As we finish up the semester, I wanted to do a quick summary of what I hope you will take away from this course. It has been a pleasure reading your reflection papers and reading your comments about public policy issues. This is the first time I have taught this course online, and I certainly learned a lot; I hope you did, too.
Many people come into this class hoping to find out the "right" answer for how government can solve a problem, be it undocumented or illegal immigration, inequality in the education system, or housing the homeless. I hope that this course has taught you that the world of public policy is never so simple that a single "right" answer is easy to find. The United States, in particular, has a very complex system of government with three branches at the national level, states with at least two branches, and local governments all working alone and in concert to solve problems. Not to mention that nonprofit and for-profit organizations also play an important role in creating, advocating for, and implementing public policies. While the dream of "three-page" bills would certainly increase transparency, it seems as though our system of government is too complex to make such a goal a reality. Next time a politician suggests a simple answer to a complex problem, I hope that you will view such a suggestion skeptically.
I hope that our discussions of substantive policy issues peaked your interest, as well. Although our department does not currently have the capacity to offer classes in each of these substantive areas, there are classes in departments like sustainability, criminology, sociology, social work, and economics where you can explore these substantive areas in more depth. Further, for those of you who are planning to pursue the public service and public policy major, I hope that this gave you some ideas in terms of where you might want to do your internship and possible topics for your capstone. The CQ researcher briefs are all accessible online through the library and they provide a good starting point for understanding the "players" and major debates in each policy area. Peters' book provides a more straightforward look at the background of each of these larger policy areas. I hope you will refer back to these resources as you continue your studies of public policy.
In comparison to some of the other courses you may take in this department, this course attempts to instill more of a critical perspective in each of you. While some may see this perspective as oppositional to the more "scientific" and "objective" courses in cost-benefit, statistical, and economic analysis; I believe that both perspectives are essential to the evaluation of public policy proposals. Without this perspective, you may miss some of the underlying assumptions or as Stone would say "counting as" used in these analyses that can fundamentally alter the results of an analysis. You may also miss assumptions that can alienate or confuse policy targets. Ultimately, I hope that those of you who pursue a career in policy, administration, or politics will take your skills in economics, statistics, and critical thinking and combine them to approach each policy skeptically and then choose the policy alternative that fares the best on all three criteria.
Most of all, I hope that you take away the idea that although we may disagree with each other on these issues we can still have a civil discussion about each of them, and generally find at least some point of common ground. It seems as though our policy discourse will only become more fractured and hostile as the 2012 election approaches, and it's important to keep in mind that those who support a different candidate or take a different perspective on an issue are not our enemy. We can learn a lot more about ourselves and our opinions when we take the time to listen to and understand the other side of arguments, and why others may disagree with our own perspectives.
Thank you all for a great class and I hope you enjoy your winter break!
P.S. Don't forget to turn in your policy memos on the 11th. Make sure you refer back to the rubric from policy memo 1, as we will be using that same rubric to grade your second memos.
Monday, December 5, 2011
Thursday, December 1, 2011
The National Debt
I scheduled our discussion of the national debt for this week in the hopes that we would have a deal from the "supercommittee" (officially known as the Joint Select Committee on Deficit Reduction) to discuss. Unfortunately, they were unable to come to any agreement. Instead, I'll talk a little about the readings and then discuss the implications of the lack of a deal.
This week's reading on the national debt is one of the most up to date that we've read so far. Although the chapter was written before the "debt ceiling crisis" of the summer, it asks many of the same questions that the supercommittee has tried to reconcile over the past few months. Most notably, how can we work to reduce our large deficit without stalling or preventing an economic recovery. Of course, the supercommittee is also concerned with the political ramifications of their actions. We have had two bipartisan committees tasked with reducing the national debt, the Bowles-Simpson National Commission on Fiscal Responsibility and Reform and the Rivlin-Domenici Debt Reduction Task Force. Both of these committees were bipartisan and offered recommendations for reducing the debt as models from which the supercommittee could work (even though the Bowles-Simpson commission failed to reach the supermajority among commission members necessary to fully endorse their plan). Even with these blueprints, the committee was unable to make a recommendation for action. As the chapter points out, Americans want to balance the budget while cutting taxes and increasing spending, an impossible task. Any cuts or tax-increases would run the risk of being politically unpopular less than a year before a major national election.
When the Supercommittee was formed as part of the debt ceiling deal this summer, a system of sequestration or automatic cuts to defense, Medicare (providers only), and Social Security was created as a consequence of the supercommittee failing to pass an additional $1.5 trillion in cuts. The good news is that these cuts will not occur until FY2013, so there is still time for Congress to reach an agreement. Policymakers on both sides are already attempting to over-ride sequestration for their preferred programs, but the Obama administration has vowed to veto any such attempts. It seems as though we have reached an impasse.
