Transaction Publishers, Rutgers University, New Brunswick, NJ 08903 • 1990 • 129 pages • $24.95 cloth; $14.95 paper
The thesis of this book—that an objective, scientifically determined public policy is impossible—stands in stark contrast to the proliferation of public planning agencies that has occurred over the last generation. The goal of a scientific public policy would appear meritorious. Using research and experimentation to gather evidence with which to guide public policy decisions would seem superior to reliance on unresearched and untested opinions. Nevertheless, the author contends that all the research in support of government intervention adds up to essentially nothing.
Public policy decisions are inherently entangled with value judgments. The aim of policy is to do “good,” however that may be defined. Since definitions of the “good” will differ, demonstrating that one policy is superior to another must quickly run into subjective inputs. For example, no public policy has uniformly beneficial effects on everyone. Some will be helped, others may be hurt. Balancing the help and the hurt is the ostensible goal of a scientific approach to policy-making.
The tools of scientific policy-making include “risk assessment,” “cost/benefit analysis,” and “environmental impact analysis.” However, researchers don’t agree on just how these tools should be used. Yet, the way in which a tool is used can affect the result.
Consider, for example, the 1987 speed-limit increase on rural interstate highways. Since the limit was raised to 65 miles per hour, studies have been done to show that accidents and fatalities have increased. Focus on the affected routes reveals, unsurprisingly, higher incidences of accidents. However, other researchers question the scope of the analysis and point to lower overall accident and fatality rates. Scientists come down on both sides of the policy issue of whether the increase in speed limit was a “good” or “bad” policy change from the perspective of safety. The policy question becomes even more complicated when we consider other travel dimensions such as time and convenience.
The end result of policy decisions is frequently a law or a regulation compelling people to modify behavior or to finance government programs. Even if we were convinced that the majority of people would benefit, there is still the uncomfortable aspect that the law compels some to take actions from which they will not benefit, or perhaps even be harmed. In the absence of the compulsion of law or regulation, people are making the choices that they perceive as optimal. Initiating the compulsion will shift people into behaviors that they did not freely choose. The inevitable consequence is that there will be less satisfactory results • despite the noblest of intentions.
As an alternative to relying on the choices people make in the free market, many advocates of government intervention imagine that we can rely on information obtained from polls or surveys. Unfortunately, such data are less reliable than many might hope. The wording of survey questions can easily force the desired result. In the eagerness to discover a wellspring of popular support for a government project, researchers can lapse into faulty survey design and achieve misleading answers. Even if the questions are designed with utmost care, respondents may mis-perceive or misrepresent their own preferences.
A case in point is the survey carried out on the “Sardine Express” train during the 1980 Phoenix flood. For a period, all but two highway bridges over a river that splits the metropolitan region were closed or washed away. Commuters packed the trains set up to offer an alternative service during the emergency. A survey of riders showed that the average rider evinced a willingness to pay more than twice the existing fare and to ride the train regularly once the emergency had passed. Yet, the day a third bridge over the river was restored to service (by no means eliminating the crushing traffic jams) train ridership dropped by 75 percent.
The severed link between the costs and benefits of public projects aggravates the problem of determining the relative worth of each project. This is probably what lies behind the phenomenon of a voter population that wants more services from government, but doesn’t want to pay more taxes. If we ask people whether they want more roads, parks, police, or whatever and no price tag is attached, large majorities will respond in the affirmative. If we ask them if they want to pay higher taxes, they will naturally say no. Hence, we have persistent crises in government budgets.
The private sector resolves this dilemma by putting the price tags right on the merchandise. Then those who truly value the product at more than the cost will buy. Those with an opposite opinion won’t buy. This linkage between costs and benefits simplifies the problem for private sector firms. Tax-funded projects are denied this crucial measure of true value.
Robert Formaini is not an opponent of science per se. He does assert, though, that more skepticism should be applied to the claims made on behalf of government intervention. The scientific studies purporting to show gains from displacing the market with government edicts are fatally flawed. The benefits are typically inflated. The costs are repeatedly underestimated. The risks are always far greater than admitted.
The alternative to a pseudo-scientific backing of more interference with freedom of choice is a greater appreciation of the irreplaceable role played by voluntary transactions in the marketplace. When people are free to choose, they are in the best position to maximize both individual and social well-being. Recognition of this fact would be the most scientific approach to public policy-making.
Mr. Semmens is an economist for the Laissez Faire Institute in Tempe, Arizona.