Closing the gap

This is the first section of a longer piece intended for publication. It will be followed by sections on: the need to express policy in terms of outcomes; and Social Policy Bonds

The gap between politicians and public 

There’s a large and growing gap between politicians and the people they are supposed to represent. This has always been true in autocratic countries, but it is now also a feature of democracies. I believe this stems from the increasingly opaque ways in which government works, such that the only people who can follow policymaking closely are politicians themselves, lawyers, well-off corporations or their lobbyists. Our policymaking process is so obscure, so unknowable by ordinary people that the alienation between politicians the public is inevitable. Whether this is intentional or not, is not the point; more important is that no politician wants to make it more transparent. Such a system is ripe for gaming and manipulation, but even when working according to the letter of the law, it inherently favours those who have the time and inclination to involve themselves - or their paid agents - in the minutiae of the policymaking process. Any link between what politicians say, and what ordinary people actually experience is undetectable.
Knowing this, we are reduced to choosing our representatives on the bases of their campaign promises, looks, ability to produce superficially convincing soundbites or, perhaps most portentous of all: identity. That is, those of the electorate who can be bothered to turn out to vote; the rest of us have taken on the learned helplessness that is characteristic of subjects that come to believe that their lives can neither be improved nor avoided. The result is clear, even in democracies: disenchantment with our leaders, mistrust and cynicism, and the disturbing drift toward authoritarianism and demagoguery.

I believe this his happening because our policymaking system focuses on concerns that have little obvious relevance to members of the public: institutional structures and funding arrangements, law changes, and macroeconomic abstractions. Oracular pronouncements of lofty goals are sometimes heard, but nothing can be pinned down and nobody takes them seriously. It is almost as if political systems the world over, whatever their origins, ere purposely designed to alienate the public. It’s hardly surprising then that there’s a strong demand for the sort of sloganeering that is often inflammatory and dishonest, but does at least express ordinary people’s concerns in language we can understand. 

The system’s complexity makes it difficult to share policy decisions and dilemmas with non-members of the political caste. As with any profession, as specialisation increases, so does the difficulty of communicating with the public. This matters more with politics than other professions with politicians, because their decisions affect all of us. The mistrust is mutual and self-perpetuating, so that now the most fundamental notion of policymaking - that all policy choices will create winners and losers - is never communicated to the public, because we’d see it as a lie or a self-serving admission of incompetence. We don’t trust politicians, we don’t understand their language, so why should they bother us with unpalatable truths? 

It’s essential, I believe, to close the trust gap, mainly because doing so would increase our buy-in to the policy decisions made on our behalf. The trust gap would narrow if people other than politicians, wealthy corporations and lobbyists could follow and have some say in the policymaking process. But the policymaking system’s opacity and complexity make it unattractive to people who work outside it. And one big reason for that, I believe, is that policy is formulated in terms that are of little interest to non-specialists. 

What money can't buy

The implicit target of almost all policymaking is to maximise either national income, expressed as GDP, or things that national income can buy. The weaknesses of GDP as an indicator of societal well-being are well documented. A huge flaw is that it fails to capture contributions to well-being for which there is no market. Hence:

No less fundamental than its source, then, are questions of the quantity of energy consumed, the ways in which it is distributed, and the purposes it serves. This issue of quantity versus quality has largely been ignored in mainstream environmental discourses — partly because the imperative to reduce total energy usage solicits [sic] no tech-driven solutions that money can buy. Not cool, Mireille Roddier, 'Places', September 2026

And:

Defensive medicine can be simply defined as medical responses undertaken to avoid liability rather than to benefit the patient. Billions for Defense: The Pervasive Nature of Defensive Medicine, Richard E Anderson, The Doctors Company, November 1999

In both cases the market fails society. In the first case by encouraging energy consumption that is excessive, in that environmental costs aren't captured by the market and so borne by society. In the second, the costs of excessive screening and treatment are similarly borne by society. 

A Social Policy Bond regime could reduce the costs to society of these market failures; it would do so by explicitly identifying our goals, and rewarding people for achieving them. A vital first step is to be explicit about exactly what we want to achieve. So, if energy consumption itself is seen as undesirable, we could reward those bring about its reduction. More likely, it's the environmental costs of energy consumption that we regard as problematic, and applying the Social Policy Bond idea to the environment would achieve that goal. 

Similarly, defensive medicine occurs because we do not explicitly target or reward improvements in society's health; mostly we reward medical interventions, and so incentivise their excessive use. Applying the Social Policy Bond idea to health would help solve this problem. A government could issue Tradeable Health Outcome Bonds, targeting an array of health indicators, each of which would have to fall within an approved range for a sustained period before the bonds would be redeemed. 

Social Policy Bonds express policy goals in terms of outcomes, rather than the alleged, and often very indirect, means of achieving them. Their aim is to encourage people to research, experiment and refine diverse, adaptive approaches to solving our long-term social and environmental problems; many of which are hugely important, but have been neglected because markets don't or can't address them. 

Risk aversion rules

The Economist writes about India: 

Bureaucracy runs on risk aversion. Officials worried about anti-corruption bodies award contracts to the lowest bidder, despite having the discretion to weigh up other factors. They splurge on top-tier consultants because it gives them cover for their decisions. A bureaucrat who takes a risk and produces a terrific outcome gets no reward. Why can't India's government build a decent website?, the 'Economist', 28 June 2026

Not much has changed since I began advocating Social Policy Bonds as a means of targeting outcomes. Politicians focus on institutional structures and funding. Bureaucracy, in India and elsewhere, prioritises process. Meantime public political debate is taken up with public images, sound bites, vague promises and identity. The result is government that is inefficient and ineffective, in that it prioritises narrow, short-term goals, while refusing to address urgent, long-term challenges such as budget deficits, environmental depredations, health and violent political conflict. One result is that the gap between government and people is widening in countries democratic or not, the world over.

The gap would narrow if more people participated in policymaking. One reason, I believe, why we're not very interested is that policy is formulated in terms that are difficult to relate to outcomes that are meaningful to natural persons, as distinct from corporate bodies. Policymakers appear to concern themselves with decisions about funding for different government agencies, dispensing patronage to big business and other lobbies, presenting themselves in the best light ... almost anything, in fact, except outcomes that mean something to real people.

A government that issued Social Policy Bonds would, from the outset, have to concern itself with social and environmental outcomes. Its main role would be to articulate society's wishes regarding social and environmental outcomes, and to raise the revenue that would fund these outcomes. Unlike most of the current determinants of policy, the language of outcomes and the necessary trade-offs between them is comprehensible to people other than politicians, bureaucrats, lawyers and public relations experts. For that reason, more people would be drawn into policymaking - an end in itself, as well as a means toward getting greater public buy-in to the resulting policies.

Expressing policy in terms of outcomes, and the consequent closing of the gap between public and policymakers would be one valuable benefit arising from a Social Policy Bond regime. The other would be the much greater efficiency in achieving social and environmental goals once the market, rather than a handful of politicians, decides who shall achieve these goals, and how they shall be achieved.