So, now that the supercommittee has failed, what can we expect? The Obama administration is hoping that the full Congress can pass extensions on the payroll tax cut and extended unemployment benefits before recessing in December. The Republicans are hoping to avoid raising taxes and to make the Bush tax cuts permanent while further cutting domestic spending and fundamentally altering entitlement programs (Medicaid, Medicare, Social Security). Democratic members of the legislature are hoping to preserve Medicare, Medicaid, and Social Security while letting the Bush tax cuts on the wealthiest members of society expire. Regardless of what happens, as we saw with the debt-ceiling debate, the appearance of a "do-nothing Congress" may be the most damaging aspect of these negotiations to the economy, our democracy, and the faith-and-credit of the US government.
This week's reading on the national debt is one of the most up to date that we've read so far. Although the chapter was written before the "debt ceiling crisis" of the summer, it asks many of the same questions that the supercommittee has tried to reconcile over the past few months. Most notably, how can we work to reduce our large deficit without stalling or preventing an economic recovery. Of course, the supercommittee is also concerned with the political ramifications of their actions. We have had two bipartisan committees tasked with reducing the national debt, the Bowles-Simpson National Commission on Fiscal Responsibility and Reform and the Rivlin-Domenici Debt Reduction Task Force. Both of these committees were bipartisan and offered recommendations for reducing the debt as models from which the supercommittee could work (even though the Bowles-Simpson commission failed to reach the supermajority among commission members necessary to fully endorse their plan). Even with these blueprints, the committee was unable to make a recommendation for action. As the chapter points out, Americans want to balance the budget while cutting taxes and increasing spending, an impossible task. Any cuts or tax-increases would run the risk of being politically unpopular less than a year before a major national election.
When the Supercommittee was formed as part of the debt ceiling deal this summer, a system of sequestration or automatic cuts to defense, Medicare (providers only), and Social Security was created as a consequence of the supercommittee failing to pass an additional $1.5 trillion in cuts. The good news is that these cuts will not occur until FY2013, so there is still time for Congress to reach an agreement. Policymakers on both sides are already attempting to over-ride sequestration for their preferred programs, but the Obama administration has vowed to veto any such attempts. It seems as though we have reached an impasse.
So, now that the supercommittee has failed, what can we expect? The Obama administration is hoping that the full Congress can pass extensions on the payroll tax cut and extended unemployment benefits before recessing in December. The Republicans are hoping to avoid raising taxes and to make the Bush tax cuts permanent while further cutting domestic spending and fundamentally altering entitlement programs (Medicaid, Medicare, Social Security). Democratic members of the legislature are hoping to preserve Medicare, Medicaid, and Social Security while letting the Bush tax cuts on the wealthiest members of society expire. Regardless of what happens, as we saw with the debt-ceiling debate, the appearance of a "do-nothing Congress" may be the most damaging aspect of these negotiations to the economy, our democracy, and the faith-and-credit of the US government.
My Thoughts on Peters Ch. 17 - Cost-Benefit and Ethical Analysis
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?
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?
Tuesday, November 15, 2011
Policy Paradox and Homelessness
This week we aren't discussing any new theoretical topics, instead we are reviewing some of what we learned from Stone and seeing how you would use Stone's point of view to analyze policy debates. This is a transition into the week after Thanksgiving when we will briefly cover Cost Benefit and Ethical Analysis. Policy analysis is the topic for PAF 471, which will be offered next semester so if you enjoy these topics and want to learn more, I would recommend registering for the course.
In Policy Paradox in Action, Deborah Stone analyzes the history and discourse surrounding Affirmative Action using the framework she presents in this book. She illustrates how you can use the critiques she provides to critically examine policy evidence and argument. She points out where she is using each critique in her analysis. You'll notice that we didn't cover all of the goals, problems, and solutions she discusses. I hope that if you are interested in learning more about what we had to skip that you will at least go back and skim the relevant chapters.
In some ways, this may seem like another substantive chapter about Affirmative Action. While I'm happy that this is an opportunity to learn a little more about the topic, that's not what I want you to take away from this reading. I want you to see that you can combine discussions of goals, problem definition, and policy tools to think critically about public policies, legislation, and implementation. As we'll discuss in two weeks, this does not mean that statistical and cost benefit analysis do not provide valuable insight into our public policy choices. All that I ask (and that I believe Stone asks) is that you approach these analyses skeptically, engage with their methods, and question the possible agenda of those who are conducting them. After thinking critically about them, you can decide for yourself how valuable each analysis is and how close it comes to representing "the truth".
