Targeting in Social Programs: Avoiding Bad Bets, Removing Bad Apples

by Peter H. Schuck, Richard J. Zeckhauser

" Should chronically disruptive students be allowed to remain in public schools? Should nonagenarians receive costly medical care at taxpayer expense? Who should be first in line for kidney transplants—the relatively healthy or the severely ill? In T argeting in Social Programs , Peter H. Schuck and Richard J. Zeckhauser provide a rigorous framework for analyzing these and other difficult choices. Many government policies seek to help unfortunate, often low-income individuals—in other words, ""bad draws."" These efforts are frequently undermined by poor targeting, however. In particular, when two groups of bad draws—""bad bets"" and ""bad apples""—are included in social welfare programs, bad policies are likely to result. Many politicians and policymakers prefer to sweep this problem under the rug. But the costs of this silence are high. Allocating resources to bad bets and bad apples does more than waste money—it also makes it harder to achieve substantive goals, such as the creation of safe and effective schools. And perhaps most important, it erodes support for public programs on which many good bets and good apples rely. By training a spotlight on these issues, Schuck and Zeckhauser take a first step toward much-needed reforms. They dissect the challenges involved in defining bad bets and bad apples and discuss the safeguards that any classification process must provide. They also examine three areas where bad apples and bad bets loom large—public schools, public housing, and medical care—and propose policy changes that could reduce the problems these two groups pose. This provocative book does not offer easy answers, but it raises questions that no one with an interest in policy effectiveness can afford to ignore. By turns incisive and probing, Bad Draws will generate vigorous debate. "

175 pages, Hardcover

First published January 1, 2006

Reviews

[Michael Connolly · Rating 3 out of 5]

The author discusses improving public charity by removing some categories of recipients:

(1) bad bets, for example, an person on life support that will die soon no matter what is done,
(2) bad apples, for example, student troublemakers who disrupt the classroom so no one can learn.

Differentiating the Author

The author does not come from a libertarian perspective, that is, he does not believe that government should leave charity to the private sector. Nor does he come from a social darwinist perspective, that is, he does not believe that the weak should be abandoned to die. He believes that the government has a role to help those who cannot help themselves. The book is not about welfare fraud and abuse, but about changing the rules to favor those who are most deserving of help.

Bad Bets

Regarding bad bets, he points out that in the United States kidney transplants are given to those who have been on the waiting list the longest, even if they are so old they probably won't have many years left. On the medical front, he recommends screening programs to identify those who have particular diseases as a frugal way to spend taxpayer money, and saves more lives per dollar spent than do expensive end-of-life interventions. In both the United Kingdom and the United States, there has been a movement away from using age as a consideration for the receipt of medical care, because it was a form of discrimination. The author suggests that money spent on costly end-of-life interventions would help the patient more if it were spent on improving palliative and hospice care. The author also recommends advance medical directives.

Bad Apples

Giving more help to poor people who misbehave is unfair to those poor people who do the right thing.
Allowing people to get away with breaking the rules makes people who follow the rules feel like they are suckers and chumps. The author points out that devoting extra resources to bad apples creates perverse incentives where people are rewarded for misbehaving. The author wants there to be a cost to self-destructive behavior. He wants to minimize the problem of moral hazard by targeting those whose misfortunes occurred through no fault of their own.

Practicality

The author is like Marvin Olasky, who believes in resurrecting the traditional, moralistic distinction between the deserving poor and the undeserving poor. However, Schuck gives more attention to practical considerations: allowing disrupters to remain in classrooms, homeless shelters, public housing and so on harms those around them who are behaving themselves. The author points out that failing to weed out the bad apples increases the probability that the social welfare program will fail, and that taxpayers will withdraw their support. The author proposes not to dump these bad apples on the street, but rather to isolate them in places where they can harm only other bad apples like themselves. They would still receive help, they just wouldn't be allowed to ruin the barrel. If and when the bad apples learn to behave themselves, they could be returned to civilized company. The recent efforts to mainstream children with disabilities has had the unfortunate consequence that if the student is disruptive because of his disability, it is difficult to remove him from the classroom, and other children suffer. The author points out that framing the debate in terms of rights obscures the fact that trade-offs are always involved.

Reality Orientation

The author is reality oriented, in that he is willing to admit to the existence of bad bets, bad apples, and finite resources. The author criticizes lazy thinking and political cowardice. The author objects to the tendency of opponents of reform to resort to name calling and demagoguery to terminate the conversation. Radical egalitarian utopians will reject his message, because they believe that in a rich country like the United States, surely there must be enough money to take care of everyone. But there isn't. Just ask those who suffer from diseases that there is no cure for, and for which little research money is being spent.