Strategic Intervention (L4)

The Core: Community-centred Principles

Government and the economic condition of its society interact powerfully because:

• Economic hardship is blamed on the government and affects re-election of politicians (in democracies) or provokes turmoil (in authoritarian regimes)
• Any government, via its routine activities such as taxation, laws, public expenditure, military adventures and foreign policy, impacts heavily on individuals and their wealth-generating activities.

Governmental intervention should aim to benefit the community as a whole, which explains the «strategic» qualifier. This is also why community-centred principles are required. So this is where:

• verbal backing for commerce and enterprise at L1 is actually provided
• regulations and laws enforced at L2 are devised and introduced
• ideological requirements promoted at L3 are given state backing

 

Intervention Marks a Watershed

Strategic interventions powerfully affect people, and a good design is often possible.

Many interventions link to other levels.

• L1: legislating and updating commercial frameworks; special laws to foster innovating start-ups.
• L2: instituting regulatory agencies or special policing divisions.
• L3: providing the legislative framework needed for private enterprise and investment.
• L4: preventing community harm from commercial exploitation of common goods like the environment.
• L5: funding risky innovation or protecting culturally important industries.
• L6: instituting statistical agencies and funding academic centres.
• L7: legislating to mitigate in advance common corrupt political tendencies that cause harm and infringe rights.

Failure is common. 

Economic intervention often distorts markets due to political self-interest (e.g. payback to campaign contributors), or as part of pork-barrelling subsidies (e.g. to bribe an electorate), or as an assertion of ideology or geopolitical posturing. It often harms small businesses because of the political influence of big business. Interventions may also penalize savers and the prudent: who are the backbone of self-reliance and prosperity in the country. Sometimes intervention is a pragmatic response to a crisis : i.e. political imperatives rather than social imperatives. Despite looking good superficially, they aggravate the problem they are purporting to solve.

To this point, there has been government work on beliefs (L3), enforcement (L2) and affirmation of enterprise (L1), but no engagement at all with economic realities. The next three Levels remedy this deficiency by their orientation to the quality of any intervention.

---

• Continue to getting better government interventions.

Originally posted: Q3-2009