The unimportance of competence

There's a long list of criteria by which people judge for whom we'll vote, including: ideology, personality, public image (including looks), racial or religious identity, charisma, height, or simply how prominent a candidate is in the media. Way down the bottom of this list would be competence. This is partly because we rarely look back over candidates' records - nor even that of the administrations of which they were members. Admittedly, because of the large number of variables and society's complexity, it's difficult to ascribe outcomes to recent individual performance. I think we could do better.

I believe we'd all benefit if we were offered a choice of outcomes, rather than one of political parties or candidates, many of whom can get away with talking only vaguely about what they hope to achieve in office. A Social Policy Bond regime would do this; people would choose the outcomes they wish to target and their priority. This would have many benefits. First, it would change the way in which we judge administrations: competence would shoot up the list of criteria by which we judge an administration. Second, it would get us used to the notions of trade-offs and opportunity cost when choosing which goals we should target. Third, it would drastically shrink the role of government in allocating funding; not theoretically a goal in itself, but given the temptations and actual corruption scandals, even in relatively less corrupt countries, it would contribute to more efficient government. Under a bond regime, government would relinquish its role in allocating funding to public- and private-sector bodies: this would be done by investors in the bonds, whose over-arching goal would be the efficiency with which society's social and environmental goals shall be achieved. Markets, in economic theory and on all the evidence, are the best way of allocating scarce resources. But government would still have important roles doing things that only it can do: articulating society's goals and raising the revenue that would reward those who achieve them.  

There would be other benefits. Policymaking would be more transparent. And there'd be a far more direct link between stated policy objectives and the activities undertaken to achieve them. So that, say, if we collectively decide we want to do something about cleaning up the environment, an Environmental Policy Bond regime pay people to clean up the environment. If we want to reduce crime rates, we'd reward investors in crime reduction bonds only when crime rates have fallen. 

We need to target outcomes, rather than wait decades for government to agree on what's required and then make policy that might, or might not, do something to achieve it. What is important is not how our urgent social and environmental problems are solved, nor which body shall try to solve them, but that they are solved. Social Policy Bonds are one way of getting government to focus on what we as a society actually want to achieve and out of the business of identifying genuinely (or not) difficult scientific and social relationships. The first is something that democratic governments can actually do quite well. The second is something that markets do much better, because scientific and social relationships are complex and ever-changing, and because incentives are crucial.