Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 212
and immutable in the political process. It is an odd irony that political economists, who
stress the dynamic qualities of private markets and forces of innovation and new entry in
breaking down entrenched market positions (the “perennial gale of creative destruction”
in Joseph Schumpeter’s famous words 4 ), are inclined to view the political process in such
static terms and the role for policy innovations and policy entrepreneurs as so limited.
Notwithstanding the attractions of these arguments about the salience of ideas in the
policy-making process, it seems obvious that ideas cannot be abstracted from particular
political and historical contexts. Nor can “political market failures” of the kind
emphasized by Public Choice theory be discounted in many contexts. In particular, ideas
need a congenial political context if they are to take root. In other words, ideas without
supportive and salient political interests are likely to be doomed to political oblivion.
Thus, an appropriate conjuncture of both ideas and political context is required if ideas
are to be an important agent of change.
Interests
Public choice theory holds that the various classes of participants in collective decisionmaking
processes (politicians, bureaucrats, regulators, interest groups, the media, and
voters) should not be viewed as involved in the common and selfless pursuit of some
agreed set of public interest goals, but rather that collective or government decisionmaking
should be viewed as a kind of implicit market involving intricate sets of
exchanges between or among self-interested actors. 5 That is to say, actors will be
similarly self-interested whether they are acting in economic or political markets. Thus,
for example, in order to attain or retain political office politicians will find it rational to
fashion policies that exploit various political asymmetries: between marginal voters
(uncommitted voters in swing ridings) and infra-marginal voters; between well-informed
and ill-informed voters; and between concentrated and diffuse interest groups facing
differential political mobilization costs (collective action problems). Bureaucrats will be
motivated to promote policies that maximize their power, pay, and prestige. Regulators
will seek a quiet life by coming to accommodations with the interests they are suppose to
be regulating, and perhaps also enhancing their prospects of employment in the regulated
industry after their tenure as regulators (the “capture” theory of regulation). The media, in
order to maximize readership or viewing audiences and thus enhance advertising
revenues, will trivialize complex policy issues, sensationalize mishaps unreflective of
systemic policy failures, and turn over issues at a rapid rate with minimal investigative
follow-up in order to cater to readers’ and viewers’ limited attention spans (rational
ignorance).
On this view of the policy-making process, the iron triangle of self-interested
politicians, bureaucrats/regulators, and rent-seeking special interest groups (and the
media) would seem to be largely impervious to policy change. Whatever set of policies
currently obtains represents a form of “efficient” political equilibrium, no matter how
inefficient from a conventional welfare economics perspective. 6 In other words, there are
no “big bills left on the sidewalk” because somebody would have already picked them
up. 7
However, the conventional claim by many Public Choice theorists of the
disproportionate influence of concentrated interest groups in the political process raises