Why don't we trust politicians any more? It's (largely) our fault

In her article Why no one trusts politicians any more, Camilla Cavendish writes about ways of closing the gap between politicians and the people they are supposed to represent:

The usual proposals - tightening the ministerial code, properly regulating the revolving door between public office and business and stopping abuses of the honours system - would all help. But they will not address the deeper issue of eroding faith in government: the lack of accountability for failure. Financial Times, 29 June 2024

I agree.

[G]overnment bureaucracies non-self-evaluate. At a minimum, agencies with evaluative responsibilities are not invited to evaluate - they are kept out of the loop, their opinions unsought. At a maximum, government agencies actively suppress their own internal evaluative units and are discouraged from evaluating the beliefs and policies of other agencies. Why States Believe Foolish Ideas: Non-Self-Evaluation By States And Societies (pdf), Stephen Van Evera, Massachusetts Institute of Technology Political Science Department and Security Studies Program, 2002

Our politicians and bureaucrats can get away with this, because their stated goals are rarely expressed as meaningful, verifiable outcomes. They talk about vague, lofty ideals; or about policies, which are means to ends, rather than outcomes, which are ends in themselves, and which are more difficult to achieve. So low and entrenched are our expectations of our governments that even radical attempts to change things - see my previous post about injecting AI into politics - ask for no more than policy proposals when, in my view, we should be discussing, costing and prioritising policy goals.

That's not the whole answer

Another explanation for why our politicians disappoint is one that perhaps nobody in the media really wants to cite: the very high costs of becoming and being a member of a democratic government. These costs, borne by aspiring politicians and their families, include the intense, unceasing and merciless scrutiny of their current and past behaviour, the constant threats to their physical security and consequent the loss of privacy - which will continue when they leave office. The opportunity cost of entering politics has also risen in line with the relatively great financial rewards from alternative professions, such finance, the law, computing. As a result, the pool of potentially highly capable politicians who care about their country has shrunk. We are left with the mediocre, the thick-skinned, the power-seekers, the ideologues and the ones who cannot find employment elsewhere. There remain few who have any appealing long-term vision for their country.

A Social Policy Bond regime could help by taking away some of the powers of these democratic governments. Under a bond regime, governments would continue to do what they can do well: articulating society's wishes and raising the revenue for their achievement; but they would contract out the actual achievement of our goals to investors who would have incentives to achieve them efficiently and quickly. Politicians and officials would lose the power to allocate funding to their favoured bodies. That is a matter of resource allocation which in theory and practice has been shown to be best done by competitive markets.

AI enters politics

Some early applications of Artificial Intelligence (AI) are being reported. In the UK, Steve Endacott, or "AI Steve" is asking the constituents of Brighton and Hove to submit policy proposals:

Endacott created the AI candidate’s initial platform, for example, and the campaign wants to recruit 5,000 people to be “creators”—these are the folks who will have discussions with the chatbot—to surface potential policies. ...These people, everyday Brighton commuters, will review and rate AI Steve’s policies on a scale of 1 to 10. Source

I think asking people for their preferred policies is a missed opportunity: we should be asked what are our preferred goals. Policies are a means to an end. Very often they don't achieve their stated goals, or do so inefficiently and in conflict with other goals. For most of us, it's not policies that are important; it's how closely society's goals are met. (I've written to AI Steve along these lines.)

A political application of AI in the US looks more promising. Victor Miller, running for mayor of Cheyenne, Wyoming, has created a chatbot ("VIC") that would call the shots:

Miller fed VIC the supporting  documents - emails, public records, notices - from past Cheyenne Fity Council meetings... By analyzing these documents, Miller says VIC will learn to make policy recommendations, figure what's important and decide how to vote in council meetings. "It's unlikely that a human can read, say, 400-plus supporting documents between meetings," he says, "But VIC can do that[.] An AI Bot Is (Sort of) Running for Mayor in Wyoming, Vittoria Elliott, wired.com, 12 June 2024

A possible danger of injecting AI into politics is that it could be used to entrench existing inefficient and opaque policymaking systems by making them easier to work with. My hope is that it can help in the articulation, prioritising and costing of society's goals - a necessary condition for implementing the Social Policy Bond concept.

Social Impact Bonds: tradeability would change everything

I'm not a great supporter of Social Impact Bonds (SIBs), with which I've had no involvement. They came on the scene after my first presentations of Social Policy Bonds and differ in that they are not tradeable. This seemingly minor difference is actually critical, and I've explained why here.

