Why Government Fails So Often

Why Government Fails So Often: And how it can do better is the title of Yale emeritus law professor (and former public servant) Peter Schuck’s recent book.  Schuck’s focus is on the domestic activities of the US Federal government.  That limitation matters, as it excludes foreign and defence policies altogether (natural activities for the state) and state and local government, which in the US context employ far more people and do many of the basics of modern government (police, prisons, education) that in New Zealand are provided centrally.

But what Schuck does cover is quite enough to be going on with, and a fairly depressing catalogue of case studies and reports of other systematic research on the activities of the US federal government.     And he isn’t coming at the issues from with the perspective (and inevitable biases) of a small government champion.  He describes himself as “militant moderate who has always voted for Democrats for president”.    Perhaps partly as a result, his ideas for “how it can do better” are much less persuasive, and realistic, than his description and analysis of what has gone wrong.  This is an author who wants to believe in the possibilities of government.

Early in the book, he reports the “metallic laws” of programme effectiveness, identified by sociologist Peter Rossi, “writing in 1987 after many years of experience in evaluating government programs”:

  • The Iron Law of Evaluation.  The expected value of any net impact assessment of any large scale social program is zero.
  • The Stainless Steel Law of Evaluation.  The better designed the impact assessment of a social program, the more likely the resulting net impact is to be zero.
  • The Brass Law of Evaluation.  The more social programs are designed to change individuals, the more likely the net impact of the program will be zero.
  • The Zinc Law of Evaluation.  Only those programs that are likely to fail are evaluated.  As he notes, this has the most optimistic slant, pointing to a possible selection bias in the programs chosen for ex post evaluation.

Schuck’s catalogue of US government failures might easily lead New Zealand readers to dismiss it as of no relevance here.  The details of our political, constitutional, budgetary, and administrative systems are so different, and for many of the specifics we can only shake our heads in wonder that such a rich and successful country tolerates, and survives, such egregious examples of government failure.

But since human nature is….human….and the US draws much of its political and institutional traditions from the same Anglo roots as countries like New Zealand and Australia do (and, frankly, since the US has been far more successful economically than New Zealand through the big government century), I think it at least behoves New Zealand readers to think through what lessons there might be for New Zealand.  Can we be confident that the metallic laws –  as strong tendencies –  would have much different in New Zealand over the years?

Two features that strike me about New Zealand, in contrast to the United States in particular, are:

  • Geoffrey Palmer’s characterisation of law-making in single chamber New Zealand as the “fastest legislature in the West”.  That can be for good, and for ill, but how confident can we be that the balance is with the good?   Of course, sometimes even the US can rush things through, and here MMP (not a model I favoured) has tended to slow things down at times, but the sheer speed with which, for example, property rights in central Christchurch could be abrogated following the earthquakes was pretty sobering.
  • The relative lack of informed scrutiny, challenge, and evaluation.  The political process is the US, while fascinating, is not pretty.  But it is a system with all sorts of lobbyists, think tanks, well-resourced congressional committees, policy academics, scope for judicial challenge and review, Inspectors-General in many/most government agencies, the CBO etc.    By contrast, consider New Zealand.  Some of it is a perhaps inescapable small country problem, but even if the problem is inescapable doesn’t mean it isn’t real.  We’ve had good quality policy in many areas at times in the last 100 years – but in many areas have been at both one extreme and the other in that time.  How do we know, at any point in time, that government is adding value?

I probably incline towards scepticism about how much government can usefully, and reliably, accomplish, and have been struck in recent years by how many of the obstacles governments are trying to grapple with (and are often present as heroic for their efforts in doing so) are largely of government’s own making in the first place.  In the macro area, one could think of the current euro crisis, the zero lower bound, or (arguably) the US financial crisis.

But it also does to remind ourselves what would not be without governments having gone beyond a narrow conception of their role.  I think of modern New Zealand, as an example, and –  as Daniel Hannan has highlighted – the Anglosphere more generally.  It will not have benefited everyone (nothing does), and we can be rightly uneasy about some of what was done, but modern New Zealand, with all its strengths and weaknesses, would not exist, as one of the more stable and prosperous countries around, without the active involvement of 19th century British governments and taxpayers.  How do we evaluate government failure in areas like that?