Unchecked and Unbalanced Watch
the Los Angeles City Council is expected to overturn the 36-year-old policy of city-funded sidewalk repair, returning responsibility to property owners. The city is attempting to narrow a nearly half-billion-dollar budget gap. The sidewalk repair program costs $10 million annually in construction and another $3 million to $5 million per year in legal fees defending the aforementioned cases of people falling. Still, one wonders how effective the program has been as nearly half the city’s pathways are currently deemed in need of repair at an estimated cost of over $1 billion.
Why has government grown since 1800? In the whig-history account, the United States became more urbanized, creating more externalities, resulting in more demand for government. Certainly, one could tell a story that sidewalk maintenance creates externalities in urban areas (you might not even have sidewalks in a rural area). So we need government to take over sidewalk maintenance.
The problem with the whig-history story is that it assumes that government takes care of the problem that it is supposed to solve. But it might not. It might be the case that individuals or small organizations solve the problem better.
Another example, which Russ Roberts and I discussed in a forthcoming podcast, is lowering the risk of salmonella in eggs. We have seen that the government solution did not work as well as intended. If there were no government involvement, I suggested that egg producers might organize to sponsor an inspection service. In fact, that apparently is the solution that emerged in the UK. For a long time, they have had a non-governmental service, called the Red Lion mark, that certifies eggs. See this commentary.
One theme of Unchecked and Unbalanced is that public goods do not have to be provided by government. In fact, lack of competition often makes government ineffective in providing public goods. Eggs and LA sidewalks are examples.