Malo periculosam, libertatem quam quietam servitutem.



January 2017

Three Cheers for Process Reform

Written by , Posted in Legislation, Liberty & Limited Government, The Nanny State & A Regulated Society

Outside of election season, few people really pay attention to what happens in Washington DC. Start talking about “process reform” and the average citizen completely tunes out. That’s unfortunate because the how of policymaking is often more important than the who.

Public choice teaches us to look at the incentives and institutional constraints placed on elected (and unelected) officials in order to understand how they are likely to behave. This is of practical import. If we want to compel government to live within its means, for instance, then applying public choice theory we know to direct our efforts toward the creation of a debt break or other spending cap, rather than naively thinking it is sufficient simply to elect politicians claiming they will be more responsible. The reason the latter doesn’t work is because politicians are incentivized to seek reelection, and showering various constituencies with taxpayer dollars remains the best way to go about it (we could drill down deeper, if we desired, into things like the problem of concentrated benefits and dispersed costs to further understand why electoral mechanisms are unlikely to enforce spending restraint).

There are a great many reforms that are needed if the nation’s many policy-related problems are ever to be solved. Thankfully, there seems to be enough awareness of this fact that some key process reforms are moving forward. One of them is the REINS Act, which was passed by the House last week, and attempts to solve the issue of excessively expensive and numerous regulations. Recognizing the fact that career bureaucrats have an incentive to grow their power and to ignore the costs imposed on society by doing so, the REINS Act requires Congress and the president to approve regulations with significant economic impact before they are finalized.

It understandably has the left freaking out, as the REINS Act would return to Congress a bit of the lawmaking power that has long been delegated to unaccountable regulators–power which the left has exploited to insert government into every aspect of our lives. And while Congress carries its own set of perverse incentives, looping legislators into the rule-making process adds an obstacle to the promulgation of new regulations that should hopefully prevent some of the more onerous and destructive rules from ever coming to fruition.

The REINS Act reforms Congress as much as it does regulatory agencies. Under the current system, legislators can hide from electoral accountability by delegating more and more of their responsibilities to unelected bureaucrats, who they then campaign against. By restoring the role of Congress in filling in the details for new laws, legislators cannot as easily duck electoral responsibility for agency actions.

Other regulatory reform efforts are also proceeding concurrently. But there are other areas that can improve from process reforms as well.

One of those is the electoral system. There’s been renewed interest in the topic post-election, though most of it is motivated by the particular partisan circumstance of recent elections and directed in unhelpful ways.

Hillary supporters are focused on the fact that she won the popular vote but lost in the electoral college. Ignoring that we don’t actually know how the campaign would have unfolded were the goal different from the beginning, they are focused on the wrong reform. The real tragedy of 2016 is that despite two major party candidates with historic unfavorables, and an electorate in which a plurality of 43% choose not to belong to either major party, the major party nominees still secured 94.3% of the vote.

Why did this happen? Because the voting system we have chosen compels it to. See Duverger’s law for the full explanation, but the short of it is that our first-past-the-post voting system (pick one, winner take all) incentives voters to vote against their most hated candidate instead of for their most liked one.

Interestingly, this same election also produced a tiny step toward a new (and I’d argue better) system. Maine passed a ballot initiative to implement ranked-choice voting for all statewide elections (though not federal House, Senate, or presidential campaigns). It works by having voters rank their top choices in order. If no candidate breaks 50 percent, the candidate with the least first choice votes is dropped and the ballots recounted. This continues to happen until a candidate reaches a majority. If such an approach had been used in the presidential election, as an example, voters could have supported a candidate outside the Republican-Democrat duopoly without fear that they were inadvertently supporting Hillary or Trump depending on which they loathed more.

But that’s not our voting system, and so we are left with the most unpopular president ever elected. Process is destiny.