As I mentioned on Twitter, one of the challenges for this week is to read the Housing the Homeless chapter and watch the Street Vets documentary using Stone's critical lens. This chapter was chosen for this week because so many of the issues we are debating in homelessness policy have to do with the questions Stone's book challenges us to think about. Most importantly, the question of numbers and defining who to count as homeless is a major one giving the changing face of "housing insecurity" in the current recession. The chapter also raises the question of using veterans as a synecdoche for the problem of homelessness, given the changing nature of the problem. We have stories about inadvertent (PTSD), accidental (temporary job loss), and mechanical (recessionary effects, lack of mental health and substance abuse treatment) causes. We also have a variety of policy solutions that make very different assumptions about their target populations. Were you able to read this chapter without being influenced by Stone's critical viewpoint? How do you think the debates presented in the chapter held up to Stone's scrutiny? Did you see other elements associated with the polis in the chapter?
In Policy Paradox in Action, Deborah Stone analyzes the history and discourse surrounding Affirmative Action using the framework she presents in this book. She illustrates how you can use the critiques she provides to critically examine policy evidence and argument. She points out where she is using each critique in her analysis. You'll notice that we didn't cover all of the goals, problems, and solutions she discusses. I hope that if you are interested in learning more about what we had to skip that you will at least go back and skim the relevant chapters.
In some ways, this may seem like another substantive chapter about Affirmative Action. While I'm happy that this is an opportunity to learn a little more about the topic, that's not what I want you to take away from this reading. I want you to see that you can combine discussions of goals, problem definition, and policy tools to think critically about public policies, legislation, and implementation. As we'll discuss in two weeks, this does not mean that statistical and cost benefit analysis do not provide valuable insight into our public policy choices. All that I ask (and that I believe Stone asks) is that you approach these analyses skeptically, engage with their methods, and question the possible agenda of those who are conducting them. After thinking critically about them, you can decide for yourself how valuable each analysis is and how close it comes to representing "the truth".
As I mentioned on Twitter, one of the challenges for this week is to read the Housing the Homeless chapter and watch the Street Vets documentary using Stone's critical lens. This chapter was chosen for this week because so many of the issues we are debating in homelessness policy have to do with the questions Stone's book challenges us to think about. Most importantly, the question of numbers and defining who to count as homeless is a major one giving the changing face of "housing insecurity" in the current recession. The chapter also raises the question of using veterans as a synecdoche for the problem of homelessness, given the changing nature of the problem. We have stories about inadvertent (PTSD), accidental (temporary job loss), and mechanical (recessionary effects, lack of mental health and substance abuse treatment) causes. We also have a variety of policy solutions that make very different assumptions about their target populations. Were you able to read this chapter without being influenced by Stone's critical viewpoint? How do you think the debates presented in the chapter held up to Stone's scrutiny? Did you see other elements associated with the polis in the chapter?
Tuesday, November 8, 2011
My Thoughts on Inducements and Policy Paradox in Action
The fourth section in Stone's book deals with solutions to policy problems. Stone lists five possible solutions: inducements, rules, facts, rights, and powers. Sometimes we refer to these solutions as policy instruments or policy tools. They serve as the mechanisms through which government or the community exerts its power on individuals to change their behavior. I chose to assign chapter 11 on inducements rather than one of the other chapters because inducements tend to be our preferred tool in American public policy.
Inducements are the common strategy of rewarding preferred behaviors and penalizing undesired actions. Sanctions and incentives are two-sides of the same coin. They allow the individual to choose his or her behavior but seek to alter the anticipated rewards or penalties for carrying out that behavior. The removal a sanction for good behavior or an incentive for bad behavior illustrates the inter-related nature of sanctions and incentives. This is especially true when we consider research in behavioral economics. Studies have shown that we feel a loss much more sharply than we feel a lack of gain. In other words, you would feel worse about a salary reduction of $300 a month than you would feel about not getting a raise of $300 a month even though they are numerically equivalent.
Inducements are based on the understanding of human behavior characteristic of economics. It assumes that individuals are rational, that they know what will make them happy, and that they act to maximize their happiness. In order for inducements to work individuals must have control over their behavior, they must know about the possible penalty or reward, and they must be able to change their course of action. When inducements are used to act on a group or another collective entity, these assumptions usually fail. At the vary least, it makes the rational decision-making process more difficult. Inducements must be designed differently in these cases to account for the processes of group decision-making in a particular context.
Inducements are also affected by time. It is rare for an incentive or sanction to be delivered immediately after a good or bad action occurs. Even when we can deliver such an inducement, it always occurs after the act. Individuals or groups must be able to anticipate such inducements before they carry out a behavior. Many of our financial incentives and sanctions are delivered through the tax code. This creates a gap in time of up to a year from when the behavior occurs to when the inducement is delivered. If individuals or groups do not believe they will personally have to deal with long-term penalties or receive long-term benefits, then the inducement will be ineffective.