So I agree with most of the aspersions cast on Social Impact Bonds by the authors of the paper excerpted below, which echo my own sentiments expressed here and here. However:

The introduction of a profit incentive fundamentally alters the relationship between the service provider and user. The principal client and dominant stakeholder of any given SIB is its financier, not those who receive the services it finances and whose voice rarely figures into any discussion. The motivation propelling private investment in SIBs is profit or return on investment, rather than assisting or changing the circumstances of citizens in need. ... This does not seem to trouble SIBs’ many proponents, who blandly assume that the interests of private financiers can be aligned with the needs of service users, and who are content to see the changing fortunes of citizens instrumentalized as payment triggers. SIBs thereby transform citizens into commodities....  SIBs exemplify the financialization and privatization of social and public policy; they reduce the rights of citizens both as service users and as a polity. A Critical Reflection on Social Impact Bonds, Michael J. Roy, Neil McHugh, and Stephen Sinclair, 'Stanford Social Innovation Review', 1 May 2018

Social Policy Bonds, being tradeable, can take a very long-term view: they can target goals that will depend on a shifting cast of investors for their achievement. Their goals can be meaningful not only to a clique of financiers, but to the public, who can participate in decisions about which goals shall be targeted and their relative importance. With such transparency about broad social and environmental goals, it is society as a whole who will be the principal stakeholders of a bond regime, and many will also be the direct beneficiaries of such goals as cleaner air, reduced crime rates, or similar large-scale goals that a Social Policy Bond regime can target. 

I also think Social Policy Bonds would not lead to undue profits, as implied by the paper and as could readily be made in a SIB regime. It's true that organisations would make profits if they are successful in achieving the targeted goals - that is, those goals that society wishes to see achieved. But, again, tradeability and the ability to target long-term goals, mean that the identity of service providers, whether those invested in the bonds or their agents, can change over time. (See here, for how Social Policy Bonds could lead to a new type of organisation, whose every activity would be aimed at achieving our social goals.)

And, because there would be no barriers of entry into investment in Social Policy Bonds, any profits would tend to be competed away over time between the bonds' flotation and their redemption after long-term goals have been achieved. There would be profits, but they would not be excessive. I don't agree with the authors of the paper that such profits would transform citizens into commodities, any more than paying teachers or nurses transforms schoolchildren or patients into commodities. 

All that said, I think SIBs could play a positive role if they serve as a stepping stone toward Social Policy Bonds. The danger is that their practical disadvantages might discredit the whole idea of contracting out the achievement of broad, long-term social and environmental goals to a protean cast of motivated investors.

Outlook: scary

Post number 1397, and as good a time as any to discuss policymaking and Social Policy Bonds. On both counts, I think the outlook is gloomy. I'd be less concerned about the fate of the bonds if there were any sign that policymaking were becoming more responsive to ordinary people's wishes and well-being. I don't see such signs, either in the country in which I'm currently based (the UK) or in the wider world. Government agencies and large organisations of every sort - corporations trade unions, universities, religious bodies, charities, etc - work hand-in-hand to further their own goals, which are very often irrelevant to the interests of the people they are supposed to represent, or actually in conflict with them. This divergence is replicated at the supra-governmental level.  

20 May 2024

Members of the Security Council observe a moment of silence in the memory of Seyyed Ebrahim Raisi, President of the Islamic Republic of Iran, aka as the 'Butcher of Teheran'. Source

 

 

The results of this divergence are apparent and disconcerting: 

• increasing inequality of income and (especially) wealth within countries, leading to a loss of faith in government in democracies and autocracies alike,
• extreme polarisation of political factions,
• environmental disasters, in the seas, rivers, climate etc, and
• increasing fears of a nuclear exchange.

Decades of all politicians' ignoring the wishes of ordinary people have led to a pervasive nihilism and learned helplessness as nobody thinks they can do anything to improve things at any level above the local.

The aim of Social Policy Bonds is to inject market incentives into the solution of our social problems. But the first essential element was to articulate and prioritise society's goals. Free, competitive, markets have been manipulated and undermined by big organisations, including government regulatory agencies, but even more crucially, there's little discussion of, or priority given, to society's wishes. Vague suggestions that more economic growth will solve all our problems are made, though even given the narrow definition of growth, as measured (usually) by GDP, the poorest in most western countries have benefited little from decades of it. Politicians, prisoners of their paymasters or their ideology, just don't identify with ordinary citizens.

Realistically, there's almost no chance that anything like Social Policy Bonds will be issued in the near future. There has been some interest in the non-tradeable version (with which I have no involvement) known as Social Impact Bonds or Pay-for-success Bonds, but nobody's made the leap to making them tradeable, which I regard as essential to the achievement of society's goals. My main worry now is about a nuclear exchange. The taboo against threatening use of nuclear weapons has recently been broken; the taboo against their use looks fragile. The other huge challenges - environmental and social - remain, but a sustained absence of a nuclear exchange is a necessary condition for addressing them. My forlorn hope is that some combination of government, NGOs, philanthropists and ordinary people, raise funds that would provide meaningful incentives for people to actually bring about (not simply to 'work towards') world peace. Applying the Social Policy Bond concept to that goal is my suggestion, though I'd welcome any gesture in that direction.