Why we should use Lotteries in Policymaking

We live in a society which obsesses with measuring, ranking, and benchmarking (see e.g. Steffen Mau’s The Metric Society). Everything needs to be compared, everyone needs to compete. Metrification and competitiveness go hand in hand. And the underwriting normative principle of all of this measuring and competing is meritocracy, the gold standard which seemingly marries efficiency with justice.

Yet, deep down, we all know that success in life depends on many things such as personal background, health, connections, and sheer, damn luck. Our society likes to underestimate those other factors, and overestimate merit and effort. There are both cultural and psychological reasons for this. For societies, meritocracy is an easy and legitimate way to create social order. For individuals’ psyche, meritocracy means that winners can congratulate themselves, and losers can blame themselves. This creates a very stable system.

Several recent books (Markovits, Guinier, Sandel) have called into question this tyranny of meritocracy. Strong meritocracy is a serious blow to social mobility and the social fabric of society in the long run.

However, meritocracy not only blows relatively small individual differences out of proportion to create a cult of winning. Meritocracy can also never be the only normative goal for a society. For instance, as numerous advocates of equality of opportunity have argued, not everyone gets out of the racing blocks at the same time. Members of the elite are in much better position to place their kids in the meritocratic race than parents with less privileged backgrounds. Occasionally and controversially, institutions use countermeasures: affirmative action, minority quotas, seniority principles etc. But these countermeasures never sit easily with the underlying creed of meritocracy.

Meritocracy also makes us measure things that are hard to measure. Ever wondered how to rate who the best painter of all times was, or the best pop/rock/jazz band? Or what to answer what your favourite football/ soccer goal of all times is? Or whether you like skiing or sunbathing more? For many people the answer is tricky, because the problems are multi-dimensional. Skiing and sunbathing are both favourite options, depending on the season. Football knows many different, equally wonderful types of goals. And it is impossible to say that Van Gogh was the better painter than Gauguin.

These are obvious examples, but they also apply to policy problems. Should money be better spent on roads or schools? Should politicians talk more about the environment or more about the pandemic? A ‘rating society’ makes us rate things that cannot easily be rated. This can yield dangerous results under certain circumstances: the meritocratic process is, in the best of all cases, extremely difficult, and the worst cases extremely misleading. Many allocation problems suffer from this. Let me make a simple example: Who should get the annual best paper award at a political science conference? A women who collected thousands of data points, used an intriguing statistical method and found some interesting voting patterns? Or a man who did months of ethnographic field research, spending hundreds of hours listening to voters in the countryside? Even seemingly ‘objective’, ‘rigorous’ and ‘scientific’ procedures often boil down to ‘aesthetic’ preferences of jury members.

In other contexts, complicated benchmarking either means that those with most resources will win (best prepared bid), or those with politically closest ties (nepotism, corruption). FIFA’s way how to decide on who to host Football (Soccer) World Cups is a good example for this dilemma. Yes, we all know that FIFA is marred with corruption scandals. Western critique about FIFA’s corrupt structures are in many ways justified, but usually these critics do not come up with interesting solutions to avoid the problem that money = merits. If it was about monetary merits, the US as the highest bidder should regularly host the World Cup every four years. The outcome would be ironic given that the US is somewhat of a dwarf in sporting success when it comes to male soccer nations.

One could say, of course, who cares about which country will host the World Cup. Unfortunately, most really important policy problems are complex, multi-dimensional and not easy to measure (at least not in an uncontroversial way). Complex problems make it easy for equating merit with money or else favouritism, corruption and patronage creep in.

Undoubtedly, wee need a mechanism to allocate scarce resources. We do not have enough money to give the everyone to equal measure. I think we should use lotteries in such cases more often. Take the FIFA example: A committee could check minimum quality standards to weed out bad bids. In a second stage, the lottery decides who gets to host the tournament. This would make it much more difficult that a) only rich countries win, or b) only the corrupt(ing) countries win. It would also honour the fact that there are usually several, very good bids, all with different merits. It would, finally, acknowledge the fact that a lot of success in life is ultimately due to sheer, damn luck.

What I propose here is not so outlandish as it sounds. Recently, even the World Bank has suggested to use a lottery system when other forms of targeting social transfers fail. Some scholarship grants or working permits such as the U.S. Green Card are given on a random basis. Other policy applications use lotteries to experiment. In 2019, the Nobel Prize in economics was awarded to Esther Duflo and AbhijitBanerjee for their ‘proselytization’ of randomized controlled trials (RCTs). RCTs are nothing else than using a lottery to assign who gets to benefit from a policy or not. The lottery allows us to find out how effective these (relatively simply) policy interventions are. While such experiments have clear limits, they can allow us to get a glimpse at the social mechanics of policy interventions.

What we now need is to take the lottery from merely experimenting to actually allocating scarce resources. To be clear: I am not advocating for applying lotteries everywhere, from all forms of public redistribution of money, to all hiring procedures for new jobs, and to all forms of contracting on random basis. But occasionally throwing up your hands in the air and using a lottery as a fairer, more equitable and more realistic tool of policymaking is definitely a useful antidote against all the competition that pervades our economy, politics and society. Who knows, next time you lose out on a contract, a grant, a job or an award you might have to damn your fate, rather than damning a jury decision you anyways would have thought to be biased.


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