Inducements tend to imply purposeful action. They may try to alter actions with either intentional or inadvertent causes, but they do little to alter mechanical or accidental causes over which individuals have no control. This is why causal stories can be very important. If you want to benefit or burden a group using inducements you have to be able to tell a story about purposeful actions. Although not assigned for this class, the documentary and book, Freakonomics tells a story about the use of monetary inducements to encourage students in a high school to improve their grades. The program seems to work for some students but does not for most of them. This is a common story in public policy. Any time we use a policy tool, particularly inducements to alter behavior we have three groups. We have a group who will always do the desired behavior, a group that will never do the desired behavior, and a group that will change its behavior in response to the right inducement. This group is called the marginal group. Designing a good inducement is difficult because we have to decide the correct value of the inducement and target it to the changeable group. This can bring up a tension between efficiency and equity. It would be more equitable to ensure that everyone who performs a good behavior is rewarded with an incentive, but it is not efficient to reward the group who would perform a good behavior without an incentive.
Although positive and negative inducements are two-sides of the same coin, they can have different effects in the polis. Positive inducements help communities to build trust, goodwill, and cooperation while negative inducements can create conflicts and divisions. Rewards build upon a shared sacrifice. The giver gives up the reward and the receiver gives up his or her desired behavior. Sanctions result in one or both parties experiencing a cost or loss. Of course, we must remember that whether rewards or sanctions are offered, they are both based on an unequal power relationship where one group or individual is able to change the behavior of another.
The design of inducements in the polis is an art. Large positive incentives can lead to excessive competition and even cheating. Large negative sanctions can lead to a reluctance to enforce them. Sanctions or rewards that require a lot of effort on behalf of the giver are often not carried out. Incentives and sanctions can easily become guarantees when the giver is perceived as having little will or power to remove them. When the giver and receiver are very different, there may be a misunderstanding about what type of incentive or sanction will change behavior. Symbolic understandings of need come into play because behaviors that are tied to identity are often impossible to change.
Of course, no inducement operates in isolation. Individuals and groups are motivated by their own desires, but also by inducements imposed by government, business, friends, family, colleagues etc. Even if we accept the assumption that humans are calculating and weigh costs and benefits before they act, an inducement instituted through the policy process is only one small influence on behavior. This is especially true when individuals can adapt their behavior to strategically avoid the consequences of a sanction or reap the rewards of an incentive when it is not really deserved. Going back to the Freakonomics example, if we targeted our incentive only to those students who were able to bring their grades up from a D or F to an A or B, we may see a group of formerly A or B students whose grades drop significantly so they can later receive the incentive for bringing their grades back up to A's or B's. We often refer to this as a perverse incentive, but it is really a consequence of individual rational choice and adaptability.
Inducements are the common strategy of rewarding preferred behaviors and penalizing undesired actions. Sanctions and incentives are two-sides of the same coin. They allow the individual to choose his or her behavior but seek to alter the anticipated rewards or penalties for carrying out that behavior. The removal a sanction for good behavior or an incentive for bad behavior illustrates the inter-related nature of sanctions and incentives. This is especially true when we consider research in behavioral economics. Studies have shown that we feel a loss much more sharply than we feel a lack of gain. In other words, you would feel worse about a salary reduction of $300 a month than you would feel about not getting a raise of $300 a month even though they are numerically equivalent.
Inducements are based on the understanding of human behavior characteristic of economics. It assumes that individuals are rational, that they know what will make them happy, and that they act to maximize their happiness. In order for inducements to work individuals must have control over their behavior, they must know about the possible penalty or reward, and they must be able to change their course of action. When inducements are used to act on a group or another collective entity, these assumptions usually fail. At the vary least, it makes the rational decision-making process more difficult. Inducements must be designed differently in these cases to account for the processes of group decision-making in a particular context.
Inducements are also affected by time. It is rare for an incentive or sanction to be delivered immediately after a good or bad action occurs. Even when we can deliver such an inducement, it always occurs after the act. Individuals or groups must be able to anticipate such inducements before they carry out a behavior. Many of our financial incentives and sanctions are delivered through the tax code. This creates a gap in time of up to a year from when the behavior occurs to when the inducement is delivered. If individuals or groups do not believe they will personally have to deal with long-term penalties or receive long-term benefits, then the inducement will be ineffective.
