Sunday, January 1, 2012

On The Power of Clarity

Over the holiday, Roger Myerson posted an interesting proposal at the Cheap Talk blog:
So my radical proposal has two parts. First, our federal, state, and local governments should publish their annual budgets online in a form that any high-school graduate can understand. Second, our public high schools should be required to teach students how to read government budgets.

I know that this may sound impractically idealistic. But I can recommend at least one good textbook: Dall Forsythe’s Memos to the Governor. Written by a former budget director of New York state, this short book offers a good introduction to the standard tricks that have been used to make public spending more obscure.
[...]
So this is my radical proposal: Before demanding lower taxes or lower deficits, we voters should demand to be better informed about our public financial system. Then our ability to demand better use of public funds can become a stronger pillar for future growth and prosperity.
The rest of the post is interesting food for thought as is the research agenda by Besley and Persson (pdf) on which Myerson bases his proposal.

2 comments:

  1. It sounds like he is suggesting direct democracy, as California has and is doing... Look how well that has helped California's finances (sarcasm). The main problem with direct democracy is interpretation and manipulation. Voters may not understand the "high-school level description" and/or other parties may interfere in their own best interest.

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  2. I disagree.

    As your comment suggests, a well-informed public and transparent governmental finance is often lauded as an important ingredient to effective direct democracy, but as I understand Myerson's political-economic perspective, he would not trust the direct democracy mechanism to deliver good policy (for many of the reasons you point out in your California example, but others too).

    I think his point is that a well-informed public together with a transparent scheme for delivering information about governmental finance would positively contribute to the governmental mechanism we currently have (and would push policy toward a more rational end).

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