Values and Public Policy.

• Author: Pressman, Steven

Recent policy debates have been noteworthy for their narrowness, if for nothing else. Protagonists increasingly assume economic incentives are all that matter. If the incentives are right, problems will disappear; if not, public policy will create problems rather than solve them, For this reason the Clinton administration pushes term limits for AFDC so that government assistance does not create a welfare-dependent population. Likewise, economists advocate effluent taxes rather than prohibitions against pollution, and propose school choice as a way to introduce competition into public education and improve the quality of American schools.

Bucking this trend, the six papers in Values and Public Policy hold that paying attention to values is important in making policy, and that successful policy will have to alter public values and the ways people react to incentives. Perhaps the best summary of this volume (with apologies to Immanuel Kant) might be: "incentives without values are empty; and values without incentives are blind." Successful economic and social policy will require incentives and values working together.

Several papers emphasize the close interdependence between values, policy, and economic outcomes. Daniel Yankelovich maintains that values cannot be taken as given because economic changes affect public values. In the booming 1960s and early 1970s programs to remedy poverty and help minorities were viewed favorably by the American public. But as Americans became more concerned about their own economic situation, they grew less willing to devote resources to the problems of others and have come to expect something back from welfare recipients. In a similar vein, Nathan Glazer argues that demands for multiculturalism in public schools stem from the failure of Great Society programs to improve the economic condition of African-Americans.

Other papers in the volume go even further, arguing that policies which ignore incentives inevitably go astray, George Akerlof and Janet L. Yellen maintain that the economic approach to crime prevention pioneered by Gary Becker (enforcement dollars increase the risks of incarceration, thus reducing crime) is flawed because it ignores the fact that law enforcement depends on tips from civilians. If the public feels that criminal penalties are unfair, or if local residents fear alternative gangs more than local gangs, they will cooperate less with law enforcement officials as penalties rise. In these...