Steve Teles writes:
Last Friday Paul Krugman wrote in his column in the NYT that:
“Our sympathy for the people of Mississippi and Louisiana shouldn’t blind us to the realities of their states’ political cultures. Last year the newsletter Corporate Crime Reporter ranked the states according to the number of federal public-corruption convictions per capita. Mississippi came in first, and Louisiana came in third.”
I agree with Krugman that, while this is not something anyone in power wants to advertise (“MS and LA are devastated, but their governments can’t be trusted with the recovery process”), it is absolutely essential that it be recognized.
Bush has proposed a squad of inspectors general, but by their very nature, IGs come in at the back end, investigating things that could have been done differently. The pervasive, long-standing low quality of governance in the effected areas, combined with the stress that these governments are under, raises a serious question of whether they can be given primary, or even substantial, responsibility for the major decisions involved in reconstructing New Orleans.
Even worse, can they be trusted when almost all the money for that reconstruction is transferred to them by a third party? Any serious theory of federalism recognizes that divided power and authority works best when each level of government is spending money it raises itself—the incentives for quality degrade as the percentage of revenue raised by the level that is spending it declines. That points to the need to have, as much as possible, the major strategic and implementation decisions around reconstruction made by the federal government.
Krugman suggests that the only way to have this avoid an Iraq reconstruction debacle would be to put the agency responsible for spending and strategic decision-making in the hands of someone outside the Republican party, preferably a non-partisan technocrat with a reputation for competence. I’m not sure I can think of anything that would work any better.
Given the huge sums involved with reconstruction, that means that the local government should, for a period of time at least, be basically run by the national government. But at some point federalism dictates that authority for the management of the city must be returned to local officials.
That suggests to me that, beyond just reconstructing New Orleans physically, it must be reconstructed governmentally. In essence, the city government should, more or less, be put into receivership.
If the flood had occurred in Minneapolis or Madison, or some other city with a tradition of effective public administration, this would not be necessary. But New Orleans pre-Katrina wasn’t anywhere close to even the minimal levels of government quality that every citizen in this country ought to expect. This is one case of a city that could do with a medium-term suspension of democracy and Singapore-style governance, until new, more competent forms of government are sufficiently well-rooted that they have developed a supportive coalition that will ensure that they will not be wholly clawed back once politics as normal resumes.
Otherwise, there is a significant danger that, after all the concrete is poured and the levees reconstructed, the poor quality of governance and political life that characterized the city will simply reappear.
Making New Orleans livable is not simply a matter of policy design or adequate spending—it is also a substantial challenge of governance and institutional design. In the long run, these are the factors that will determine whether New Orleans comes out of this a more functional city than it was before the hurricane, and whether it can preserve all that was good about it, without the institutions that made its politics often entertaining, but rarely competent.