Judging public policy trade-offs
Judging Public Policy Trade-offs: Collective Benefits vs Individual Rights
The trade-off
- The trade off: not just about public benefit vs private wants and needs
The trade-off
- The trade off: not just about public benefit vs private wants and needs
- benefit vs cost of enforcement
The trade-off
- The trade off: not just about public benefit vs private wants and needs
- benefit vs cost of enforcement
- financial costs of enforcement - just the beginning
The trade-off
- The trade off: not just about public benefit vs private wants and needs
- benefit vs cost of enforcement
- financial costs of enforcement - just the beginning
- Human costs of enforcement
The trade-off
- The trade off: not just about public benefit vs private wants and needs
- benefit vs cost of enforcement
- financial costs of enforcement - just the beginning
- Human costs of enforcement
- Remember the definition of government!
John Hancock: Smuggler 1737-1793
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John Hancock, first signer of the Declaration of Independence was a smuggler evading British taxes on imported goods.
Eric Garner: Smuggler 1970-2014
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Eric Garner: Killed by New York police while selling loose cigarettes to evade NY cigarette taxes
Source: Seven Last Words of the Unarmed
Uninented Consequences Add Complexity
- Unintended consequences of public policy make it even more difficult to judge the trade-offs
- Unintended consequences: the results of actions that were not foreseen or intended by a purposeful action.
Unintended consequences Examples
Unintended consequences Examples
Raising “sin” taxes
Ban of pesticide DDT in 1972
- millions of mosquito born illness deaths
- sickness related financial costs to individuals, families, and governments
Unintended consequences Examples
- Raising “sin” taxes
- Ban of pesticide DDT in 1972
- Three strikes laws and capital punishment for rape or kidnapping
Unintended consequences Examples
Raising “sin” taxes
Ban of pesticide DDT in 1972
Three strikes laws and capital punishment for rape or kidnapping
- Criminals want no witnesses
Unintended consequences Examples
Raising “sin” taxes
Ban of pesticide DDT in 1972
Three strikes laws and capital punishment for rape or kidnapping
- Criminals want no witnesses
- increase in murders
Unintended Consequences
- Unintended consequences are an important trade-off
Unintended Consequences
- Unintended consequences are an important trade-off
- They are not always predictable
Unintended Consequences
- Unintended consequences are an important trade-off
- They are not always predictable
- They should be expected and considered
Unintended Consequences
- Unintended consequences are an important trade-off
- They are not always predictable
- They should be expected and considered
Road to Serfdom
F.A. Hayek - Nobel Memorial Prize in Economic Sciences (1974)
Instead of repealing bad economic regulations because of unintended consequences, we pass more more economic regulations with more unintended consequences
WWII, response to totalitarianism in Nazi Germany and Soviet Russia
The Road to Serfdom in Five Minutes
Road to Serfdom
F.A. Hayek - Nobel Memorial Prize in Economic Sciences (1974)
Instead of repealing bad laws because of unintended consequences, we pass more laws with more unintended consequences
Hayek focus: economic central planning
Road to Serfdom
F.A. Hayek - Nobel Memorial Prize in Economic Sciences (1974)
Instead of repealing bad laws because of unintended consequences, we pass more laws with more unintended consequences
Hayek focus: economic central planning
What else could this apply to?
Incarceration Rates
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Incarceration Rates
Judging Public Policy Trade-offs: Economic and Social Trade-offs
- Poverty reduction versus climate change reduction
- Minimum wage increase versus job growth
- Subsidized healthcare versus inflation in healthcare prices
- Higher public spending vs higher deficits and inflation
- Education vs infrastructure
- Inequality vs. income growth
Judging Public Policy Trade-offs: Economic and Social Trade-offs
- Defense vs social services
- Free trade: more jobs overall vs job losses in some industries
- Costs of immigration vs economic growth contributions of immigrants
- inequality vs economic growth
- Tax rates vs tax revenue
- Tax rates vs economic growth
Judging Public Policy Trade-offs: Economic and Social Trade-offs
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Laffer Curve: Tax Revenue vs Tax Rate
Source: Cato Institute
Judging Public Policy Trade-offs: Economic and Social Trade-offs
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Federal Spending Categories: 2024-2025
Judging Public Policy Trade-offs: Short-term vs Long-term Benefits
- Higher spending now vs. Higher taxes later
- More educations spending now vs. economic growth later
- More infrastructure spending now vs. economic growth later
- More regulation now vs. fewer, lower paid jobs later
- More consumption now vs. environmental issues later
- Lower immigration now vs. population decline later
- Higher taxes now vs. slower poverty reduction
Recap
Collective action problems and market failures
Government is not the only solution
Where government is the solution, trade-offs should be considered carefully including:
- policy benefits versus individual freedoms and human costs
- economic and social trade-offs
- short-term versus long-term benefits
The right solution in every case is to carefully consider all the trade-offs and make the best decision considering all aspects of the problem and potential solutions.
Authorship and License
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Source: University of Glasgow
