The Pork Barrel Objection

Critics
of public investment often suggest that, however strong the case
for such
outlays might be in theory, the realities of American politics
make the proposals
a bad idea in practice. In particular, critics argue, efforts by
members of
Congress to obtain "pork barrel" benefits are likely to destroy
any chance that
public investment programs can be effective.

Pork barrel worries are of two sorts. One is about location.
Rather than being
guided by a sober evaluation of where projects should best
located or who can
best undertake them, decisions will reflect the demands of
powerful members of
the congressional committees authorizing the projects or of
legislators whose
support was obtained by making promises about the project's
location. A second
fear is that once a project has gotten started and jobs are at
stake, it will be
difficult to shut down a white elephant investment.

The
pork barrel objection is an application of what economists call
the "theory
of government failure." Traditional economic theory discussed
"market failures,"
where the operation of free markets does not produce optimal
economic outcomes.
The suggestion was that it was an appropriate role for government
to act to
remedy such failures. More recently, however, economists
associated with the
theory of "public choice" (which applies economic models to the
behavior of
government) began to argue that one should not compare how
markets function in
practice with how government performs ideally. For, it is noted,
there are
systematic sources of "government failure" just as there are
systematic sources
of market failure. Government action might still be unjustified,
these economists
say, despite the presence of market failure, if the costs of
government failure
outweigh those of market failure.

It would be foolish not to take the pork barrel objection
seriously. Certainly,
members of Congress care about the location of federal projects
in their
districts, and they worry a great deal about anything, including
canceling a
government project, that will cost jobs back home. And one can
certainly point
to public investment projects, such as the Clinch River Breeder
Reactor in the
1970s, where pork barrel considerations have been important.

Yet the pork barrel problem need not doom public investments to
ineffectiveness.
There are, in practice, important examples of government support
for technology
where pork barrel considerations do not play much of a role. The
National
Institutes of Health award large medical research grants, and the
Defense
Advanced Research Project Agency gives out large sums for
high-tech research,
with little pork barrel intervention. (There is some legislative
earmarking for
specific projects, generally driven by pork barrel
considerations, but it plays
a small role in these agencies' budgets.) Agencies throughout the
federal
government routinely award competitive contracts for providing
computing products
and services running into the hundreds of millions or even
billions of dollars.
Whatever one might say about the quality of the procurement
process that backs
up those decisions (and, in my own research on computer
procurement, I have been
quite critical of the process), it has never been suggested that
those decisions
are driven or even influenced by pork barrel considerations.

The pork barrel problem is worrisome, but it need not be fatal,
especially if one
pays attention to the design of programs and institutions
involved in public
investment projects. Herewith, some suggestions:

First, in statutes establishing public investment programs,
Congress should
create an institutional mechanism for decisions about project
selection and
ongoing funding that keeps future congressional involvement with
the specifics
to a minimum. Examples of such mechanisms include funding based
on evaluation of
competitive proposals by relevant agency officials using the
procurement process,
which is quite insulated from congressional intervention, or some
version of peer
review by nongovernmental officials.

Some will say that such a proposal for congressional self-denial
is either
utopian (Congress will never do it), or wrong (it is
undemocratic), or both. But
the proposal is not utopian. It is already the model used in some
programs of
this sort. And, as a general matter, more frequently than one
would imagine
Congress has indeed been willing to tie its own hand in advance
out of the fear
that, if it does not, it will produce what congressmen know to be
bad public
policy because they will find it impossible later on to resist
pork barrel
considerations.

The self-denial mechanism is thus analogous to the dieter who
locks the door in
advance to protect himself against the temptation to raid the
refrigerator in the
middle of the night. For example, Congress established a
blue-ribbon commission
to determine military base closings, whose conclusions Congress
could then
overrule only on an all-or-nothing basis, exactly because of
worries about pork
barrel objections to individual closings. Congress has adopted
automatic indexing
for Social Security benefits, even though indexing takes away
opportunities
members would otherwise gain to take credit for annual benefit
increases, for
fear that the constituency pressures for irresponsibly large
increases would be
too great.

Furthermore, keeping Congress out of selection decisions is not
undemocratic,
since any self-denying decision about institutional design would
itself be made
democratically. Indeed, it would be undemocratic to forbid
Congress from
creating such mechanisms.

Second, the pork barrel literature suggests that the best time to
worry about
issues of institutional design is at the inception of a program.
Linda Cohen and
Roger Noll argue in The Technology Pork Barrel that pork
barrel dangers
are most intense once actual projects are up and running; at that
point, they
have created actual rather than merely potential jobs, which
would be lost if a
program is shut down. Questions about benefits and costs have the
greatest
political weight, they maintain, during initial debates about
whether to
establish the program at all. Similarly, pork barrel
considerations are least
likely to influence issues of institutional design if they are
raised and
resolved before a penny is spent.

Third, chances of avoiding pork barrel problems are greatest for
programs where
the size of individual investments is quite small or where it is
quite large, and
the chances are worst for those with project sizes in between.
When individual
investments are small, members of Congress have little to gain
from getting the
program located in their district or inappropriately continuing
funding. Cohen
and Noll's data on congressional voting on technology projects
show that when
benefits to a district are low, pork barrel considerations do not
sway member
votes. And when the size of individual investments is large, the
issues involved
are likely to be of higher budgetary, media, and ideological
visibility. In those
cases, ideology and party affiliation matter more than pork
barrel
considerations. The higher the visibility of an issue, the more
likely pork
barrel considerations will be overwhelmed by more general policy
concerns.



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Finally, we need to take the admonition of the theorists of
"government failure"
that the costs of market and government failure be compared more
seriously than
they themselves often take it. Just as they criticize earlier
generations of
economists for automatically assuming a case for government
action once a market
failure has been identified, there is some tendency among
public-choice theorists
to assume that government action is unjustified once they
have identified
the presence of government failure. But if a certain project is
plausible enough,
it may be worthwhile to undertake, even with some pork barrel
costs. As political
scientist R. Douglas Arnold has written in a slightly different
context, "The
question of where a few thousand office workers will be located
is usually
secondary to the issue of exactly what they will do." If a
program is good
enough, it may not be the end of the world to have the work for
it located in the
district of the chairman of the program's authorizing committee.
The costs, of
course, are greater if one believes with a high degree of
certainty that pork
barrel politics will make it impossible to cut off expensive
failures . The
point is that likely pork barrel costs should be compared with
the potential
benefits of projects on a case-by-case basis.

It is a mistake to reject public investment projects out of hand
on the ground
that pork barrel politics will inevitably doom them to
wastefulness. But to avoid
that danger, advocates of public investment need a strategy not
only for the
substance of the programs they advocate but also for their
institutional design.



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