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Policy for the People

Is policy made to help people or places? This is a central question politics is built to answer, and for too many years America’s leaders have answered wrongly. They have favored improving place at the expense of bettering the lives of people.

The triumph of place is unsurprising considering politicians are rooted in districts and fed by money itching to be spent on physical artifacts to their legacy. For instance, city leaders often pour money into amenities intended to lure startups and the creative class. The result: trolley lines to nowhere and subsidies for starting on a particular side of a county line.

[pq]Is policy made to help people or places?[/pq]

Or look at policies meant to help the poor. Cities and the federal government have long built public housing in particular neighborhoods or tried to halt a “brain drain” by subsidizing people to stay in impoverished areas.

As Harvard’s Edward Glaeser points out, “Place-based strategies can have real advantages, primarily because of what economists now call ‘neighborhood effects.’” As he goes on to note, “By improving the lot of a few people in a disadvantaged area, the lot of other residents will similarly be bettered.” Other times the point is to do something within a particular locale, such as improve public safety.

But place-based policies suffer from several major problems:

  • Locational distortions, whereby they cluster poor people and segregate them from the wealthy, and reinforce this over the years;
  • Crude targeting, since they generally cause real-estate values in a certain area to rise over another, often leading to rent-seeking and short-sighted behavior by incumbent landowners;
  • Geographic immobility, whereby people and families that would’ve been better off moving instead are encouraged to stay in areas with less opportunity; and,
  • Legacy investments in downtown revitalization plans or the infrastructure in declining cities that don’t reflect the actual state of demand.

Place-based policies encourage big mistakes. As Reihan Salam has pointed out, they have a tendency to reinforce cooperative or cartel-like federalism that leads to a “race to the top” in overspending and cronyism. More fundamentally, policies simply aimed at mitigating locational disparities miss the heart of why politics exists—for furthering citizens in community.

The objective of a people-based policy should be to enrich and empower people’s lives. They should aim to reduce the barriers to people advancing. The fundamental notion here is that human capital—and perhaps more significantly, human flourishing—is at the heart of our economy and polity. What we should desire is the sort of competitive federalism that protects the interests of its citizens first.

Where does this relatively abstract discussion lead to in terms of concrete policy recommendations? Here are a few examples, drawing on similar reflections by Glaeser:

  • Replacing public housing projects with transportable v
  • Offering school vouchers that operate on a state or nationwide scale.
  • Doubling-down on employment incentives similar to the earned-income tax credit.
  • Instituting a one-stop permitting shop and incubators to enable a city’s entrepreneurs.
  • Developing after-school entrepreneurship programs and mentorship hubs for current entrepreneurs (particularly based on cultivating networks of local leaders).

These two perspectives are not necessarily contradictory. Indeed, one can feed into the other. A city full of flourishing individuals will necessarily encourage them to stay and attract others, building a place that encourages yet more dynamism.

But policymakers need a framework to focus their efforts; a way to prioritize limited resources and attention. A people-based policy agenda provides that in a way that encourages individual flourishing and community, rather than an edifice complex.