Government Has Gutted Its Independent Research
There is an inherent conflict posed in the financing of policy ideas. On the one hand, money is required to assemble the data and narratives necessary to present policy options. On the other hand, money can also, in and of itself, corrupt those ideas. This is the think tank analogue to the problem presented by the Supreme Court’s Citizens United decision.
“Cuts to research agencies have left Congress outsourcing policy analysis to privately funded institutions.”
One traditional answer is publicly financed research institutions. Since 1800, the Library of Congress has helped Congress formulate policy. The Congressional Research Service was set up by the progressive Senator Robert LaFollette. Herbert Hoover established the General Accounting Office. For 40 years, House Democrats ran an internal think tank known as the Democratic Study Committee that was so influential even Republicans relied on its unbiased analysis of legislation. In the 1970s, the Office of Technology Assessment was established to help Congress work through technical and scientific problems. It did pioneering policy research on such diverse topics as railroads, H.I.V., climate change and industrial policy. The government also financed research within private institutions, across universities and at think tanks.
In 1995, Newt Gingrich, the newly selected speaker of the House, created a new system of private governance. He eliminated the Democratic study group and the O.T.A.; the budgets of Congressional committees, the G.A.O., and C.R.S. stagnated. The result was an outsourcing of policy analysis to privately funded institutions. Congress increasingly retained ceremonial aspects of democracy, with the policy work done elsewhere.
Developments in corporate America have further compounded this problem. Today, corporations are more concentrated than even 20 years ago. From 1996 to 2012, the number of publicly listed companies dropped to 4,000 from roughly 8,000. Not only are there fewer public financing streams, but with less competition, there are fewer incentives for corporations to finance multiple conflicting industrial perspectives.
All think tanks, public or private, claim independence of judgment, just as politicians assert that their judgment is independent of financial considerations. Still, financial influence is pervasive, especially in complex areas requiring detailed study. Two examples, one public and one private, make the point. One, in 2009, over half of the editorial board members of the Journal of Monetary Economics were on the payroll of one of the Federal Reserve Banks. Adherence to Fed-friendly norms is thus standard for economists. And two, nearly half the speakersat the Federal Trade Commission’s recent PrivacyCon were financed by Google, and more than half of research papers presented included authors with financial ties to Google.
The problem isn't the Fed's financing of research into monetary policy, or Google’s financing of privacy research. The problem is a lack of diversity in the financing sources in these topics. And this, as well as influence peddling, is the problem. Increasingly, the development of policy ideas in any specific field is monopolized by a small number of funders. Researchers have fewer potential options for financing, so there’s less interesting work done. Entire better pathways of innovation and policy making are choked off before they ever really have a chance to develop. The ultimate result is that all research quality, even that with financial support, suffers, and policy options narrow in a way that threatens democracy.
Is there a way to finance policy ideas such that we avoid corruption? The answer is the same as the question of whether a democracy can survive the ambition of politicians. There will always be instances of corruption, but the system will work if we ensure that no concentration of power becomes overwhelming. There should be multiple public streams, from different agencies and branches of government. And we should strive to keep corporations small and competitive to ensure a diversity of perspectives within the private space. The development of good policy demands the reduction of specific conflicts of interest and the maintenance of so much diversity of financing that the public interest emerges. As revolutionary era weaver-turned-politician William Findley put it, “Wealth in many hands operates as many checks.” It also produces good ideas.