Ed Glaeser has a fascinating op-ed that gets at the question: should government focus on helping poor people, or poor places?
(HT: Mark Thoma)
It does not have to be a choice. They can both be accommodated if you give the money to the poor but require them to spend it in a poor places on the problem you are trying to address.
For similarly stimulating thinking on a broader canvas see Lant Pritchett’s “Let Their People Come”: http://www.cgdev.org/content/publications/detail/10174/. As he says, we should care much more about the individual welfare of Bolivians than the wealth of Bolivia (people not places again), which forces us to ask some hard questions about why we don’t let more of them come to rich countries.
Drawing the dividing line is a false argument that allows the system to escape unscathed.
First among the changes required is a taxation system that hits the rich properly, allowing wealth to be channeled back to EVERYONE (not just the poor) to establish a minimum standard of living.
We owe to ourselves as a society. If a few want to remain bone idle, let them – it is less harmful than an underclass, or an overclass who are able to justify ‘tax minimisation’ to themselves in light of the few who are indeed idle.
and, no offence to Mr Glaeser, but his ‘piece’ is a load of rubbish.
Moreover, by subsidizing impoverished areas the government essentially is bribing people to live in economically unproductive areas.
And what does one call the systemic extraction of human and financial wealth from these ‘unproductive’ areas?
Repaid with a pittance of benefits and minimal services, while the investment bankers drink champagne from the shoes of high-end escorts.
Why do they deserve such a life? What do they contribute to society that the shop owner or single mum from a regional area does not?
In fact, there is a case to be made that they destroy more than they create. No wonder the flu epidemic has hit the inner city so hard – guilt-induced stress is not good for the immune system…
This was meant to be shown as a quote:
Andrew – Are you still in favour of a trially the Moving to Opportunity approach in Australia?
If so, would you support it being trialed in Indigenous communities?
On my reading of the literature, the effects of MTO have been mixed.
Oops.. I meant to say ‘trialling’.
In Imagining Australia you and your co-authors were enthusiastic about housing vouchers. Some of the argument is here:
But while there were positive effects, they are not the effects policy makers seem most interested in — ie moving people from welfare to work.
“…housing mobility by itself does not appear to be an effective anti-poverty strategy â€“ at least over a five-year horizon. The MTO demonstration program was motivated by theories and non-experimental empirical results suggesting that there would be large economic gains from moving to lower-poverty neighborhoods. However, we found no consistent evidence of treatment effects on adult earnings or welfare participation. Whether economic gains begin to appear in the longer run, particularly among MTO children, remains to be seen.”
Click to access mto_exp.pdf
Andrew. I have cross posted my latest to Catallaxy so you don’t feel unduly responsible for supporting the ravings of a madman 🙂
Musta not posted it…
BTW the issue of housing vouchers is not clear cut as with education.
The demand side is too constrained.
I think the answer lies in promotion of â€™smart housingâ€™ through regulation. SBS had a recent program that examined some exciting options. My favourite was â€˜legoâ€™ apartment blocks that combine individual distinctiveness with social interaction and cheapness. Another was â€˜grugâ€™ housing where units are partly buried and face on to a common space. Great for community AND the environment.
I think that the government could provide financial incentives to build such housing, lowering the price of rental accomodation. Private providers of can also be given contracts to provide government housing, much like employment services. This allows the system to be managed efficiently while giving the poorest assistance in living viably. There are good examples of this in both the not-for-profit and corporate sectors.
Overall, forget about releasing more land, but instead use existing land in smarter ways. Knocking down and replacing soviet-style apartment blocks would be a good start. Money saved on new suburban infrastructure can be spent on urban infrastructure.
A number of links are valid on the catallaxy version that I had to retrieve it from.
Don, you’re right that the MTO findings have not been precisely what was expected. Big effects for physical and mental health; pretty small effects on earnings and test scores. Nonetheless, I’d jump at the chance to do something similar in Australia, since (a) things might work differently here, and (b) there’s a lot of conjecture about neighbourhood effects, but virtually no believable evidence.
I wonder how many potentially effective programs never get implemented because of our funding silos.
If you wrote a letter to a health minister with a housing voucher proposal your letter would almost certainly be referred to the housing department.
And if you tried to pitch a housing voucher program to the housing department on the basis of its health outcomes you’d get nowhere… except, perhaps, a referral back to the health department.
Even if you could prove that a program delivered cost effective outcomes across a range of portfolios it probably wouldn’t get funded unless you could show that it provided a cost effective outcome for a particular portfolio.
There’s no ‘w’ in hole-of-government.
The Health Dept could send the file to Invig. He’d(?) fix them up.
“Mr. Glaeser is the Glimp professor of economics at Harvard.”
Phillip Adams would be very intrigued.
You’re just frustrated cause Troppo is down.
(and yes, its a he)
How come Fred Glimp’s wife was called ‘Buster’?
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