Policy vs. Meta-Policy

What is our main problem, bad policy or bad meta-policy? That is, do our collective choices go wrong mainly because we make a few key mistakes in choosing particular policies? Or do they go wrong mainly because we use the wrong institutions to choose these policies?

I would have thought meta-policy was the obvious answer. But CATO asked 51 scholars/pundits this question:

If you could wave a magic wand and make one or two policy or institutional changes to brighten the U.S. economy’s long-term growth prospects, what would you change and why?

And out of the 29 answers now visible, only four (or 14%) of us picked meta-policy changes:

Michael Strain says to increase fed data agency budgets:

BLS data on gross labor market flows … are not available at the state and MSA level, they do not have detailed industry breakdowns, and they do not break down by occupation or by job task. … We also need better “longitudinal” data — data that track individuals every year (or even more frequently) for a long period of time. … The major federal statistical agencies need larger budgets to collect the data we need to design policies to increase workforce participation and to strength future growth. … My second policy suggestion is to expand the … EITC.

Lee Drutman says to increase Congress staff policy budgets:

I would triple the amount the Congress spends on staff (keeping it still at just under 0.1% of the total federal budget). I’d also concentrate that spending in the policy committees. I’d give those committees the resources to be leading institutions for expertise on the issues on which they deal. I’d also give these committees the resources to hire their own experts — economists, lawyers, consultants, etc. But I’d also make sure that these committees were not explicitly partisan.

Eli Dourado says to pay Congress a bonus if the economy does well:

A performance bonus would help to overcome some of Congress’s complacency and division in the face of decades-long economic stagnation. … One good performance metric would be total factor productivity (TFP). … Fernald adjusts his TFP estimate for cyclical labor and capital utilization changes, making his series a better measure. … Members of Congress would earn a $200,000 bonus if the two-year period in which they serve averages 2 percent TFP growth. (more)

Robin Hanson says to use decisions markets to choose policies:

First, I propose that our national legislatures pass bills to define national welfare, and fund and authorize an agency to collect statistics to measure this numerical quantity after the fact. … Second, … create an open bounty system for proposing policies to increase national welfare. … Third, … create two open speculative decision markets for each official proposal, to estimate national welfare given that we do or do not adopt this proposal. … If over the decision day the average if-adopted price is higher than the average if-not-adopt price (plus average bid-ask spread), then the proposal … becomes a new law of the land.

It seems to me that Michael, Lee, and Eli feel wave pretty weak wands. Surely if they thought their wands strong enough to cast any policy or meta-policy spell, wouldn’t they pick meta-policy spells a bit stronger than these? (And why is it always more spending, not less?)

By focusing on policy instead of meta-policy, it seems to me that the other 25 writers show either an unjustified faith in existing policy institutions, or a lack of imagination on possible alternatives. Both of which are somewhat surprising for 51 scholars chosen by CATO.

Added Dec3:  3 of the 25 remaining proposals were in the meta-policy direction:

Susan Dudley:

[Regulatory] agencies should be required to present evidence that they have identified a material failure of competitive markets or public institutions that requires a federal regulatory solution, and provide an objective evaluation of alternatives.

Michael Mandel:

The Regulatory Improvement Commission … would have a limited period of time to come up with a package of regulations to be eliminated or fixed, drawing on public suggestions. The package would then be sent to Congress for an up-or-down vote, and then onto the President for signing.

Megan McArdle:

Instead of analyzing whether the [cost-benefit] calculations in a regulatory ledger sum to a positive or a negative number, we need to set a level of [regulatory] complexity that we’re willing to live with, and then decide which positive sum regulations we’re willing to discard in order to stay within that budget. … Crude rules which might well serve, like capping the number of laws and regulations, allowing a new one to be implemented only if an older one is repealed.

Added 30Sept2015: There are now 51 of these proposals, collected into a book. I found no more that are plausibly meta-proposals.

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  • Tiago

    My guess is that people reject the very idea of defending a change which would make them seem out of touch with political feasibility. That is, they reject the whole magic wand exercise and fall back to a question like “what do you think is a feasible policy/institutional change which would bring net benefits”.

    • oldoddjobs

      Bingo. Most people tailor their political beliefs to what is plausible over the next 5 or 10 years. At some level they might be anarchists, communists, whatever, but to “be” one of those things looks like a practical commitment to them and so they decide they are not that. I describe myself as an anarchist, but it’s pie in the sky stuff. On this view there is really no tension between believing in communism and voting Republican.

      • Cahokia

        Sure, but this a thought experiment initiated by a libertarian-leaning think tank. If these scholars feel like they can’t air their pie in the sky meta-policy proposals in a symposium like this, when can they express them?

