - My Thoughts on Stone Ch. 5 - Liberty
Liberty is probably the central American value. Freedom is an inherent aspect of the American Revolution and an important part of the American story. We are fairly certain that we know what we mean when we say liberty or freedom, but when we take such a grand ideal and operationalize it into policy action, it is just as complex as all of the other values. In the United States, we tend to focus on negative liberty or freedom from restraint. This is the idea behind our Bill of Rights. Government cannot restrict your ability to practice religion as you choose or to speak your mind. We could also take the lead of some European countries and define liberty as positive rights or rights to the prerequisites of freedom. A right to health care would be one such right, as would the right to a basic living wage. The right to a basic education and the right to emergency medical care are two such positive forms of liberty that we practice in America, but negative liberty is still dominant in the United States.
Stone asks two important questions about liberty on p. 109. "When, if ever should community or social purpose be allowed to trump individual choice? Under what circumstances should public policy ever limit individual privacy and autonomy?" Many political theorists would turn to the work of John Stuart Mill to answer these questions, as does Stone. Mill's On Liberty argues that society can only restrict an individual's liberty if it causes harm to others. This brings to mind the "fist-swinging" analogy. I can swing my fist around in the air as much as I want as long as you are not close enough that I would hit you.
This can be considered the standard of bodily harm. It sounds like a simple standard to uphold, but as you know by now, nothing is ever simple in the polis. There are bodily harms that affect some people more than others, for example air pollution affects asthmatics, young children, and the elderly more than the general population. There are bodily harms that accumulate over time, for example exposure to small doses of toxic chemicals may not be hazardous in the short-term but may cause cancer in the long-term. There are indirect bodily harms, for example a budget crisis could lead to a lay-off of air traffic controllers, which could cause the remaining controllers to be overworked, which could lead one to falling asleep on the job, which could lead to an accident. We then must also ask the question, which action should we take to prevent these harms. Do we keep asthmatic children inside for recess on bad air quality days, regulate air pollution, or both? Both of these solutions restrict someone's liberty. The problem of bodily harm is rarely ever the simple issue of one person intentionally causing an immediate harm to another.
Of course, if you think about our criminal justice policies, causing bodily harm is not the only standard of harm that we use as an excuse to restrict liberty. We are also not allowed to inflict material harms on others. We cannot take our neighbor's new big screen television, even if they are on vacation, it is not being used and there is no way we would inflict any bodily harm on them. This would not only be illegal but it violates the norms and values of society.
Stone discusses two types of material harm on page 112: harm that destroys property and harm that destroys the market value of property. The latter reminds me of proposition 2, which Phoenix residents rejected in the last local election. The brief summary of the proposition is that it would have allowed the re-zoning of a plot of land so that a gas station could be built on a vacant lot in East Phoenix. Neighborhood residents opposed the station because they argued that it would bring crime to the area. In other words, it would indirectly harm them. While it does seem like a bizarre issue to bring to referendum, it seems like a perfect issue to discuss in this context.
Residents of the neighborhood could also have argued that the gas station would have amenity effects. They could have said that the 24 hour gas station would make the neighborhood less pleasing because the lights will be on all of the time and it will bring late night traffic to the area. Certainly, a gas station is not aesthetically pleasing. It could have also been argued that a gas station is more aesthetically pleasing than a vacant lot. Of course as Stone points out, now that we are dealing with harms that are not physical we are engaging in argument, debate, and claims-making.
The most abstract harms are emotional, psychological, moral and spiritual harms. Many of these harms would not have been recognized 50 years ago. Should we restrict an individual's liberty because it causes stress to another individual or group of individuals? What if it violates the religious or spiritual beliefs of another individual? Should a pharmacist be able to refuse to fill birth control prescriptions because it's against his or her religious beliefs? Should a group Muslims be able to build an Arabic cultural center a few blocks from Ground Zero? Should Westboro Baptist Church be able to protest the funerals of soldiers killed in battle? Although emotional, psychological, religious, and spiritual harms are relatively new issues, they have certainly been hot policy topics over the past few years. Of course, if we granted protections based on these harms, we would likely be harming others; specifically women seeking birth control, the Muslim community, and the families and friends of military heroes. We must find the delicate balance here.