Inducements tend to imply purposeful action. They may try to alter actions with either intentional or inadvertent causes, but they do little to alter mechanical or accidental causes over which individuals have no control. This is why causal stories can be very important. If you want to benefit or burden a group using inducements you have to be able to tell a story about purposeful actions. Although not assigned for this class, the documentary and book, Freakonomics tells a story about the use of monetary inducements to encourage students in a high school to improve their grades. The program seems to work for some students but does not for most of them. This is a common story in public policy. Any time we use a policy tool, particularly inducements to alter behavior we have three groups. We have a group who will always do the desired behavior, a group that will never do the desired behavior, and a group that will change its behavior in response to the right inducement. This group is called the marginal group. Designing a good inducement is difficult because we have to decide the correct value of the inducement and target it to the changeable group. This can bring up a tension between efficiency and equity. It would be more equitable to ensure that everyone who performs a good behavior is rewarded with an incentive, but it is not efficient to reward the group who would perform a good behavior without an incentive.
Although positive and negative inducements are two-sides of the same coin, they can have different effects in the polis. Positive inducements help communities to build trust, goodwill, and cooperation while negative inducements can create conflicts and divisions. Rewards build upon a shared sacrifice. The giver gives up the reward and the receiver gives up his or her desired behavior. Sanctions result in one or both parties experiencing a cost or loss. Of course, we must remember that whether rewards or sanctions are offered, they are both based on an unequal power relationship where one group or individual is able to change the behavior of another.
The design of inducements in the polis is an art. Large positive incentives can lead to excessive competition and even cheating. Large negative sanctions can lead to a reluctance to enforce them. Sanctions or rewards that require a lot of effort on behalf of the giver are often not carried out. Incentives and sanctions can easily become guarantees when the giver is perceived as having little will or power to remove them. When the giver and receiver are very different, there may be a misunderstanding about what type of incentive or sanction will change behavior. Symbolic understandings of need come into play because behaviors that are tied to identity are often impossible to change.
Of course, no inducement operates in isolation. Individuals and groups are motivated by their own desires, but also by inducements imposed by government, business, friends, family, colleagues etc. Even if we accept the assumption that humans are calculating and weigh costs and benefits before they act, an inducement instituted through the policy process is only one small influence on behavior. This is especially true when individuals can adapt their behavior to strategically avoid the consequences of a sanction or reap the rewards of an incentive when it is not really deserved. Going back to the Freakonomics example, if we targeted our incentive only to those students who were able to bring their grades up from a D or F to an A or B, we may see a group of formerly A or B students whose grades drop significantly so they can later receive the incentive for bringing their grades back up to A's or B's. We often refer to this as a perverse incentive, but it is really a consequence of individual rational choice and adaptability.
My Thoughts on Energy and the Environment
I want to preface this week's post by saying that energy and environmental policy is not my area of expertise. In fact, out of all the policy topics we are discussing this semester, it is the area where I have done the least substantive work. That being said, I think it is incredibly important. I will not be able to add much substantive information to what Peters, the podcast, and the documentary have presented, but I can use my expertise in the policy process to explain why policymaking in the environmental arena is so challenging.
First, I want to call us back to chapter three. In this chapter, Peters talks briefly about wicked problems as areas where the Advocacy Coalition Framework is particularly useful. A wicked problem is a problem that is impossible to solve because of a lack of information, contradictory demands, and complexity. I believe that environmental problems may be the most wicked of problems that policymakers and analysts face. It is impossible to separate the environment from energy use, the economy, and most essentially, our values and way of life. I think that the documentary Heat makes it clear that an American way of life as an ideal for citizens of developing countries is completely unsustainable. Further, humans are very bad at long-range thinking, and even worse at making decisions that will benefit us in the long-run but cause inconvenience in the short-run. In theory, we'd all rather engage in a small inconvenience now if it means avoiding a catastrophic outcome later, but in reality that's not what we choose. It is hard for us to cognitively accept the idea that the future will realistically be radically worse than the present. There have been many psychological and behavioral economics studies detailing this point.
Economic principles like the collective action problem are rampant in environmental policy. Business interests who have been very profitable in the context of the status quo have huge incentives to fight regulations that will immediately affect their bottom line. On the other hand, most citizens will only see diffuse benefits of environmental regulation, spread out over the whole population. Further, these benefits may not be seen immediately and may not be measurable at all. We do not take note when an environmental disaster does not occur only when it does. Measuring the success of environmental policy is nearly impossible because it so often means that something does not happen.
Environmental policy tends to be reactive. When a huge disaster like the BP oil spill, Exxon Valdez, or the failure of the nuclear plants in Japan after the earthquakes takes place we tend to try to take action immediately. Instances like these and Silver Spring lead to reactive environmental policies that try to prevent similar accidents from happening again. On the other hand, issues like global warming which do not lead to immediate and visible accidents but instead act as a contributory cause to many disperse problems become increasingly difficult to deal with from a policy standpoint. They are also easier to deny because they force us to rely on scientific expertise rather than our own experiences of the world. This becomes clear in a This American Life podcast, Act Two of Kid Politics (not assigned) where a leading scientist who studies climate change attempts to change the mind of a high-schooler who is a climate change skeptic.