      • oldoddjobs

        Good point

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        “Most people,” probably, but here, clearly, most CATO selected economists. [We can probably generalize further than that.]

        Near-mode, far-mode, again. Meta-policy is far; imfeasible policies are far; extensive changes are far. Economists (R.H. excepted) would appear to have a near-mode orientation.

    • diversity trainer

      Maybe, but that doesn’t explain these results. You can have feasible meta-policies too. And if you can’t, then why advocate meta-policy?

  • arch1

    Maybe they’re just prudently risk-averse. Meta-policies tend to have broader, longer-lived, and arguably harder-to-predict impacts than policies. (And the wand only works once, so its wielder can’t undo the spell, or disappear in a puff of smoke, if the wheels come off:-)

  • IMASBA

    I don’t think there are simple solutions. In my view a lot, perhaps most, of the problems in the US are either out of the control of the government or caused/worsened by what elected officials choose to do. Some of that can be remedied by severe reforms in the American election processes (the district system is simply retarded, it’s almost an invitation to have only two major parties and to commit gerrymandering), but some of it is just too intertwined with American culture (if people want to vote for a candidate who believes the Earth is 6000 years old there isn’t much you can do about that within 30 years) or just comes with the territory of having a democracy or even any form of government/rulership. Politics is not only about selecting the bes policies, or when there are multiple “best policies” to ask what the public prefers, it’s also about maintaining a sense of community and it’s okay if that costs you some economic efficiency, though in the US it seems to be costing a lot more than necessary.

  • joeteicher

    CATO didn’t ask me but given the wand I would make myself dictator for life. If nothing else I could improve long term growth through acquisition of territory.

  • brendan_r

    I’m reminded of your debate with Moldbug, a guy who agrees with you on the need for meta reform, but nonetheless is too into his own hobby horse to evaluate PM’s rationally.

    Imagine if it was revealed that during Apple’s meteoric rise during Jobs’ second tenure he covertly used prediction markets extensively. Look, here’s this cool, esoteric sciency thing that the dead visionary Saint Jobs used at Apple which has concretely made the world a better place! The PM meme might explode w/ a Big Win like that.

    It’s hard to imagine a success in government, or in a more mundane business (Wal-Mart) triggering much popular enthusiasm.

    And you need popular enthusiasm because, well, look at the droll recommendations from academics above.

    What about Sumner’s NGDP futures targeting effort? What if implemented and no recessions in the US for 20 years…would that provide the Big Win PM’s need to proliferate?

    If PM’s have proliferated inside government 50 years from now, do you have a guess at the most likely path?

  • David Condon

    I strongly agree with the need for better meta-policy. My suggestion would be increased accountability. Each aspect of government should have a small group of people directly responsible for it. These should be individuals appointed by the President and approved by Congress, similar to the Supreme Court, the Joint Chiefs of Staff, or the Federal Reserve. A health policy board might have complete discretion over who and what to cover. The social security board would be responsible for all retirement income decisions. The Federal Reserve might be allowed to change banking rules. The EPA would set all environmental regulations. In many ways, this is the direction we’re already headed, but that’s only by default. There’s no way for an organization in which 500 people can always blame the other guy to ever function properly.

    • oldoddjobs

      Create thousands of public sector “accountability” jobs, sure. What could possibly go wrong?

      • David Condon

        There would be no need to create new jobs. It could be done with a reallocation of power among existing jobs. I expect what could go wrong are the same things that currently go wrong with the Fed, SCOTUS, and the Defense Dept; all of which I consider a substantial improvement over Congress.

    • brendan_r

      The Federal Reserve is the agency that looks most like this and it’s performance has demonstrably improved in the last 90 years. It learns, slowly. Have another agencies improved on average? our foreign-policy decision-makers have had quite a decade!

  • IMASBA

    So is there a special place in heaven for the citizens of the country with the biggest GDP? Or a pot of gold at the end of the rainbow for the head of government/state of that country?

    Total GDP doesn’t matter, how much wealth is available to the general population (not just the 1% of the 1%) is what matters. You won’t find a single metric that captures this well.

    • Marcel Soanes

      Median income, or GDP adjusted by the GINI coefficient.

      • IMASBA

        A high median income can still leave a very poor underclass. Adjusting GDP with the GINI coefficient always means you can put a lot of emphasis on one and very little on the other one to get a good looking number for the combined metric.

      • oldoddjobs

        What metric do you use to define “very poor underclass”? Presumably one which distinguishes the ” very poor” of the U.S from the “very poor” of, say, India. Just how misleading do you reckon the commonly used metrics are, and will you remain unsatisfied until a metric emerges which tells us we are actually all poor?

      • Charlene Cobleigh Soreff

        True, but in the US, median income has still been a better metric for how the typical person is doing than GDP. Real median income peaked around the late 1990s, while GDP is still overcounting how the 1% are doing.