Of course, in the polis we also have harms and liberties related to community. Mill argued that there are some community duties that individuals can be compelled to perform. We often restrict the liberty of individuals for the good of the social order. Citizens have to pay taxes, serve on juries, and obey the laws. In America, all males 18 and older have to register for the draft. Structural harms are a community harm that affects the ability of a community to successfully function. Stone uses the example of school vouchers as a structural harm because it reduces integration and the visibility of the public education system. Another structural harm could be google books because it reduces the use of the library by relatively well-off citizens and makes the library less important as a community meeting place. Of course, in both of these cases, removing the structural harm would likely cause individual harms. Accumulative harms are actions that are not harmful in isolation but become harmful when everyone in a community does them. The individual mandate in the Affordable Care Act is based on this logic. If one healthy person does not buy insurance then it won't raise premiums by much, but if every healthy person does not buy insurance than premiums will sky-rocket and the health insurance industry will go broke. Finally, we can extend individual harms to examine their effects on the community. Remember, in the polis all actions have ripple effects. Here again, we must strike a delicate balance.
Stone firmly believes that we cannot restrict our understanding of harm and liberty to the individual. Corporate actors including businesses, churches, non-profits, and government agencies can harm people and be harmed. Further, because they generally have a much larger reach than an individual, the harms they cause can have a greater impact on the community as a whole.
Once again, Stone ends her chapter with a discussion of trade-offs. This time we have two: liberty and security, and liberty and equity. Starting with liberty and security, Stone presents the traditional or conservative understanding of the relationship between the two: security creates dependence, self-sufficiency is necessary for liberty, and government paternalism reduces freedom. She then presents her understanding: individuals cannot make free choices unless they have basic security, no one is ever truly self-sufficient, and policy can make determinations about who is competent to care for him or herself and who is not. The liberty and equality trade-off is presented similarly. The traditional or conservative understanding is that redistribution for the sake of equality reduces the liberty of the well-off, either you have complete liberty or none at all, and coercion by public policy reduces liberty. She believes that equalizing power, wealth and knowledge leads to positive liberty, liberty is measured in degrees, and society's control of some problems can expand human freedom. I am guessing that if you have not agreed with Stone's argument in the previous chapters, you will not agree this time. Either way, I hope you have taken the time to understand both arguments.
Stone asks two important questions about liberty on p. 109. "When, if ever should community or social purpose be allowed to trump individual choice? Under what circumstances should public policy ever limit individual privacy and autonomy?" Many political theorists would turn to the work of John Stuart Mill to answer these questions, as does Stone. Mill's On Liberty argues that society can only restrict an individual's liberty if it causes harm to others. This brings to mind the "fist-swinging" analogy. I can swing my fist around in the air as much as I want as long as you are not close enough that I would hit you.
This can be considered the standard of bodily harm. It sounds like a simple standard to uphold, but as you know by now, nothing is ever simple in the polis. There are bodily harms that affect some people more than others, for example air pollution affects asthmatics, young children, and the elderly more than the general population. There are bodily harms that accumulate over time, for example exposure to small doses of toxic chemicals may not be hazardous in the short-term but may cause cancer in the long-term. There are indirect bodily harms, for example a budget crisis could lead to a lay-off of air traffic controllers, which could cause the remaining controllers to be overworked, which could lead one to falling asleep on the job, which could lead to an accident. We then must also ask the question, which action should we take to prevent these harms. Do we keep asthmatic children inside for recess on bad air quality days, regulate air pollution, or both? Both of these solutions restrict someone's liberty. The problem of bodily harm is rarely ever the simple issue of one person intentionally causing an immediate harm to another.
Of course, if you think about our criminal justice policies, causing bodily harm is not the only standard of harm that we use as an excuse to restrict liberty. We are also not allowed to inflict material harms on others. We cannot take our neighbor's new big screen television, even if they are on vacation, it is not being used and there is no way we would inflict any bodily harm on them. This would not only be illegal but it violates the norms and values of society.
Stone discusses two types of material harm on page 112: harm that destroys property and harm that destroys the market value of property. The latter reminds me of proposition 2, which Phoenix residents rejected in the last local election. The brief summary of the proposition is that it would have allowed the re-zoning of a plot of land so that a gas station could be built on a vacant lot in East Phoenix. Neighborhood residents opposed the station because they argued that it would bring crime to the area. In other words, it would indirectly harm them. While it does seem like a bizarre issue to bring to referendum, it seems like a perfect issue to discuss in this context.
