At the end of last month Stephen Tall posted an essay entitled A liberal approach to evidence-based policy making on his blog. The essay had originally been submitted for last year’s CentreForum essay competition on The Challenges Facing Contemporary Liberalism but, for whatever reason, hadn’t appeared. I keep meaning to write a response to Stephen’s post, but I don’t seen to have managed it yet.
More to the point, I submitted an essay to the CentreForum competition but it wasn’t ever going to be published in that form. There is the possibility that I might develop a longer version of the argument. But I’m not sure when that’s going to happen. In the meantime I thought I’d follow Stephen’s lead and post it on the blog, rather than let it languish. So here it is.
Governments have traditionally relied on “shove”. When market failures result in inefficiency governments have used regulation to “shove” economic actors in directions perceived as socially beneficial. This is a relatively blunt instrument. More recently, policymakers have been persuaded of the power of fiscal incentives. Taxes, subsidies, and manufactured markets have increasingly been the preferred shoving mechanism.
Similarly, many liberals have robustly, but not uncritically, advocated choice and competition in the reform of public services. This is an attempt to capture the benefits of market mechanisms without wholesale privatisation. Some of the enthusiasm for this approach flows from a desire to combat the inefficiencies inherent in monopoly provision and the risks of government failure.
Concern about the cumulative burden of individually well-intentioned regulations is evident in the Orange Book. In addition, not only were market mechanisms within public services advocated but also manufactured markets to achieve environmental policy goals.(1) The subsequent decade has seen the embedding and extension of Better Regulation and the creation of substantial artificial markets such as the continent-wide European Emissions Trading Scheme.
Much can be said about the success, or otherwise, of these initiatives. But I want to explore the broadening of the policy agenda. Concern with market failure and government failure is longstanding; over the last decade it has been joined by a concern with “individual failure”. Indeed policy in some fields has become rather preoccupied with individual failure and “behaviour change”. The agenda poses potential challenges for liberals. [Read more…]