Decentralization remains the answer

Decentralization remains the answer

We of the human persuasion have a horrible predilection to rely on the “seen,” either discounting or ignoring the “unseen.” It has been a particularly frustrating and damaging characteristic of “leadership” in the City of Pittsburgh for decades.

As the late, great economics journalist Henry Hazlitt put it — man’s “persistent tendency … to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups.”

“It is the fallacy of overlooking secondary consequences,” Mr. Hazlitt said, updating the work of 19th-century French economist Frederic Bastiat.

History is littered with proofs of this theorem. The New Deal extended the Great Depression. The War on Poverty deepened government dependence. “Living wages” reduce the job pool. Government “economic development” is a market depressor.

Add city/county consolidation and even more expansive regional government to the list of “great ideas” whose secondary consequences probably won’t get much scrutiny — until it’s too late.

Every 10 years or so, there seems to be a new wave of proposals to consolidate many local governments into a “more efficient,” single government.

That’s no matter whether it’s Pittsburgh and Allegheny County becoming one (as was recently re-proposed this past spring), or the failed “Regional Renaissance Initiative” of 1997, which, when one peeled back the onion layers, would have been the first step to regionalizing governance (unelected governance at that) in 11 counties of Southwestern Pennsylvania.

Centralization, then as now, is billed as way to eliminate duplicative public services, save precious taxpayer dollars and make a respective region more attractive to prospective businesses and industries.

“Fragmentation” is bad, we are told. “It’s a no-brainer,” profess the pols looking to consolidate their power instead of protecting the power of those who are supposed to be in charge. You know, the people.

Of course, everything that consolidation or regionalism or metropolitanism (or whatever the moniker du jour happens to be) is touted as being is plausible. It’s just that political human nature being what it is, it’s not very likely to shake out the way proponents sell it.

As noted urban researcher Sam Staley wrote nearly three decades ago, regional government likely exacerbates the problems it is intended to solve.

“Although there are legitimate concerns about lack of cooperation among local governments, particularly on large public projects such as road and sewer systems, a more consolidated structure probably would decrease the ability of local governments to provide public goods efficiently and cost-effectively,” he said.

Staley found that attempts to consolidate governmental authority “imply that public goods and services are handled best by a single comprehensive organization.”

“Experiences with regional attempts to solve local problems have confirmed the worst fears of opponents about the excesses of monopoly government.”

Now, the power-hungry pols certainly will shudder at this next thought. But the better tack, Staley suggested, is the exact opposite of regionalism.

“The solution is more likely to be found in a competitive, decentralized governmental system,” he wrote. “Instead of undermining the diverse interests that make up metropolitan America, urban policy should free political markets to ensure that the desire of local residents are expressed fully in the policy-making process and the private sector is given the widest possible latitude to provide needed goods and services.”

In short, more local governance and privatization. Which, of course, is anathema to many politicians who, in many areas, owe their political livelihoods (if not their hardihood) to those who benefit most from the monopoly that is centralized government — labor unions.

Simply put, costs associated with the public sector “are likely to soar if a more consolidated local government structure is implemented,” Staley found. “The reasons are fairly straightforward and follow directly from a realistic assessment of the way government actually operates,” versus the way government operatives say it can be run if only given the chance.

“When bureaucrats and politicians are removed from close, day-to-day contact with citizens, the incentive to spend increases and the stimulus to reduce costs decreases,” Staley stressed.

The evidence is this stark: Consolidated local governments spend more money and tax their citizens at higher levels than do cities that have remained in supposedly “fragmented” structures.

But “fragmentation” hardly is the pejorative the central governance/central planning crowd paint it to be.

Base to the debate, said Staley, recounting an evergreen truism, “is a significant misunderstanding of economic markets and the nature of economic development.”

And, I would add again, an ignorance of history that has led several generations to believe that the New Deal ended the Great Depression; that the “War on Poverty” somehow altered the vicious cycle that keeps poor people poor; that wage floors based on “social justice” instead of worth and productivity are beneficial to all; that government “economic development” develops something other than debt for future generations.

For too many years, and under the guise of “efficiency” and “progress,” most of the public have been shown only what proponents of this and that scheme want to be seen. But it’s the great “unseen” that taps the public purse the deepest and drains it the fastest.

Forcing our public officials to acknowledge and discuss what they do not want us to see — or, perhaps, what even they do not see — is the first step to having an honest discussion about forging real “progress.”

And that’s no matter if the times are tranquil or roiled by a pandemic layered in civil discord.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).