Monday, 30 June 2014

Road hog (or at least pork)

Were I teaching my undergrad Public Choice class again in two weeks instead of heading off to Wellington to join up with the NZ Initiative, this would have been Assignment 3. It couldn't have been the first assignment, because that comes after they've gotten basic constitutional political economy and social choice, but before they've gotten the basics of their own electoral system and the mechanics of pork barrel politics. It couldn't have been in Assignment 2, as the kids then wouldn't have yet gotten the economics of bureaucracy. It could have been Assignment 3, or on the take-home exam.
In theory as developed and discussed in lectures and in your readings, we found that First-Past-the-Post systems tend towards geographic-based pork-barrel policies while PR and MMP systems tend instead to demographic-based pork.  
During this year's election campaign, National announced a substantial set of roading projects to be funded outside of the normal NZ Transport Agency funding process. Normally, roading projects are chosen by a process largely outside of politics: collected petrol excise and road user charges in the Land Transport Fund are used for road maintenance and for new roading projects, where the projects are ranked in importance by bureaucrats rather than politicians. These ones were chosen by the National Party and funded from revenues outside of the Land Transport Fund.
a) Explain the basics of pork-barrel policies and why they might differ between electoral systems.
b) Why might a government agree to leave roading decisions to an arms-length body?
c) Was the roading announcement above surprising? Why or why not? Explain National's decision.
One secret in my assignments and exams: I often didn't really know what the answer was. All that grading rubrik stuff we were supposed to have done this year, well, that wouldn't have gone well for part c of this question as I don't have a great answer here. Students who could apply the theory well to the case at hand would do well, and those who came up with explanation that didn't demonstrate any understanding of the theory failed.

In Part a, I'd expect some discussion of the basics from Persson & Tabellini and from Stratmann & Baur.

In Part b, I'd expect some discussion of the benefits of delegation. In a FPP system, such delegation is more needed than in MPP, because every MP will be tempted to skew things towards their own districts. We might expect a delegation to a partisan committee that weighs up overall benefits to the governing party, but not to a neutral committee. Under MMP, you could get bipartisan sustainable agreement to leave it to a nonpartisan committee because the benefits of distributing geographic pork are more limited, as far as the Party's concerned, but individual district MPs will still try to push for it anyway.

In Part c, well, I haven't a great answer. Maybe National's doing it as a sop to the hinterland in general, reckoning that Auckland won't care enough to punish them for it. I wonder what my students would have done with it.

What's really irritating here is the precedent. Once we've broken the general user-pays nature of the National Land Transport Fund, all bets are off. When the system's working, the fees motorists pay are what pay for highway construction and maintenance, with some local Council contribution (half) toward local roads. If you want rail lines and other stuff, that comes out of general revenues: it can't come out of petrol excise, 'cause that's for roading projects. When you break that deal and run partisan allocation of funding for transport projects rather than leaving it to the Transport folks who are meant to be running things through a cost-effectiveness filter, well, who knows what messes might yet come.

Do read Transport Blog's excellent discussion:
Perhaps the most worrying thing about this announcement isn’t so much the projects themselves but that the government is getting more and more involved in picking projects rather than leaving it up to the NZTA to decide on spending based on merit. It started with the RoNS and last year we got the Auckland package.
When highways are ribbon-cutting triumphs for MPs rather than mundane bureaucratic decisions, I expect we get worse outcomes.

I also thank @zippygonzales for related discussion.

Update: Just remembered that I was in a Twitter argument last week about how we needed to keep highway funding separate from public transport funding because it's harder to go on dumb C>B roading sprees when you have to fund it from petrol excise and road user charges. Hmm.

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