One of the justifications I make for the time I spend blogging is that it gives me a chance to try out arguments I use in my work. With that in mind, I’d very much appreciate comments on this short summary of the role of ideas and interests in explaining policy outcomes.
Economists seeking to explain policy outcomes use three main theories, sometimes explicitly and sometimes implicitly. These may be referred to as the public interest theory, the private interest theory and the ideological theory.
The public interest theory is rarely stated explicitly, but is implicit in much of the normative analysis of policy options. The central hypothesis of the public interest theory is that governments adopt policies that will maximise social welfare, subject to random error cause, for example, by ignorance about the issues. The utilitarian case for democracy is based on the argument that a government responsible to a democratic electorate will have an incentive to weight the interests of all voters equally, and will therefore promote the public good.
The private interest theory is commonly presented in conscious contrast with the public interest theory. The central hypothesis is that political outcomes are determined by interactions between interest groups, and that the relative weight of interest groups will determined by factors such as the effectiveness of their organisation, rather than by their significance in relation to some well-specified social welfare function. Marxism (at least in its simple ‘vulgar’ form) and public choice theory share this central hypothesis, along with some versions of liberal pluralism.
The ideological theory is most commonly associated with Keynes’ dictum that soon or late, it is ideas, not vested interests, which are dangerous for good or evil…” (General Theory, page 570)” On this view, it is changes in beliefs about the merits of policies such as privatisation, as opposed to changes in the actual costs and benefits or in the relative weight of competing interest groups, that do most to explain changes in policy outcomes.
Unless ideas are regarded as evolving independently of the real word, the ideological theory tends to reduce, in the long run, to some mixture of public interest and private interest theory. If ideas about the desirability of policy are adjusted in response to evidence (cf Keynes – when the facts change, I change my mind. What do you do?) then the public interest theory will be valid in the long run. If changes in ideas are determined by the rise and fall of dominant interest groups (as in many Marxist models, and in Schumpeter) private interest theories will be valid in the long run, even though people may believe themselves to be acting in the public interest.
{ 11 comments }
bad Jim 03.07.04 at 8:55 am
If California’s most recent election results are any indication, ideology is made to measure by the group with the wherewithal to produce and air the most television commercials.
It’s clear that taxes are toxic and not to be countenanced under any circumstances. What is not clear is that the public interest was any part of that consideration.
sennoma 03.07.04 at 8:56 am
That last paragraph is eerily reminiscent of Popper-vs-Kuhn discussions of how science works. It even seems to lend itself to a similar pragmatic bottom line. Those who lean towards Popper argue that a strongly Kuhnian view cannot explain the real-world success of science. Likewise, perhaps if one can argue that policy changes have created an overall increase in social good, one can infer that public interest theory has the edge?
enthymeme 03.07.04 at 11:31 am
Those who lean towards Popper argue that a strongly Kuhnian view cannot explain the real-world success of science. . . .
http://www.sfu.ca/~boland/wien02.pdf
might interest you.
Skip 03.07.04 at 12:47 pm
My view of the interest group theory is that it helps explain the failure of the first theory, on an unfortunately large set of policies. But I don’t think it refutes the public interest theory so much as it demarks its limitations.
Ssuma 03.07.04 at 1:08 pm
I like this formulation but what are you planning to do with it? At the end you seem to be trying to figure out the circumstances that would lead to pure public interest-based politics or pure private interest-based politics. That is not a discussion which particularly interests me. (Of course mine is just a private interest, and maybe not even your private interest) You suggest that if Keynes is entirely right it is one and if Marx is entirely right it is the other but I think neither of them is entirely right.
I am interested in how ideology mediates between public and private interests to create the political world we actually see. How can this 3-part division of yours be used to explain an actual case? I think a more practical take would be of greater public interest. Is that the direction you want to go? I for one like the less theoretical direction.
Also, since this seem like a good a simple idea I assume that someone has tried something like this before and there is a whole literature on it.
Henry 03.07.04 at 5:07 pm
The nicest overview of this question I’ve seen is
Peter A. Hall. 1997. The Role of Interests, Institutions, and Ideas in the Comparative Political Economy of the Industrialized Nations. In “Comparative Politics: Rationality, Culture and Structure,” edited by Mark I. Lichbach, and Alan S. Zuckerman. Cambridge: Cambridge University Press.
Peter’s earlier book, “The Political Power of Economic Ideas: Keynesianism Across Nations,” Princeton: Princeton University Press, 1987 is obviously a little old at this stage, but also has some good stuff.
