In an excellent article Deborah Coddington wrote:
“…encouraging voters to look to gummint for the good life is a futile exercise. No one in their right mind would willingly assign their choice of car, design of house, style of dress, or gardening habits to their local MP.
To preserve the New Zealand Quality of Life, it’s to ourselves we should look, not a bunch of representatives in one or another political party.”
I agree. Too often every perceived problem is met with an outcry for the government – or my preferred, gummint – to do something.
As a broad statement I think the business of the government is to set the boundaries for social and economic activity and to provide public/welfare services that we want/won’t pay for left on our own.
Policies lead to changes in behaviour. If the policies are very narrow and specific, unintended consequences pop up somewhere else, like a bad 1980s waterbed (eg as James wrote). But that is what we risk if we ask the gummint to regulate and intervene for all perceived problems.
In an obliquely related but nice article about central banking and transparency on the BBC website, Linda Yueh describes:
“…Goodhart’s Law says that a variable that is used as a policy target quickly loses its reliability as an objective indicator.”
Politics is about compromise. But sometimes they pull in opposite directions. Observe the current debate on housing affordability. In practice, the goal is for the politicians to drive ever higher prices for existing home owners, but falling house prices for first home buyers.
Thanks to this twin and opposing objectives we are seeing a mess of policy announcements, ranging from subsidizing first home buyers, to lowering development contributions, but very little tie back to the root causes (which I suspect rest with arcane urban planning policy).
In reality the analysis and discussion need to be about preferences, technology and resource constraints. Only by understanding fundamental drivers can we formulate lasting policy solutions.