The tradeoff between equality and efficiency: Short-run politics and long-run realities

Dwight Lee

Public Choice, 1987, vol. 53, issue 2, 149-165

Abstract: In concluding this paper the best way to emphasize what has been argued is to make as clear as possible what has not been argued. Nothing in the above argumentation or evidence can, or is intended to, deny that some social welfare programs genuinely serve the long-run interests of the poor. Undoubtedly such programs exist and can be identified as successful. Other programs exist, however, that are undeniably making the poor worse off. From the perspective of reducing income inequality it is obvious that the successful programs should be maintained, and even expanded in ways that further assist the poor, while the harmful programs should be terminated. Unfortunately it is simply not possible politically to select out those programs that do promote broad social goals, such as reducing poverty, while eliminating those programs that do not. This is a point that the present paper is intended to emphasize. Once you open up the political transfer process to one group, no matter how deserving that group may be, economic rents are generated that will motivate competition among politically organized interest groups. The inevitable result of this competition is a package of programs that serve a variety of interests, but which on balance do little, if anything to benefit those groups which it was our intention to assist. But even if it were widely known and accepted that the long-run distributional effects of public assistance were neutral, it would still be difficult politically to do nothing to ‘help’ the poor. Here we are faced with a particular case of what Buchanan (1977) has referred to as the Samaritan's dilemma. Actions that are motivated by feelings of compassion are difficult to resist even if the long-run effects are known to be detrimental to those who are the object of our compassion. There is no obvious escape from this dilemma, and this paper offers none. The purpose has been instead to provide an explanation of why these programs will become more politically entrenched as they become less effective at helping the poor. Copyright Martinus Nijhoff Publishers 1987

Date: 1987
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DOI: 10.1007/BF00125846

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