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Politics or Policies?

June 8, 2011

Over the past few days an interesting theme has emerged around homeland security budget deliberations on the Homeland Security Watch blog. As my blogging colleagues Jessica, Chris, Phil and many commentators on their posts have pointed out, we have no shortage of views about what’s right or wrong with the way we’ve been spending money over the past ten years or about how we should spend money in the future.

As I read these interesting and very informative perspectives, I could not help but think that despite all the discussion of politics this situation is more a problem of policy and the tendency of politicians to confuse the two. The distinction I intend here is simple: Politics concerns itself with competing conceptions of the good related to who, why, where and what; policy extends these judgments by focusing on how, when and how much.

No doubt the competing narratives about whether we’ve spent wisely or whether the proposed cuts go too far are steeped in politics. But the policy questions raised by the decisions unfolding before us have very real implications for programs, processes, people and ultimately what we choose to call progress.

This last point — how we define progress — illustrates the central problem confronting politicians and policy analysts alike. Politicians tend to define success very differently from policy analysts.

A simple semantic distinction might make this problem clearer. Public officials often use the terms efficiency and effectiveness carelessly. If we’re talking about economic (aggregate) efficiency — welfare maximization — then they may not be all that different. But when we talk about efficiency the way the current budget debate seems to be — as a question of productivity or throughput, then it is far less clear that the two terms have the same meaning.

Indeed, when politicians frame budget cuts as a way to hold public administrators accountable, they usually want to improve productive or managerial efficiency, rather than aggregate efficiency. As a consequence, it should come as no surprise when policy analysts and public administrators raise concerns that these decisions will compromise the effectiveness of their programs.

This, of course, sets off a knee-jerk response on the part of politicians, who suspect that the policy analysts and public administrators are only concerned with their own welfare, not the public’s. For their part, the policy analysts and public administrators usually respond to such rhetoric by wondering aloud (albeit under their breath) about the parentage of their political masters.

I am not usually one to suggest that such complex problems have simple solutions, but this might be an exception to that rule. The current budget debate underscores why it is important for us to produce a better understanding of how homeland security contributes to aggregate improvements in welfare. These gains can take many forms, not all of which are economic in nature, but which nevertheless all have some form of value.

Security is a value. So is liberty. Clearly people have competing conceptions of what they would be willing to pay to feel secure. These decisions are in essence a question of how much liberty individuals are willing to sacrifice to feel safe.

We can monetize the value of security by asking ourselves how these individual decisions play out in light of different political or policy choices. Perhaps more importantly, we can assess the ways competing policies affect these tradeoffs. By questioning not just how much we have spent and on what, but also by examining how airport security, for instance, has facilitated or inhibited the desire of individuals to travel as measured by passenger trips taken and the health of the industry, we can assess whether our political choices and policies resulting from them have had their intended effects.

Obviously, these techniques have limitations. Not the least of which is the difficulty measuring how well our investments help us prepare for threats we have not yet imagined. These questions require politicians to trust the policy analysts and public administrators rather than second-guessing them and moving beyond the who, why, what and where to concern themselves with how, when and how much.

Gaining the trust to tackle these difficult questions makes it all the more important that we establish some common ground between the politicians and policy analysts when it comes to deciding what investments to make and how to make them. As such, both groups would do well to review a primer on welfare economics and transaction cost economics before the final vote on the budget.

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