Two ways of overcoming government failure

Everyone seems to agree that most, if not all, policy problems have their roots in politics. 

That is why you often hear that a particular policy will not be implemented because there is no “political will.”  Seemingly anti-poor policies and outcomes—untargeted and costly fertilizer vouchers in Tanzania, 99 percent leakage of public health funds in Chad, 20 percent teacher absenteeism in Uganda, 25 percent unemployment in South Africa—persist.  Yet these are countries where the median voter is poor.  A majority doesn’t vote in favor of policies that will benefit the majority.  Why?

The explanation lies in the large number of “political market failures” in these democracies—situations where for various reasons, such as ethnicity or lack of information, people vote along lines that are different from outcomes such as health, education, agricultural productivity or jobs.  Knowing these voting patterns, or indeed feeding them, politicians campaign on other issues (or on platforms that perpetuate these policies)—and get elected. 

What can be done in these situations?  One is to take these political market failures as a constraint and work around them.  For instance, South Africa is piloting wage subsidies to young people as a way of stimulating employment without violating labor regulations or union-negotiated wages. 

These are examples of what Jim Robinson calls “politician-proof public policy.”  They don’t always work.  An attempt to reduce health-worker absenteeism in India by introducing time-date stamp machines to record attendance failed when, the night before the program was to start, all the machines were vandalized.

An alternative is to address the sources of political market failure directly, through non-partisan interventions.  For instance, if the problem is that voters are poorly informed—they don’t know that political inaction or corruption affect their daily lives—why not help them become better informed?  Why not publish data, in accessible form, about the health and education outcomes of each politician’s constituency, and how the government is performing in improving these? 

This approach may not lead to the precise, desirable policy reform, but it will improve the system so that poor people are more likely to vote for a politician who advocates policies that are in their interest.