Government Index

 

Evaluation

 

The key to good government is to create the appropriate incentives to use knowledge to translate vaguely defined general purposes into specific objectives and policies. In representative government politicians compete for power to articulate these objectives and policies and the general voter holds elected politicians accountable for their actions. The professional review  improves the incentives in the system of checks and balances by providing the general voter with an easily understood measure of political performance which voters would use to evaluate incumbents. Nevertheless, the professional review would have strong incentive effects on the behavior of elected and appointed officials only if such officials assumed that a professional review case would be filed the minute policy research established a government defect.

Since all groups in society are negatively impacted by bad legislation and administration, any individual, firm, public or private institution could file a professional review case in court, but generally few would file such cases unless the estimated gain was greater than the estimated costs. Whether the professional review creates incentives for elected and appointed officials to incorporate general benefits, consistency and efficiency in all their actions depends on whether private parties would have sufficient individual incentives to file a professional review case on governmental defects established by analysis.

Pursuing a professional review case would be costly. First, the court to avoid being overwhelmed by nuisance suits would require considerable impartial evidence such as professionally reviewed research to initiate the case. Second, pursuing a case to the Supreme Court is very expensive. Finally, there is a free rider problem in that, while the instigators of the case would have to pay their legal fees, the benefits are, frequently, widely distributed, and the instigators have no mechanism to recover costs from the beneficiaries. Thus, it is not obvious that sufficient professional review cases would be filed to create an incentive effect on legislators and administrators.

From the perspective of costs, two factors lesson the burden. First, from the perspective of prospective initiators of professional review cases, the professional review is simply another tool that might be used to influence government. Although pursuing a professional review case would indeed be expensive, it would be much cheaper than trying to mount a public relations campaign to galvanise public opinion into demanding legislative action. Second, as will be discussed in the next chapter, the right to learn could be interpreted as a requirement that the government must fund professional-review research, and to be efficient, such research monies would have to be awarded by an impartial peer group award system. This means that much of the research exposing conditions warranting a professional review will be publicly funded. Private sources would fund additional professional review research which would be performed by think tanks such as the Brookings Institute and the American Enterprise Institute. Once research has been published in a reputable journal, any party could use this research to initiate a professional review case.

The motivation of firms in filing professional review cases would be self-interest. Consider the implications of a professional review on the current political economy. Previously the inconsistency in risk policy between old risks and new risks was discussed. Trade associations for firms subject to the more costly, higher standard screening for new risks would have a strong incentive to file a professional review case to receive treatment consistent as with that of old risks. The possible result of such a case might be to force the administration to implement a policy of comparative risk between old and new technology. Trade associations would have incentives to challenge regulations such as the environmental regulations which require uniform reduction in pollutants by all polluters. Most economists would argue that general benefits would be increased with a system which reached targets but allowed a market mechanism to determine the distribution of pollution between firms.

On occasion, a trade associations might pursue an efficiency case to compel the administration to adopt technology proved efficient in similar operations in private industry. Many government activities, for instances, the processing of information have similar operations in business. If the government falls behind accepted business practice, the vendors of the new technology would have incentives to press efficiency suits. Moreover, on rare occasions the trade association of one industry might use a professional review to challenge a government granted privilege, for example preferential tax treatment, to a rival industry.

Besides purely private professional review cases public agencies and public interest groups would file professional review cases to achieve their goals. A new President, who represented a shift in political philosophy from his predecessors, would consider the professional review a potential tool to prune the legislative legacy of his predecessors. Also, lower level governments would on occasion use the professional review to challenge legislation and executive actions of higher level governments.

Public interest groups such as the Sierra Club, Common Cause, and Ralph Nader's group would use the professional review to promote their causes. They would probably ask that tobacco subsidies be eliminated as both inconsistent and lacking general benefits. Public interest groups would also insist on the basis of consistency that the oil industry be included in the effort to clean up toxic wastes with the Superfund. In addition, Mothers Against Drunk Driving, MADD, would probably press for a more consistent treatment of drugs and alcohol. Public interests groups would challenge the practice of bailing out failed large banks which protects the stockholders' assets and selling off the assets of failed small banks which generally leaves the stockholders with no assets. The small banks trade association might pursue this in the remote hope of obtaining a similar subsidy; however such a subsidy would be challenged as lacking general benefits.

