In Australia today, there is a ‘social policy establishment’ that defines what ‘social problems’ are and prescribes the policies needed to resolve them. It includes academics working in universities and research institutes, welfare state professionals, political activists working in the nonprofit sector, social affairs journalists and commentators employed in the media, and bureaucrats employed in federal and state governments to research social problems and advise ministers on the best solutions. Most of these people believe similar things and think in similar ways. They were educated in the same kinds of degree courses, reading the same books and internalising the same basic theories and perspectives. They interact regularly at seminars and conferences where they reaffirm the core ideas they share. They referee each other’s writings, award each other research contracts, and evaluate each other’s job applications. They often live in the same neighbourhoods, send their children to the same schools, and read the same newspapers and periodicals. Collectively, they ‘know’ what our society is like, and they ‘know’ what needs to be done to improve it. Six social policy myths, Centre for Independent Studies
These authors argue that inequality, for instance, is labelled a social problem when, in fact, it isn't a real one. I think their argument is valid so far as it goes. I agree that the group doing the labelling is too small narrow and unrepresentative, and I believe that widening this group would be an end in itself. But the main difficulty is that even when there is a wide consensus over what constitutes a social (or environmental) problem, there is very little linkage between the resulting policy and the problem's solution. Somewhere along the way, policies become corrupted. They generate interest groups that are adept at manipulating government action in their favour. So instead of addressing poverty directly, with explicit, clear goals the achievement of which they will be held accountable, government policies end up subsidising the wealthy (the western world's agricultural policies, for instance) or the destruction of the environment (agriculture, fisheries and transport policy).
This grotesque disjunction between what people what government to do and what it actually does is not so much a result of an unrepresentative group of people deciding what are social problems (though that is a factor), but rather a result of the way in which government bodies operate. In particular, there is no link between their effectiveness in achieving social goals, and how much they contribute to that achievement. They have no incentives to do well, nor to terminate failed policies. Indeed, if they are extremely successful, they are likely to be disbanded.
A Social Policy Bond regime would inextricably link the solution of social problems to incentives. Markets would allocate funding. And it would be in investors' interest to end disastrous, or even merely inefficient, programmes - in stark contrast to the current system.