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Issue #19, Winter 2011
The “More What, Less How” Government
First Principles: The Role of Government
Eric Liu and Nick Hanauer
An effective epidemiologist invests more in prevention than in cure, nipping epidemics in the bud rather than trying to contain them after the fact. Every part of government needs to think more like a public health officer: to be mindful always of desired outcomes, track closely trends in behavior, look at the world like a network of networks, identify the key nodes of virulence, and focus energy and effort on those nodes to foster contagions of good and to contain contagions of bad. To put it simply, focus on prevention rather than cure. In the last 20 years, urban policing has moved this way, as shown by the emergence of national coalitions of cops and children’s advocates like Fight Crime: Invest in Kids. So now must efforts to combat obesity or teen pregnancy, or to promote stable families or responsible environmental behavior. Government is in a unique, bird’s-eye position to map the network and set off the epidemics it wants. It can and should make networked collaboration and early intervention–things that most public entities are not incentivized today to pursue–actual conditions for continued public funding. Government should scale up proven, evidence-based pilot projects since investment early in the pipeline yields far more dividends than investment at the end. Does that mean that starting today the state should stop funding prisons and fund only early learning? Of course not. It does mean, though, that the state today must set an intention and a timeline, at the end of which we are indeed investing far more in early learning than in prisons.
Create Incentives and Rewards for Overperformance
Ex-ante regulation and ex-post punishment are the two tools that government uses most often to affect the behavior of firms and individuals. A third tool is missing, the critical one from an adaptive government perspective: incentives for excellence. Government anticipates and punishes underperformance. It also must create massive and system-wide incentives for overperformance. The Race to the Top is a template that should be applied in many more settings across government–in building codes, early learning, health care, car gas mileage. There should be challenge awards like the X Prize–given by a private foundation to innovators in aerospace, energy, and other fields–in every part of government. The strategic recognition and rewarding of overperformance is the fastest way to set off cascades of innovation in the public sector. In the case of pollution, bad performers should pay extra fines that subsidize rewards for high performers. Overperformers should get “E-ZPass” advantages–expedited regulatory approval, easier access to credit for productive investment, and more–so that government can help the excellent perpetuate their success and pressure the bad to end their failure.
Design More Nudges
By this point it should be clear that we believe government should be very judgmental–call it paternalistic, if you must–about pro-social goals and activities. More than Cass Sunstein, the head of Obama’s Office of Information and Regulatory Affairs and co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness, we believe that such judgment should sometimes be expressed in direct government action. But like Sunstein, we are fans of what he describes as “nudging”: designing “choice architectures” that give citizens the liberty to choose but steers them toward the more pro-social choices. Whether it’s designing opt-outs rather than opt-ins for retirement saving, or labeling food ingredients or household appliances for energy use, nudging and the application of behavioral science to policy-making is smart and adaptive.
Tax More Strategically–and Progressively
America’s tax code today is an incoherent jumble. The power to tax should be used more strategically, in line with the broad goals the national government sets. We should use the tax code like a personal trainer: to get us in shape by reinforcing good habits and punishing bad ones. A strong carbon tax, to reduce energy consumption. Soda and candy taxes, to attack obesity. Estate taxes, to correct for unearned advantage and to stave off aristocracy. But the most strategic tax is a progressive income tax, the cornerstone of every prosperous nation. In 1980, the wealthiest 1 percent of Americans accounted for 8.5 percent of national income; the bottom 50 percent, 17.8 percent. By 2007 the top 1 percent accounted for 23 percent of national income and the bottom half, just 12.5 percent. If the trend continues, by 2040 the richest 1 percent will command 37 percent and the bottom half of Americans just 6 percent. Income and wealth are a society’s lifeblood, and letting more than a third of the nation’s wealth “clot” among just 1 percent of our citizens is suicide. Redistribution of wealth is essential. Progressive taxation is the only way for a society to create the virtuous circle of ever-increasing shared prosperity.
Weed Relentlessly
Evidence-based practice and funding sound obvious but aren’t routinely practiced. It must be the actual method of government. When the experimentation we champion has yielded successful models–in, say, the delivery of primary care–they should be replicated. When the evidence says a program has failed or outlived its usefulness, it should end. And government should be looking continuously to end things–indeed, it should have a goal of ending a percentage of programs every year–so that those resources can be deployed, in an adaptive way, to new challenges. The point, as in our entire philosophy, is not to end government, but to end the way we do government. Government should be living, organic, evolving–not inert, inanimate, and unchanging.
Conclusion
More on the what and less on the how–that’s our philosophy.
We believe, as did FDR, in “bold, persistent experimentation” in government. But today we do not (fortunately) have World War II to distort the experiments. So we have to be far more disciplined in our experimenter’s mindset: We have to be ambitious in our goals, imaginative in our means, ruthless in our evaluations, and aggressive in funding successes and starving failures.
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TAGS: Governance, Liberalism
ISSUE #19, WINTER 2011
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George DeMarse:
This is good stuff; it addresses "the role" of government rather than the "size" of government, and it has valid prescriptions about that role.
You suggest that the national government "encourage" innovation and responsibility for implementation and outcomes at ever lower levels of action (e.g., local level).
While this sounds tempting, and some of it is actually being done (encouraging green industry), there are political barriers that remain:
1) Some policy actions, like foreign policy, environmental enforcement, and defense must be done at the national level due to the national consequences of the actions. How these policies take shape will not be determined by the average Joe and will continue to be contested.
2) There is no political agreement on what "national goals" should be. That continues to be our problem, whether or not innovation is "pushed down" to lower levels.
3) When government plays a crucial role in some activities and is generally successful, like air traffic control and food/drug inspections, it does not advertise its successes and people tend to have a "so what" attitude about these crucial functions performed by government.
4) Continuing lack of civic pride and an "I've got mine, screw you" attitude continues to prevail.
You will note that some of these problems are self-inflicted by government, failure to advertise its success for example, or its crucial role in events. But many times, it's politics that prevents appreciating what government does well--democracy itself prevents it. As you say, required government service would help this, but I doubt you will ever see it.
I conclude that representative democracy is dysfunctional, direct democracy would be a disaster. I therefore see a move to technocratic governance as the only functinal alternative.
The Sage of Wake Forest
Sep 30, 2012, 8:18 AM
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Eric Liu and Nick Hanauer are co-authors of The True Patriot and The Gardens of Democracy and founders of The True Patriot Network. Liu served as a speechwriter and deputy domestic policy advisor to President Bill Clinton. He is an author and educator based in Seattle. Hanauer is a Seattle-based entrepreneur and venture capitalist. He is active in many progressive civic and philanthropic organizations and causes.
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