Ultimately, solving our environmental problems becomes difficult for policymakers because neither of the two approaches work very well. Conservation as proposed by Jimmy Carter requires action on the part of citizens, residents and businesses. Once again we have a classic collective action problem. The benefits of conservation only accrue if substantial numbers of people engage in it. This leads to a free-rider problem where those who do not engage in conservation also see the benefits. The problem is that there are incentives for everyone to be a free-rider causing conservation to fail. Of course government could step in and create economic incentives for conservation like "cash for clunkers" which subsidized the purchase of more fuel efficient vehicles for those scrapping older less efficient vehicles. On the other hand, finding more energy sources may work in the short-run, but ultimately fossil fuels are limited, nuclear power is politically unpopular, and none of our renewable sources can come close to a substitution for fossil fuels. Here too, government can step in with more funding for research and development of new technologies and subsidize the use of hydro-power, wind power, and solar power. Of course, as the ethanol experiment has shown, subsidizing these forms of power may create undesirable unintended consequences.
One of the issues with Peters' book is that this chapter was likely written before fracking aka hydraulic fracturing became a visible problem. Peters' section on natural gas section is very short and provides little substantive information. There is a lot of information about this process from a variety of sources, but the documentary "Gasland" seems to be one of the best sources in terms of explaining the fracking risk.
First, I want to call us back to chapter three. In this chapter, Peters talks briefly about wicked problems as areas where the Advocacy Coalition Framework is particularly useful. A wicked problem is a problem that is impossible to solve because of a lack of information, contradictory demands, and complexity. I believe that environmental problems may be the most wicked of problems that policymakers and analysts face. It is impossible to separate the environment from energy use, the economy, and most essentially, our values and way of life. I think that the documentary Heat makes it clear that an American way of life as an ideal for citizens of developing countries is completely unsustainable. Further, humans are very bad at long-range thinking, and even worse at making decisions that will benefit us in the long-run but cause inconvenience in the short-run. In theory, we'd all rather engage in a small inconvenience now if it means avoiding a catastrophic outcome later, but in reality that's not what we choose. It is hard for us to cognitively accept the idea that the future will realistically be radically worse than the present. There have been many psychological and behavioral economics studies detailing this point.
Economic principles like the collective action problem are rampant in environmental policy. Business interests who have been very profitable in the context of the status quo have huge incentives to fight regulations that will immediately affect their bottom line. On the other hand, most citizens will only see diffuse benefits of environmental regulation, spread out over the whole population. Further, these benefits may not be seen immediately and may not be measurable at all. We do not take note when an environmental disaster does not occur only when it does. Measuring the success of environmental policy is nearly impossible because it so often means that something does not happen.
Environmental policy tends to be reactive. When a huge disaster like the BP oil spill, Exxon Valdez, or the failure of the nuclear plants in Japan after the earthquakes takes place we tend to try to take action immediately. Instances like these and Silver Spring lead to reactive environmental policies that try to prevent similar accidents from happening again. On the other hand, issues like global warming which do not lead to immediate and visible accidents but instead act as a contributory cause to many disperse problems become increasingly difficult to deal with from a policy standpoint. They are also easier to deny because they force us to rely on scientific expertise rather than our own experiences of the world. This becomes clear in a This American Life podcast, Act Two of Kid Politics (not assigned) where a leading scientist who studies climate change attempts to change the mind of a high-schooler who is a climate change skeptic.
Ultimately, solving our environmental problems becomes difficult for policymakers because neither of the two approaches work very well. Conservation as proposed by Jimmy Carter requires action on the part of citizens, residents and businesses. Once again we have a classic collective action problem. The benefits of conservation only accrue if substantial numbers of people engage in it. This leads to a free-rider problem where those who do not engage in conservation also see the benefits. The problem is that there are incentives for everyone to be a free-rider causing conservation to fail. Of course government could step in and create economic incentives for conservation like "cash for clunkers" which subsidized the purchase of more fuel efficient vehicles for those scrapping older less efficient vehicles. On the other hand, finding more energy sources may work in the short-run, but ultimately fossil fuels are limited, nuclear power is politically unpopular, and none of our renewable sources can come close to a substitution for fossil fuels. Here too, government can step in with more funding for research and development of new technologies and subsidize the use of hydro-power, wind power, and solar power. Of course, as the ethanol experiment has shown, subsidizing these forms of power may create undesirable unintended consequences.
