Thursday, December 30, 2004

It's Politics

Many discussions of governance enumerate the pros and cons of more centralization vs more decentralization. The devolution of power and authority became a popular idea worldwide in the 1990s but "sprawl"-obsessed writers in the U.S. developed the idea that "regional government" is the answer to their concerns.

This suggestion begs for an analysis of actual experience. The most auspicious U.S. case is New York City which annexed its outer boroughs in 1898. Whereas we all have a sense that this was a mixed blessing, E.J. McMahon and Fred Siegel ("Gotham's Fiscal Crisis: Lessons Unlearned" in the Winter 2005 Public Interest; no link to the article available) document how the inevitable politicization that goes with bigger government has led to disasterous results. "New York City can be seen as the first large-scale American outbreak of ... the economic sclerosis suffered by liberal democracies held hostage to the demands of politically powerful labor unions and social service providers." ... "[i]t's not the economy, stupid -- it's politics. ..." conclude the authors.

They point to the way in which Californians are now addressing their state budget problems and note that there are, indeed, lessons unlearned.