      • IMASBA

        Right, but it’s still not good enough as a single metric (you need to keep track of multiple metrics and having democracy is a way to do that). Too much emphasis on median income leads to what we heard in the last US presidential election: our eardrums getting bombarded with the word “middle class”, while there was almost no mention of the working poor.

    • diversity trainer

      Technically this could be right but in practice it’s not. The 10th, 50th and 90th percentiles of the GDP distribution in various countries have been found to be ranked pretty similarly. I also remember hearing that HDI and GDP per capita aren’t too far apart either.

      This just won’t go far enough to really jam up to the works, for that you need to move to something like my values…

      http://slatestarcodex.com/2014/10/28/open-thread-7-the-hunt-for-thread-october/#comment-156472

      • IMASBA

        You’re thinking from the present situation: if a country started focusing almost exclusively on increasing total GDP (which, relative to other developed countries, the US does and it has more inequality to show for it), including bonuses for parliament coupled to GDP growth, things might very well change. Compare it to how if you rate a school almost exclusively on test scores the school will start to narrowly teach the tests.

  • Derp

    By focusing on policy instead of meta-policy, it seems to me that the other 25 writers show either an unjustified faith in existing policy institutions, or a lack of imagination on possible alternatives.”… Or the writers are just making an ev calculation on what response might increase their social status/personal benefit the most if attributed to them in a public setting.

  • chaosmosis

    Nobody mentioned campaign finance reform? Or is that somehow outside of the topic?

  • http://juridicalcoherence.blogspot.com/ Stephen Diamond

    I would have thought meta-policy was the obvious answer.

    I wonder whether you would have said this before you thought up prediction markets.

    • oldoddjobs

      I wonder whether you would have written this comment before you thought of it.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        Was I unclear? The question is whether R.H.’s preference for meta-policy depends on his particular meta-policy innovation (versus, perhaps, “leaning” toward meta-policy).

      • brendan_r

        Have his premises and reasoning changed?

        I’m thinking of the macro econ realm where you see stuff like:
        -I’m against QE because it’ll produce hyperinflation (prediction fails)
        -I’m against QE because it actually has no effects whatsoever (prediction fails)
        -I’m against QE because it produces asset bubbles (almost unfalsifiable) and inequality, etc.

        Premise/reasoning consistency over time is a rough, easy way to check for motivated reasoning.

      • oldoddjobs

        It was a joke, but I meant it. 😉

  • Grant

    A focus on meta-policy seems unique to libertarians, communist, and other ‘radical’ political movements. Mainstream pundits seem to prefer to focus on more mundane policy issues. Maybe they don’t want to be associated with radicals?

    Or maybe they did not think meta-policy changes were acceptable answers?

  • Daublin

    Our biggest mistaken policies do not need an army of analysts to understand.

    Imagine doubling the amount of design time spent on the details of Obamacare. How much better would the computers work? How much would they have managed to keep labor participation up, without sacrificing core elements of the design?

    Imagine doubling the effort on fancy sounding energy investments. Would the country do that much better?

    Imagine doubling the effort spent on allocating funds to scientific projects. How many of our choices would change?

    Imagine doubling the size of the CDC. How much cleaner and safer could we possibly make modern life?

    Imagine doubling the size of FCC. Would Internet improvements start happening faster and more expeditiously, or would it be even more clogged up than now?

    I don’t think going meta will help much. We need to make better decisions at the gross level–mostly, the decision *not* to do something.

  • blogospheroid

    Not sure if it’s late to post this, but Megan Mc Ardle’s contribution also looks like a meta-policy more than a policy, creating a regulatory “budget” where your overall “complexity points” are bounded.

    http://www.cato.org/publications/cato-online-forum/rolling-back-regulatory-complexity

  • http://juridicalcoherence.blogspot.com/ Stephen Diamond

    Metapolicy recommendation: Abolish first to the post voting; replace by proportional representation.

    American citizens are mired in two decrepit political parties. This is substantially due to our voting procedures.

    • IMASBA

      And make it proportional representation of as large as possible constituencies: national for the presidency, statewide for congress.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        Better yet, get rid of the states in favor of rational administrative units. [But I guess that would count as a separate wish.]

  • http://overcomingbias.com RobinHanson

    I added to the post.

  • Steve Wallis

    We’ve developed an objective method for evaluating the internal structure of policy models (metapolicy, meta-policy, call it what you will – its a game-changer). While research and practice are still in the early stages, this new approach suggests that we may have the ability to predict the effectiveness of policies from a previously unaddressed dimension. A recent example here: http://meaningfulevidence.com/wp-content/uploads/IPA-of-POTUS-candidates.pdf