One of the issues with Peters' book is that this chapter was likely written before fracking aka hydraulic fracturing became a visible problem. Peters' section on natural gas section is very short and provides little substantive information. There is a lot of information about this process from a variety of sources, but the documentary "Gasland" seems to be one of the best sources in terms of explaining the fracking risk.
Wednesday, November 2, 2011
The Cause of Our Discontent
So far, we have read about two types of problem definition in the polis: symbols and numbers. Generally, the numbers and symbols we use to make a policy argument are meant to tell, or at least imply, a causal story. When we are unhappy with the status quo, particularly when we feel that things have gone very wrong, our "nature" as humans is to try to find the cause. Quite a bit of our recent politicking has been consumed by the so-called "blame game" in which one politician attempts to claim the other is responsible for the problems we face. We see this phenomenon now, with Democrats blaming the economic crash on the trend of Wall Street deregulation and Republicans blaming the Community Reinvestment Act, Fannie Mae, and Freddie Mac. Like most problems in the polis, the "true" cause is likely attributed to all of these, plus many other contributory factors, some of which could have at least been partially mediated by policy and others which were out of government's control.
Turning to this week's substantive reading and documentary, another recent instance where things went horribly wrong was the 2005 response to hurricane Katrina. We can establish certain facts about what happened in this case. On August 29th, 2005 Katrina, a category 3 hurricane, hit the southeastern Louisiana coast. New Orleans, LA a southern city, built below sea-level, with large low-income and African American populations was in the path of the hurricane. New Orleans was (and is today) protected from storm surges by a series of levees built by the Army Corps of Engineers. One day prior to landfall, the Mayor of New Orleans ordered a mandatory evacuation of the city. After the storm hit, the levee system failed causing areas of the city of New Orleans, many of them historically Black and lower income, to flood. Thousands of residents who had not left the city were stranded in flooded homes and neighborhoods for days. Those who had evacuated to the Superdome and Convention Center faced overcrowding and resource shortages. Aid from local, state, and federal governments was slow to arrive, and much of the food and water aid did not arrive until seven days after the hurricane hit. Over 700 New Orleans residents lost their lives in the flood and hundreds of thousands were displaced. An estimated 100,000 have yet to return home. The government response to hurricane Katrina has generally been considered a complete failure. Controversy over who is to blame and for what, continues even today.
In her chapter on causes, Stone presents four general types of causes: accidental, mechanical, inadvertent, and intentional. We have seen arguments for all of these causes in the Hurricane Katrina disaster. Least satisfying, and least likely to be true, is the accidental cause argument. Basically, this argument would posit that a hurricane is a force of nature and no one could have anticipated or predicted what the effects of such a hurricane could be. Alternatively, one could argue that even with complete preparation and "mitigation", the levees would have failed and people would have lost their lives. In other words, what happened was out of anyone's control. I believe that evidence from the documentary and the reading shows that this explanation is incorrect in this case.
We often see the argument that FEMA's response was ineffective due to mechanical causes. The federalist system required the state and local government to authorize a federal response, and such a response was never received by the federal government from the state of Louisiana. Of course, state and local officials vehemently dispute this fact. Many have also argued that the reorganization of FEMA into the Department of Homeland Security caused the agency to lose a substantial number of highly-trained experts and funding for disaster response. The employees of FEMA were, in this story, doing their job to the best of their ability, but were hampered by systemic issues. A similar story has been told about the National Guard response to Katrina. There is more about both of these mechanical explanations in the reading and documentary.
There is also an inadvertent story at play in the Katrina story. Many have argued that the people of New Orleans would have left the city if they could but were either uninformed or unable to do so. Many lacked correct information about flood zones and the likelihood that the levees would burst. Public transportation out of the city was lacking. By the time the evacuation order was issued, it was too late for many to coordinate sufficient transportation. There may also have been an unwillingness to believe that this was "the one" or that their usual hurricane preparations would be inadequate. Some argue that the existence of government emergency response agencies was itself an inadvertent cause of the devastation, creating a false sense of security among those affected.
Finally, we heard a substantial number of intentional causal explanations for the devastation caused by Katrina and the botched government efforts to return residents to the city after the storm. As Kanye West famously stated in the televised fundraiser for Katrina relief, "George Bush doesn't care about black people." This sentiment underlies many of the arguments that the devastation caused by the hurricane was intentional. Some believed that the levees were purposely blown to flood low-income neighborhoods and preserve wealthier white New Orleans neighborhoods. Many believe that the bureaucratic red tape surrounding the Road Home program was created to keep poor African American former residents from returning home. Stories of intentional causation are sometimes labeled "conspiracy theories". While they are often untrue, the tobacco settlement discussed by Stone illustrates that some conspiracy theories contain at least a degree of truth. If you have not seen the film "The Insider", it is worth a watch to see how an intentional causal explanation evolved from conspiracy theory to truth.