Residents of the neighborhood could also have argued that the gas station would have amenity effects. They could have said that the 24 hour gas station would make the neighborhood less pleasing because the lights will be on all of the time and it will bring late night traffic to the area. Certainly, a gas station is not aesthetically pleasing. It could have also been argued that a gas station is more aesthetically pleasing than a vacant lot. Of course as Stone points out, now that we are dealing with harms that are not physical we are engaging in argument, debate, and claims-making.
The most abstract harms are emotional, psychological, moral and spiritual harms. Many of these harms would not have been recognized 50 years ago. Should we restrict an individual's liberty because it causes stress to another individual or group of individuals? What if it violates the religious or spiritual beliefs of another individual? Should a pharmacist be able to refuse to fill birth control prescriptions because it's against his or her religious beliefs? Should a group Muslims be able to build an Arabic cultural center a few blocks from Ground Zero? Should Westboro Baptist Church be able to protest the funerals of soldiers killed in battle? Although emotional, psychological, religious, and spiritual harms are relatively new issues, they have certainly been hot policy topics over the past few years. Of course, if we granted protections based on these harms, we would likely be harming others; specifically women seeking birth control, the Muslim community, and the families and friends of military heroes. We must find the delicate balance here.
Of course, in the polis we also have harms and liberties related to community. Mill argued that there are some community duties that individuals can be compelled to perform. We often restrict the liberty of individuals for the good of the social order. Citizens have to pay taxes, serve on juries, and obey the laws. In America, all males 18 and older have to register for the draft. Structural harms are a community harm that affects the ability of a community to successfully function. Stone uses the example of school vouchers as a structural harm because it reduces integration and the visibility of the public education system. Another structural harm could be google books because it reduces the use of the library by relatively well-off citizens and makes the library less important as a community meeting place. Of course, in both of these cases, removing the structural harm would likely cause individual harms. Accumulative harms are actions that are not harmful in isolation but become harmful when everyone in a community does them. The individual mandate in the Affordable Care Act is based on this logic. If one healthy person does not buy insurance then it won't raise premiums by much, but if every healthy person does not buy insurance than premiums will sky-rocket and the health insurance industry will go broke. Finally, we can extend individual harms to examine their effects on the community. Remember, in the polis all actions have ripple effects. Here again, we must strike a delicate balance.
Stone firmly believes that we cannot restrict our understanding of harm and liberty to the individual. Corporate actors including businesses, churches, non-profits, and government agencies can harm people and be harmed. Further, because they generally have a much larger reach than an individual, the harms they cause can have a greater impact on the community as a whole.
Once again, Stone ends her chapter with a discussion of trade-offs. This time we have two: liberty and security, and liberty and equity. Starting with liberty and security, Stone presents the traditional or conservative understanding of the relationship between the two: security creates dependence, self-sufficiency is necessary for liberty, and government paternalism reduces freedom. She then presents her understanding: individuals cannot make free choices unless they have basic security, no one is ever truly self-sufficient, and policy can make determinations about who is competent to care for him or herself and who is not. The liberty and equality trade-off is presented similarly. The traditional or conservative understanding is that redistribution for the sake of equality reduces the liberty of the well-off, either you have complete liberty or none at all, and coercion by public policy reduces liberty. She believes that equalizing power, wealth and knowledge leads to positive liberty, liberty is measured in degrees, and society's control of some problems can expand human freedom. I am guessing that if you have not agreed with Stone's argument in the previous chapters, you will not agree this time. Either way, I hope you have taken the time to understand both arguments.
Efficient at what and for whom? - Stone Ch. 3
Since the late 1970's and early 1980's making government more efficient has been a primary goal of policymakers and administrators. Efficiency has often been treated as a goal in itself leading to the privatization and marketization of government services to avoid the inefficient bureaucratic process. As Stone points out, however, efficiency is not really a goal, it's a process-based measure that strives to get the most output out of a given input. It says nothing about an ultimate outcome. There always has to be something you want to do efficiently, or more efficiently. Again here, Stone reminds us that efficiency is comparative. The only way we can judge whether or not a process is efficient is in comparison to another process.
