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Trucking Deregulation: Demonstrating the Merits

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The traditional view of Congress-watchers is that the merits don't count for much. Our system is a "scramble of self-interestedness," wrote columnist George Will. "Hence, politics involves few appeals to reason and public spiritedness; little reliance on statesmanlike rhetoric that appeals to what Lincoln called 'the better angels of our nature.'

However, to defeat a client group in a scramble for the public's interest, reformers must appeal heavily to reason. Only a strong case on the merits will attract the attention and support of those institutions that can effectively advocate the interest of the unorganized majority before Congress--namely, the presidency and the press. More directly, a strong showing on the merits is necessary to persuade Congress itself--especially key committee leaders--to terminate an existing special-interest policy. For legislators who are vulnerable to pressure from the client group, no amount of objective evidence may be sufficient. But for those who can afford to be "in doubt," support will hinge on what they find when they "turn to the merits."

In our system of law, the accused is presumed innocent until proven guilty. Similarly, in our political system, the burden of proof is on those who advocate major change, especially when that change risks disruption and dislocation. To meet this burden, a case to Congress on the merits must satisfy three conditions.



First, it must establish that something is seriously wrong with the existing system. Unlike accused criminals, proposed policy reforms are not guaranteed a speedy trial, or any trial for that matter, on Capitol Hill. Reformers must convince one or more key committee leaders that there is a serious problem in order to gain a place on Congress's severely limited docket. Once in "court," they must be able to demonstrate a strong need for change, since members of Congress will not likely undo established policy just for marginal gains.

The fact that an existing policy is economically inefficient has not traditionally been seen as a serious problem on Capitol Hill. Elected officials generally don't care about misallocation of resources, according to political observers, only about who wins and who loses. When the costs of an inefficient policy are diffusely spread, it's hard to make a dramatic case for reform.

Because of the nature of their professional training, economists are often cast in the role of "partisan efficiency advocates" in the policy debate. But a former member of the Council of Economic Advisers, George Eads, has observed that the way economists look at inefficient policies is itself inefficient, politically speaking. Since arguments about misallocation of resources rarely carry the day, what's needed is evidence on the inequity of such policies--specifically regulation--where it exists:

While economists tend to believe that inefficiency is bad per se, the bulk of the population seems willing to tolerate inefficiencies from regulation because they believe that in return they are obtaining "fair treatment" or "equity." It does economists little good to observe... that what may appear to the public to be "equity" indeed may be highly inequitable. Economists have not, in general, been willing to perform the studies that would allow us to back up such claims. Most of us have contented ourselves with analyses that measure such esoteric concepts (esoteric to the general public, at least) as "deadweight loss." By doing so, we have failed absolutely to undermine the strongest support for regulation among the general public.

Bradley Behrman came to a similar conclusion after studying the initial, unsuccessful efforts of airline regulatory reformers: "Only if deregulation can be converted from a technical case promising improved economic efficiency to a moral case promising an end to monopoly profits and privilege will it ever arouse sufficient... support.

Most congressmen, like most people, prefer a devil they know to a devil they don't know. Even if the existing system is seriously flawed, undoing it could be worse. Thus, a convincing case on the merits must not only demonstrate a serious problem, it must reduce uncertainty about possible ill effects of the proposed change (condition two).

Idiosyncratic evidence is what's called for according to Stephen Breyer who, as special counsel to the Senate Judiciary Subcommittee on Administrative Practice and Procedure, played a central role in achieving airline deregulation. Breyer concluded that detailed empirical investigation of the industry or policy in question is necessary in part because there may be light years between the state of the academician and what's needed for implementation of a specific reform proposal. Breyer also found that qualitative, anecdotal evidence has impressionistic value because it assures members of Congress that the researcher has been out in the field.

In order to demonstrate a serious problem and reduce uncertainty about change, a case on the merits must be understandable to politicians and sensitive to political factors (condition three). As advice for would-be policy reformers, that's hardly profound. But the observations of a veteran Washington lobbyist suggest that it's not always heeded. Complexity of evidence is one problem: "The government tells you far too much on the subject.

That's because it's being done by some guy who's trying to impress his boss. "It is useful only to the extent they make it intelligible to people who don't have time to get a Ph.D. on the subject."

Sterility is another: "The [substantive] stuff is good if you put it in human terms. But in the form the government puts it out, it's often indigestible. You have to have a human angle."

These and other problems with analysis used in a strategic setting result from still a third problem--the distance of the analyst from the political battlefield: "A lot of the government's stuff is turned out by people who don't get any closer to the Hill than their own desk. But it's no different than with the guy who designs a Springfield rifle. You need to send him out to the field every now and then to see if it really kills any game."
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