Stentor 03.07.04 at 6:43 pm
I would think that the role of ideas is to mediate between the structural reality of interest groups and the normative appeal of the public interest. Pretty much any interest group will tell you that the policy they’re pushing is best for society as a whole. And their opponents will try to attack them as promoting a private sectional interest — saying that their ideas’ promotion of a private interest is for that reason invalid. The goal of democracy is to even out the playing field and eliminate non-discursive means of influencing policy, so that in order for private interests to get their way they have to sell themselves as conducive to the public interest.
john c. halasz 03.08.04 at 12:59 am
This may be already assumed in your 3 alternatives, but, as a fourth consideration, are there not real structural constraints, pressures and crises that drive the salience of policy questions, such that proposals ultimately have to be balanced out to be efficacious, or they risk worsening any problems that may purport to be “solved” and exacerbate and ramify the structural dilemmas? So policies that are either too narrowly sectoral in subordinating particular to general interests or simply ineffective in getting at the roots or sources of a perceived problem- (perhaps out of an interest in evasion)- will result in policy failures and it would be dealings with the consequences of policy failures that drives the alteration of policy conception frameworks.
lesley 03.08.04 at 5:40 am
I know little of economic theories. But policy experience tells me that in a practical sense the answer is various formulations, and relative strengths and interconnectedness, of all the above. Ideology can play a role in binding otherwise contentious parties, or forcing apart erstwhile fellows. Public interest–and yes, for all the cynicism, policy-makers, most of whom genuinely are trying to do the best they can for the public, with limited information, time and resources, do consider the general public good as best they are able–can sometimes be the overwhelming consideration. Private interests naturally may influence structure, process and decision–that’s often as much to do with decision-makers drawing on locally available information under pressure of time and politics as much as anything. I prefer to think of it as spheres of influence intersecting on specific issues at specific times, with specific players and specific sets of information available. The delineation between ideology, public and private interests I find too simplistic for the complexity of the process. Then, too, ‘the public good’, like ‘the national interest’, is a changeable beast. Policy adapts to society adapts to policy, whether driven by private or public interests. Having said that, there probably is a tipping point
. where overwhelming attention to private interests degrades the public good–Saddam’s Iraq comes to mind,
. where overmuch attention to a consensual perception of the ‘public good’ undermines the ability of a society to move forward and react quickly to environmental change,
. where ideology, divorced from reality, simply ignores both internal and external environment, public and private interests.
toni wuersch 03.08.04 at 6:09 am
The language of “interest” to me mixes up two groups: the group who benefited from a policy when it was applied; and the group on whose behalf a policy was approved before it was applied.
Ruth Garrett Millikan covers “interest” (she calls it “function”, as do sociologists such as Parsons or Luhmann) in her book “Language, Thought and other Biological Categories.”
Millikan says one should find the “normal function” of a capability in the reason that capability is reproduced, not by looking at past cases of use to “refute” claims.
For instance, the normal function of a screwdriver is to tighten or loosen screws, even if a screwdriver was once drafted into service as a door jamb when nothing better was around.
“interest served” by a policy corresponds to Millikan’s notion of “reproductive motive” or “normal function”, but the “interest who benefited” from a policy application is not always related to “interest served”.
I’m assuming the cynical definition of policy as a scam on its beneficiaries isn’t taken as a driving reason to set it.
chris borthwick 03.09.04 at 3:25 am
One aspect of the way the world works seems to me to have been very much underplayed in political science and management theory.
Let us imagine you are in a position of power. A proposal comes to your desk. One of the options is obviously sensible, is supported by the data, and comes with the recommendation of your experts. One is less satisfactory. One is plainly an almost total wipeout. What do you do?
If you do the sensible thing, you are doing what anyone could do. You don’t need power for that. If you want to demonstrate to others that you have power, you have to take a decision that nobody in their right mind would take and push it through against unanimous opposition.
This is in some ways in line with the present trend in evolutionary biology, which explains survival handicaps such as the peacock’s tail by hypothesizing that it is a way of demonstrating to potential mates or rivals that you have such potency that you can cope successfully with enormous self-imposed handicaps.
At some point this comes up against the imperatives of simple survival, but if you are Stalin or a top manager in a large corporation you have a very wide range of action before you reach this boundary.
If accepted, this theory explains quite a lot — perhaps too much, in fact; as in evolutionary biology, it means that any decision, good or bad, can be accounted for under one arm of the theory, making it virtually irrefutable and in Popperian terms trivial.
Comments on this entry are closed.