Stone takes some time to problematize what we think of as efficiency. She uses the story of a library from Wildavsky and Pressman's Implementation. Wildavsky and Pressman believe they have a handle on what makes a library efficient, but Stone argues that this is too simplistic. It may not just be a count of books that is important but the quality of books. It may not be the variety of books that's important as much as having a sufficient number of the most in demand books. It may in fact not be the books at all that are most important, but the services being provided by the librarians. The problem is that Pressman and Wildavsky do not really explore how they would define the ultimate goal of the library. Is it to educate residents, provide residents with entertainment, help schoolchildren learn, increase literacy, help residents with job search and skills, or all of the above? Pressman and Wildavsky define the goal of a library solely in terms of an output, the number of books they provide to the community. This comes close to using efficiency as a goal in and of itself.
When we talk about efficiency as an ideal in the United States, we are usually defining it in market-based terms. From pp. 66-71 Stone gives us a lesson in critical economics. Although we tend to elevate economics as the best of the social sciences in America, we must remember that economics makes a lot of assumptions about human behavior that are not always true. Stone believes that these assumptions generally fail when it comes to public policy and we should be relying on the model of the polis more often. Things in the polis are not as simple as they are in the market. She repeats a lot of the contrasts between the two models that she discusses in chapter one. Ultimately, she arrives at the conclusion that markets can only be considered the ultimate form of efficiency if you define efficiency objectively. As she showed us with the library example, efficiency is often subjective.
The reason I assigned chapters 2 and 4 or chapters 3 and 5 and not just any two of the four chapters is that Stone discusses trade-offs between these goals at the end of each chapter. In America, we tend to believe that equality and efficiency are trade-offs. In debates about jobs, the economy, social welfare, education, and even healthcare; we hear the argument that increasing equality will make our economy less efficient. Again, we are relying on the straightforward assumptions of neo-classical economic theory here. If we assume that individuals are motivated solely by basic needs and individual well-being then this trade-off makes sense. If we instead believe that basic security, self-esteem, and community well-being are necessary for productivity then there may not be such a straight-forward trade-off.
What do you think? Can you think of an example where efficiency is subjective? Do you think efficiency and equity are trade-offs or does some degree of equity improve efficiency?
Stone takes some time to problematize what we think of as efficiency. She uses the story of a library from Wildavsky and Pressman's Implementation. Wildavsky and Pressman believe they have a handle on what makes a library efficient, but Stone argues that this is too simplistic. It may not just be a count of books that is important but the quality of books. It may not be the variety of books that's important as much as having a sufficient number of the most in demand books. It may in fact not be the books at all that are most important, but the services being provided by the librarians. The problem is that Pressman and Wildavsky do not really explore how they would define the ultimate goal of the library. Is it to educate residents, provide residents with entertainment, help schoolchildren learn, increase literacy, help residents with job search and skills, or all of the above? Pressman and Wildavsky define the goal of a library solely in terms of an output, the number of books they provide to the community. This comes close to using efficiency as a goal in and of itself.
When we talk about efficiency as an ideal in the United States, we are usually defining it in market-based terms. From pp. 66-71 Stone gives us a lesson in critical economics. Although we tend to elevate economics as the best of the social sciences in America, we must remember that economics makes a lot of assumptions about human behavior that are not always true. Stone believes that these assumptions generally fail when it comes to public policy and we should be relying on the model of the polis more often. Things in the polis are not as simple as they are in the market. She repeats a lot of the contrasts between the two models that she discusses in chapter one. Ultimately, she arrives at the conclusion that markets can only be considered the ultimate form of efficiency if you define efficiency objectively. As she showed us with the library example, efficiency is often subjective.
The reason I assigned chapters 2 and 4 or chapters 3 and 5 and not just any two of the four chapters is that Stone discusses trade-offs between these goals at the end of each chapter. In America, we tend to believe that equality and efficiency are trade-offs. In debates about jobs, the economy, social welfare, education, and even healthcare; we hear the argument that increasing equality will make our economy less efficient. Again, we are relying on the straightforward assumptions of neo-classical economic theory here. If we assume that individuals are motivated solely by basic needs and individual well-being then this trade-off makes sense. If we instead believe that basic security, self-esteem, and community well-being are necessary for productivity then there may not be such a straight-forward trade-off.
What do you think? Can you think of an example where efficiency is subjective? Do you think efficiency and equity are trade-offs or does some degree of equity improve efficiency?
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