Über die Autorin bzw. den Autor

Peter H. Schuck is the Simeon E. Baldwin Professor of Law at Yale Law School, where he has held the chair since 1984. His recent books include Meditations of a Militant Moderate: Cool Views on Hot Topics (Rowman and Littlefield, 2005).

Richard J. Zeckhauser is the Frank Plumpton Ramsey Professor of Political Economy at the Harvard Kennedy School. He is the coauthor, with Jonathan K. Spence, of The Patron's Payoff: Conspicuous Commissions in Italian Renaissance Art (Princeton University Press, 2008).

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Targeting in Social Programs

Brookings Institution Press

Chapter One

This book has a simple and straightforward message. The political and programmatic success of social programs requires improved target efficiency: directing resources where they do the most good. Although this fact is widely understood, it is seldom discussed, much less analyzed-and certainly not by the supporters of such programs. Our principal goal in writing this book is to make that discussion more coherent, better informed, and easier to conduct.

The public domain boasts many sound social programs. Some of these programs seek to allocate resources to individuals who are members of a legally defined target group-people whom politicians and policymakers have chosen to receive these resources. But many social programs are not nearly as well targeted as they could be, and a few are so poorly targeted as to call their social value into serious question. Public policy should improve the targeting of social programs so that they can accomplish more of their goals while using the same resources to assist the same needy populations.

We are particularly concerned with programs that seek to improve the conditions and opportunities of unfortunate, disadvantaged, usually low-income individuals, people whom we call bad draws. We think of these bad draws as parties to a kind of social contract for insurance against certain random misfortunes. This is why the government pays for medical care for the sick, unemployment benefits for those who lose their jobs, and food stamps for those who would otherwise be hungry or malnourished.

The category of bad draws, of course, is extremely broad, providing little guidance to policymakers who must allocate social welfare resources among the many bad draws who have plausible claims on society's solicitude. This book seeks to provide better guidance by focusing on two particular groups of bad draws who divert resources from the other bad draws for whom they were primarily intended. We call these two groups bad bets and bad apples. All of the individuals in these two groups are bad draws, but they are not well-targeted beneficiaries, either because they derive little benefit from a program (bad bets) or because their very participation imposes significant costs on other participants (bad apples).

Bad bets are individuals who are likely to benefit little from social resources relative to other bad draws. Our paradigmatic bad bet is a chronically ill nonagenarian who receives costly medical treatments at public expense, which predictably will yield little social benefit.

Bad apples are individuals whose irresponsible, immoral, or illegal behavior in the past-and predictably, in the future as well-marks them as unsuitable to receive the benefits of social programs. We are concerned in this book with a subset of this category: those who interfere with the ability of deserving participants to benefit from a program. (Most bad apples also harm themselves, but our principal concern here is their adverse effect on good apples in the same programs.) An all-too-common example of a bad apple is the public school student who chronically disrupts class and thereby impairs the learning of others who desperately need a sound education. Another bad apple is the public housing tenant or homeless-shelter resident whose repeated misconduct debases his or her neighbors' quality of life. Bad apples are found in every segment of society; the category includes many who are relatively wealthy and advantaged (good draws). Here, however, we focus on bad apples who are bad draws because they are the ones who consume the scarce resources available for important social welfare programs.

Bad bets and bad apples pose distinct challenges to policymakers, but we think it is useful to address them in a single book. We are keenly aware of the many hard issues raised by a serious effort to understand and address these two problems. First, merely defining these two categories of program beneficiaries is a profoundly difficult undertaking, necessitating tough line-drawing decisions. Second, an even more controversial challenge is the administrative task of assigning particular beneficiaries to these categories. This process in effect labels some individuals as socially or programmatically undesirable (in the case of bad apples), and others as relatively unlikely to benefit from program resources (in the case of bad bets). Third, each of these judgments entails predicting future behavior or events on the basis of inevitably limited information, which makes some level of error inescapable. Implementing such judgments in the real world of program administration raises many challenges. Fourth, to make matters worse, we cannot precisely measure the social benefits of avoiding bad bets or removing bad apples, nor can we measure the likely costs of implementing policies that do so. Finally, the politics of dealing forthrightly and effectively with the problems posed by these two groups-or indeed, even candidly acknowledging these problems-are bound to be daunting. We strongly suspect that the sense of futility that many policymakers feel at the prospect of openly confronting these problems helps to explain why they have received relatively little attention. All the more reason, then, for academics like us to get the analytical ball rolling.

The book proceeds as follows. In chapter 2, we present the foundations of our analytical approach and introduce the subject of target efficiency, which is pivotal to this approach. We elaborate on the definitions and the positive, normative, and methodological assumptions that guide our discussion, and we highlight the most difficult issues raised by our analysis. In addition, we address a very hard question: what should social programs do with the bad bets they avoid or the bad apples they remove. This presentation, while longer than we would like, is essential to understanding what follows.

In chapter 3, we begin with an analysis of the stakes facing social policymakers, whom we urge to think more rigorously and courageously about bad bets and bad apples. We then explain the reluctance of politicians and bureaucrats to acknowledge and deal with the problems posed by bad apples and bad bets. This reluctance ends up harming precisely those bad draws who most deserve the help of social programs: individuals who are both good apples and good bets. We then present a taxonomy of bad policies-some handicapped by poor targeting, others exhibiting different flaws-and conclude by analyzing six pathologies that contribute to poor targeting across a wide range of social programs.

Citizens who want to maintain and expand social programs designed to promote the well-being of deserving bad draws have an important stake in avoiding bad bets and removing bad apples. We call such citizens well-targeted redistributionists, and we count ourselves among them. Well-targeted redistributionists should want to recapture the resources squandered on bad apples and bad bets so that they can be redirected to better purposes. Alas, as we explain, many well-targeted redistributionists impede this goal (sometimes naively) by pretending that bad apples and bad bets scarcely exist and ignoring the misallocation problems that these groups present. In this way, the redistributionists make it that much easier...