A Theory of American Governance

Yglesias finds the bottom line: if rich people want safe air travel, we get safe air travel. If they want loose regulation on finance, we get loose regulation on finance. It's all about influence.--SS

A Theory of American Governance:

Francis Fukuyama has one:

Conversely, I would argue that the quality of governance in the US tends to be low precisely because of a continuing tradition of Jacksonian populism. Americans with their democratic roots generally do not trust elite bureaucrats to the extent that the French, Germans, British, or Japanese have in years past. This distrust leads to micromanagement by Congress through proliferating rules and complex, self-contradictory legislative mandates which make poor quality governance a self-fulfilling prophecy. The US is thus caught in a low-level equilibrium trap, in which a hobbled bureaucracy validates everyone’s view that the government can’t do anything competently. The origins of this, as Martin Shefter pointed out many years ago, is due to the fact that democracy preceded bureaucratic consolidation in contrast to European democracies that arose out of aristocratic regimes.

That seems descriptively correct to me. A case in point is the endless problems caused by the congressional confirmation system even though research keeps showing that relying more on high-level civil servants would produce better-run agencies over and above the benefits of reducing the quantity of nomination follies. But a causal account ought to explain not only why American democracy produces worse governance than British democracy, but better governance than Italian democracy. I'm not sure that the sequencing theory can, in fact, explain that. It also seems notable to me that America's largest public agency, the military, is absolutely the best in the world. I don't think it's a coincidence that its also an agency that's run along more professionalized more "European" lines. Elected officials influence which senior military officers get which assignments, but fundamentally all senior military assignments go to professional military officers. And increasingly presidents have chosen to appoint senior military officers to run other agencies whenever it's plausible. So it's not as if it's impossible for the American political system to hit upon the high-level equilibrium.

I'm a big fan of Paul Romer's essay (PDF) that draws a different kind of contrast between the way the FAA regulates aviation safety and the way OSHA regulates workplace safety and the implications for financial regulation. In this context, I think the issue is that there just aren't any socially, economically, or politically influential actors who want civilian aviation to be unsafe. Airlines know that the public's irrational fear of airplanes is a business problem for them and so despite disagreements around the margin embrace the goal of making air travel safe. Financial regulators operate in a very different context where there are plenty of socially, economically, and politically influential actors who don't want macroprudential regulation to be done properly. Given that, we're not going to get it done properly.