In search of sweet spots in public policy

Increasing government spending improves educational outcomes and doesn’t enhance them at all.  Augmenting incarceration rates reduces crime and increases it. Raising the minimum wage will increase unemployment and not affect it in the slightest.  These statements are neither Zen koans nor political doublespeak, but summaries of policy research findings that are not as contradictory as they at first may sound. All of them stem from a reality that is frequently forgotten in political discourse: In many public policy areas there exists a “sweet spot” in which pursuing a certain approach does maximal good, and beyond which further increments make less difference, no difference, or even make things worse.

For a range of political, tribal and emotional reasons, sweet spots are always going to be underappreciated in political debates, when tend to be dominated by shouting matches between proponents of simplistic positions that do not change in light of current circumstances, e.g., “More money for health care!”, “Lower taxes now!”, “Tough on crime!”, “Mass incarceration has failed!”. But a sophisticated policy maker, journalist, researcher or voter should recognize that there are few absolutes in public policy.  Very often the policy change that worked at a different point in the curve will no longer yield a benefit or even be counterproductive of further pursued. Our political life is usually characterized by the search for simple answers, but good governance depends on the search for sweet spots.

The health care production function