Why haven’t you spent it all?

Posted by Marc Hodak on August 1, 2007 under Invisible trade-offs | Comments are off for this article

The U.S. Election Assistance Commission had $3 billion to spend on improved voting processes. They released a report detailing the amount of spending so far by each state. This is a pretty straightforward report dutifully produced by an bureaucracy whose name certainly evokes the “we’re here to help” joke. However, I think it’s very interesting how the news outlets picked it up.

The Wall Street Journal noted that that “just 60% of the $3 billion” had been spent. “Just” sounds like “not enough.” The AP, in a story picked up by the New York times and others, sported the headline, “Some States Slow to Spend Voting Aid.” There is no mistaking the connotation of being “slow.” This article‘s headline said that the states were “behind.” Who wants to be behind on something?

But is it bad that the states have not yet spent 100 percent of these funds allocated to them? The press is clearly implying that these underspending states may not be living up to their responsibility to provide secure voting, possibly forcing us to relive the Florida 2000 debacle. But is that what is really happening? Or might it, perhaps, be a sign that some states are less deliberate or more spendthrift than others? Or that some states are merely more bureaucratic and indecisive?

Or, is it possible that the federal government somehow, perhaps, misallocated $3 billion of funds to the states?

Given what we know about any agency’s propensity to spend other people’s money, I suppose it’s unlikely that the states have only spent, so far, just what they needed to in order to get the job done. But, if that were the case, would the papers have created headlines that looked any different?

None of the articles really answer why it’s bad that all the money hasn’t yet been spent. Perhaps we can look at the program’s incentives for an answer. One article quoted Commission Vice Chair Rosemary Rodriguez as saying:

Unlike most federal assistance programs, states are not required to spend the voting improvement funds immediately.

“Congress, when it decided to fund voting systems in the states, gave a lot of discretion to them on when and how to spend funds,” Rodriguez said. “It is federal intervention, but not with a heavy hand.”

Giving money without strings sounds like a way to provide enough flexibility to do what is right for your particular situation…or like an invitation to irresponsible spending. It could go either way. All we know, as Rodriguez implies, is that this was not a “use-it-or-lose-it” program with spending required by some date in the current budget cycle. Use-it-or-lose-it certainly creates perverse incentives to spend what you don’t need to. But keeping what you don’t spend also creates uneconomic results, such as providing no remedy for misallocation of funds, which sounds like a real possibility here.

If the federal government perchance misallocated these funds, what remedy would there be? If a private company misallocates its funds, it eventually shows up on the bottom line, and its residual claimants (i.e., shareholders) can ultimately pull their capital from that company and invest it in another, one with a better record of operating with accountability and results. Imperfect incentives, but they do the job.

The government’s residual claimants (i.e., citizens) have no similar recourse. Voting out the rascals or leaving the country are not serious rejoinders. Instead, we can only depend on shaming our government into proper action via the press. But even if the people were informed and active participants in public life, articles like these don’t really help, do they? Does our democracy stand a chance, then? Will spending $3 billion on better voting booths make any difference?