Many general benefit and efficiency professional reviews would be initiated by citizen watchdog groups such as taxpayers associations. Under general benefits, those activities which lack national benefits should be funded locally or by the recipients. For example, watchdog groups would use a professional review of general benefits to halt the efforts of the federal government in trying to protect homes built on barrier islands from the Atlantic ocean. Such groups would use efficiency professional reviews to obtain faster enactment of efficiency studies. President Reagan created the Grace Commission to study the efficiency of the federal government. After some study, the Grace Commission proposed that through greater efficiency the federal budget could be reduced some 400 billion dollars without reducing services. Many of the Grace commission recommendations will be enacted over time, but re-election conflicts, such as closing military bases, means the process will be a slow one. The professional review challenge of efficiency would speed up the process of achieving efficiency in government.

Since many groups would have an incentive for pursuing judicial professional reviews, the number of these reviews should be sufficient to create the perception that, whenever research revealed deviations in legislation and administrative actions from the precedents set by professional reviews, some interested party would surely file a judicial professional review case. If this were the case, senators and administrators would carefully consider the precedents established in professional reviews in proposing legislation and administrative actions. Moreover, senators and administrators would take steps to correct any defect revealed by research prior to a trial. Once this happened, the number of actual judicial professional review cases to maintain the incentives could be quite small. The main effect of the judicial professional review would be the incentive effect on Congress and the administration.

One consequence of the incentive effect of the professional review would be that given publicly funded elections, the relationships between senators and lobbying groups would change. Senators, while not beholden to lobbying groups for campaign finance, would still need to maintain support of interest groups in a broad coalition in order to be re-elected. A senator would therefore be interested in legislative proposals of interest groups in his coalition. In providing the type of legislation wanted by his coalition a senator would have to take precautions to reduce the possibility of a rash of negative professional journal articles, or even worse, a successful negative professional review. Senators would insist that they had a budget for contract research to carefully analyse legislative proposals. They would also have an incentive to have each legislative proposal reviewed by prospective opponents of the proposal in order to ferret out those proposals which would not stand up to a professional review. A successful lobbyist would therefore need to be able to create proposals which could survive a potential professional review and, in attacking legislative proposals, know how to create a reputable analytic argument. A lobbyist's status would thus be based on both his persuasive and his analytic skills. In this way the professional review and public funding of campaigns does not eliminate lobbying, it merely changes the incentives.

A second consequence of the incentive effect of the professional review would be research to continually refine the precedents for establishing general benefits, consistency and efficiency. Liberals wishing to promote government expansion would promote research to establish new forms of measurement of the benefits of government. At the same time, conservatives would promote research to demonstrate defects in positive measures of government benefits. Regardless of the political motivation such research would constantly refine the precedents for establishing general benefits. Likewise, research would constantly refine the precedents for consistency and governmental efficiency.

And a third consequence of the incentive effect of the professional review would be a better adjustment to the accumulation of knowledge. Improvements in the estimation of the common weal are to be achieved by increasing the use of knowledge in this endeavor. As the social sciences and related disciplines advanced a basic requirement of general benefits would be established that legislation and administration be based on a complete formal analysis. Even with competing theories of behavior, the basic requirement for a thorough analysis would result in better government, since complete analysis places a check on poorly conceived legislation. If the analysis were so superficial that it is incorrect with respect to the stipulated theories, the law or administrative action would quickly be declared unconstitutional by a professional review. If the theories upon which the analysis supporting legislation were correct, then the law and administrative actions based on careful analysis would be superior to those based on ad hoc intuition. In the case where the theories upon which the legislation was based are subsequently proven incorrect, the professional review would provide a mechanism for much more rapid removal of the legislation than obtaining a majority vote of the legislature. As soon as most of a profession rejected the theories upon which a law are based as false, the initiation of a professional review would result in the law being declared unconstitutional. As knowledge advanced the performance of legislation based on complete analysis should increase over the current practice of at best partial analysis.

The estimation of the common weal can also be improved by innovations in the strategy for implementing governmental innovations, a topic which will be considered in the next chapter.

Notes and References 8