One of the primary problems in any policy question is how to deal with externalities, the non price costs/benefits of enacting a policy. Some examples include pollution, noise, increased or decreased value, etc. Well while riding my bike I came across a perfect example of an externality and the problem with policy's not truly reflecting the costs versus the benefits.
Here in San Antonio, the city decided last year to stop euthanizing dogs at the pound. This movement was headed up by wealthy women from areas where dogs are strictly regulated such as the posh old money nighborhood of Alamo Heights. So these women, who I will refer to as party A, the benefit of being able to appease their morality is greater than the cost to them, which is close to zero. On the other side of town, in the poor areas of the southwest, citizens who wish to walk or ride their bike encounter feral dogs on a regular basis. For these people, let's call them party B, the benefit to the policy is close to zero and the cost is much higher due to their being no space to put newly found strays in the shelter since the space that would be freed up by euthanization is taken.
Why is it that party A is able to pass a law which helps a very tiny minority of people while hurting most individuals? Simple, the role of money internalizes the cost for the city councilors representing the poor areas. The money from party A offsets the costs in potential lost voters from party B, so the MB>MC so the motion passes. The second reason is that while many poor people are adversely affected by having rabid dogs wandering their neighborhoods, they do not vote to reflect this. Thus the sum of all MB>sum of all MC when it comes to voting.
As a result, poor policy decisions occur which hurt most individuals, but politically make sense. This often leads to the titular law of unintended consequences as the poor decisions spill over into other areas such as the increased number of strays from a no kill policy, increased housing prices due to homeownership programs, and increased health care costs due to insurance.
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2 comments:
Dear Mr. Economist,
I do appreciate your point of view... I know it's just how it is and where we are... REALITY the reality of stupidity... this your particular post is both hilarious and annoying --- but like I said --- it's REAL... my world... my time... my mess... you are just telling it like it is... but for crying out loud... can't they tweak the darn law and stop attaching S (dollar signs) on every freaking act/law/regulation that constitutes a noble acts/intention that our publicly elected and or appointed officials have enacted... can't they transport the stray animals they have captured and say it's an act of charity (NO DOLLAR SIGN) -- And be creative about it... how about asking those vet students (make it mandatory that they contribute certain amount of time (FREE TIME and EFFORT) to practice euthanasia on these stray animals... keep reminding them -- that it's for the common good of the community... And if anyone will object to my "mandatory" idea of enforcing it -- this sort of "LEGISLATIVE ACT OF CHARITY"-- then, think of other ways... --- I know we can NEVER FULLY LEGISLATE over the control of how one must manifest his/her charity because it supposed to be voluntary... but this kind of policy is ridiculous and I know you find it ridiculous as well... but we are trapped... MY QUESTION IS -- IS THERE A WAY TO UNTRAP OURSELVES from such a ridiculous mess?
You are killing me here... LoL -- I know you are trying John ... hehehe but still --- I am dead! You are killing this young silly idealist! +_^
PS to my post above...
C'mon John... given the chance -- I know you and your group of trusted buddies/comrades (whoever they may happen to be - LoL) if or rather WHEN given a chance will be able to handle the housing and health care mess!
Speaking of which... Mr. B. Madoff... (may God have mercy on his soul and ours) the reason he was able to perpetuate that magnificent Ponzi scheme was because our so called "LEADERS" both from the Business and Gov't. sectors trusted him BLINDLY and he was one of the policy-makers/movers in Wall Street if NOT the SEC itself! Oh, yea - you have piqued my interest (LoL) to follow this mess from the very beginning it's about to blow!
You've made me care enough for what is happening in my country and the world at large Mr. Economist... now, let's just hope and pray that this 19 year old heart of mine will remain to be NOT APATHETIC when I'm in my 70's and 80's and 90's
I hope my verve and zest for what is REAL no matter how painful and difficult the struggle and obstacles maybe will remain well-balanced!
And my follow-up question is this --- mainly addressed to those people who allowed themselves to be conned - C'mon... they got carried away with greed as well... --- Remember the saying "...if it's good to be true..." --- well, they should have suspected something just is NOT right! --- IT LOOKS TOO (VERY, VERY, VERY) good to be TRUE!? --- Watch out! --- BING! BANG! BOOM!
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