The elegant simplicity of economic assumptions often is not especially useful or at least inadequate in many complex public policy environments. I explicate this point with an example of a market-based approach to public policy from the State of New York.  Specifically, I review the attempt by Michael F. Bloomberg, Mayor of the City of New York, to enact his plan to reduce traffic congestion through the implementation of a “congestion pricing” scheme.  My objective is not to present a detailed case study of the failed attempt at congestion pricing in the Big Apple. The paper is also not a critique of congestion pricing specifically nor does it question market oriented approaches to governance more broadly. Rather, I will try to show that the failure to successfully launch congestion pricing in the City of New York illustrates an important aspect of policy analysis:  the economics was easy but the politics was hard.

Lest the above seem unnecessarily rhetorical, indeed even harsh toward my good economist friends in policy schools, let me take a more “positive” (in the social science use of the term) approach to the issue.  If we consider the challenge not one of disciplinary advantage but, rather, the design of an “optimal policy mix” to a pressing public issue (traffic congestion to be precise), we can approach the case of congestion pricing in the Big Apple not as the triumph of politics over economics but somewhat differently.  That is, we can frame the issue in terms of creating the correct incentives for major stakeholders and then the negotiations necessary to arrive at a collective outcome that is a net gain for the commons.  While there will be losers, the NYC case can be framed as the need to achieve a minimum winning coalition to secure political victory for the initiative’s proponents.  By framing the issue in this way we can say that the search for an optimal policy mix is one that successfully integrates the economic and political dimensions of the situation so seamlessly that one would be hard pressed to distinguish what constitutes politics and what constitutes economics.