In reality, the causes of social problems and natural disasters are complex and multi-faceted, but "It's complicated" is rarely a satisfying explanation in the polis. Politicians try to avoid blame for problems by shifting the blame to their political opponents. This occurs with any problem, whether it is a devastating natural disaster or a long-standing persistent issue. How would you use these causal theories to explain a longstanding problem, like poverty or health disparities, in the polis? Have you seen politicians use these theories to explain problems in the presidential primary debates?
Turning to this week's substantive reading and documentary, another recent instance where things went horribly wrong was the 2005 response to hurricane Katrina. We can establish certain facts about what happened in this case. On August 29th, 2005 Katrina, a category 3 hurricane, hit the southeastern Louisiana coast. New Orleans, LA a southern city, built below sea-level, with large low-income and African American populations was in the path of the hurricane. New Orleans was (and is today) protected from storm surges by a series of levees built by the Army Corps of Engineers. One day prior to landfall, the Mayor of New Orleans ordered a mandatory evacuation of the city. After the storm hit, the levee system failed causing areas of the city of New Orleans, many of them historically Black and lower income, to flood. Thousands of residents who had not left the city were stranded in flooded homes and neighborhoods for days. Those who had evacuated to the Superdome and Convention Center faced overcrowding and resource shortages. Aid from local, state, and federal governments was slow to arrive, and much of the food and water aid did not arrive until seven days after the hurricane hit. Over 700 New Orleans residents lost their lives in the flood and hundreds of thousands were displaced. An estimated 100,000 have yet to return home. The government response to hurricane Katrina has generally been considered a complete failure. Controversy over who is to blame and for what, continues even today.
In her chapter on causes, Stone presents four general types of causes: accidental, mechanical, inadvertent, and intentional. We have seen arguments for all of these causes in the Hurricane Katrina disaster. Least satisfying, and least likely to be true, is the accidental cause argument. Basically, this argument would posit that a hurricane is a force of nature and no one could have anticipated or predicted what the effects of such a hurricane could be. Alternatively, one could argue that even with complete preparation and "mitigation", the levees would have failed and people would have lost their lives. In other words, what happened was out of anyone's control. I believe that evidence from the documentary and the reading shows that this explanation is incorrect in this case.
We often see the argument that FEMA's response was ineffective due to mechanical causes. The federalist system required the state and local government to authorize a federal response, and such a response was never received by the federal government from the state of Louisiana. Of course, state and local officials vehemently dispute this fact. Many have also argued that the reorganization of FEMA into the Department of Homeland Security caused the agency to lose a substantial number of highly-trained experts and funding for disaster response. The employees of FEMA were, in this story, doing their job to the best of their ability, but were hampered by systemic issues. A similar story has been told about the National Guard response to Katrina. There is more about both of these mechanical explanations in the reading and documentary.
There is also an inadvertent story at play in the Katrina story. Many have argued that the people of New Orleans would have left the city if they could but were either uninformed or unable to do so. Many lacked correct information about flood zones and the likelihood that the levees would burst. Public transportation out of the city was lacking. By the time the evacuation order was issued, it was too late for many to coordinate sufficient transportation. There may also have been an unwillingness to believe that this was "the one" or that their usual hurricane preparations would be inadequate. Some argue that the existence of government emergency response agencies was itself an inadvertent cause of the devastation, creating a false sense of security among those affected.
Finally, we heard a substantial number of intentional causal explanations for the devastation caused by Katrina and the botched government efforts to return residents to the city after the storm. As Kanye West famously stated in the televised fundraiser for Katrina relief, "George Bush doesn't care about black people." This sentiment underlies many of the arguments that the devastation caused by the hurricane was intentional. Some believed that the levees were purposely blown to flood low-income neighborhoods and preserve wealthier white New Orleans neighborhoods. Many believe that the bureaucratic red tape surrounding the Road Home program was created to keep poor African American former residents from returning home. Stories of intentional causation are sometimes labeled "conspiracy theories". While they are often untrue, the tobacco settlement discussed by Stone illustrates that some conspiracy theories contain at least a degree of truth. If you have not seen the film "The Insider", it is worth a watch to see how an intentional causal explanation evolved from conspiracy theory to truth.
In reality, the causes of social problems and natural disasters are complex and multi-faceted, but "It's complicated" is rarely a satisfying explanation in the polis. Politicians try to avoid blame for problems by shifting the blame to their political opponents. This occurs with any problem, whether it is a devastating natural disaster or a long-standing persistent issue. How would you use these causal theories to explain a longstanding problem, like poverty or health disparities, in the polis? Have you seen politicians use these theories to explain problems in the presidential primary debates?
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