Reviewed by Mark Rush, Department of Politics, Washington and Lee University. Email: RushM [at] wlu.edu.
As I read WORST CASE SCENARIOS it invoked many different memories from my teaching career. The principal one concerned a visit from a bright eyed student who was doing a survey for our then-nascent environmental studies program. The survey that was centered on one question: Was I willing to pay to clean up a local creek. I asked “How much.” The interview went downhill from there. I was not willing to answer without a price. I was not willing to pay just any price to clean up the creek, and, depending on how clean we were talking, I was willing to pay more or less. The student, on the other hand, discovered that the economics course she had not yet taken really was a vital component of environmental studies.
I do not mean to reduce the lessons of WORST CASE SCENARIOS to a simple vignette such as this. Sunstein’s book is a much broader, intriguing and thoughtful (though occasionally a bit too meticulous) analysis of how rationally to weigh the costs, benefits, and probability of potential disasters (large and small scale) and how normative considerations enter into those calculations. But, it also nicely takes episodes such as my student’s survey and a terrorist attack and demonstrates the connections.
At the outset, I will acknowledge that, while I enjoyed the book, in the end I found it frustrating. This is not a reflection on Sunstein’s analysis. He develops his discussion thoughtfully and thoroughly. It affirms the complexity of public policy analysis and the difficulty policy makers encounter in seeking to fashion regulations that are not (and probably can ever be) truly positive-sum. In this respect, Sunstein’s analysis of the different approaches to and ethical yardsticks used in developing laws to deal with everything from small problems to great catastrophes ends up providing the reader with powerful tools to critique such policies, but little with which to resolve the tensions among competing principles and considerations that inform ethical and economic approaches to public policy.
Sunstein begins WORST CASE SCENARIOS with a series of queries concerning the limits of individual and collective rationality.
How do human beings and their governments approach worst-case scenarios? Do they tend to neglect them or do they give them excessive weight? Whatever we actually do, how should we deal with unlikely risks of catastrophe?” (p.1)
As examples of particularly vexing worst case scenarios, Sunstein asks us to ponder the wisdom of the United States’ approach to terrorist threats in the wake of the World Trade Center bombings and our resistance to the Kyoto Protocol on climate change. [*405]
To the former, we have taken the approach outlined by Vice President Dick Cheney’s “One Percent Doctrine”: even though another terrorist attack (of this scale) is quite unlikely, we still need to treat it as a certainty and expend potentially unlimited resources (and make potentially unlimited sacrifices to civil liberties) to prevent its reoccurrence. To the latter, the United States has taken a contradictory approach. Even though climactic catastrophe is no less ominous (and perhaps more certain under the current circumstances) than another terrorist attack, the United States has resisted the Kyoto protocol. While the positive impact of the Protocol on the environment is subject to much conjecture, and its implementation raises very valid concerns about fairness in terms of sharing its costs and benefits, the nature of American resistance to the Protocol has allowed critics to focus more on US stubbornness than on seeking to resolve the Kyoto agreement’s flaws and develop a new, more equitable and more effective approach to climate change. In both cases – terrorism and climate change – Sunstein laments the steps taken by the United States.
WORST CASE SCENARIOS is not, however, just a critical book. As he notes in the introduction, Sunstein has three specific goals. First, he wants to understand people’s tendencies to respond to worst case scenarios either by excessive overreaction (in the case of terrorism) or utter neglect (to a point, the American approach to climate change). Second, he wishes to “consider” how individuals and public officials might address low-probability risks of disaster more effectively. Finally, he looks to explore the limits of cost-benefit analysis in dealing with problems and potential disasters that may occur in the future (p.5).
Sunstein takes the reader on a tour de force of various approaches to real and potential disasters. In the first two chapters, he juxtaposes the American approaches to terrorism and climate change, then demonstrates that a key aspect to ensuring the success of a comprehensive approach to a common problem (be it terrorism, global warming or, as he discusses in Chapter 2, the ozone layer) is to ensure that the actors who will bear most of the cost will also garner substantial and quick (if not immediate) gain.
Hence, he concludes that the success of the Montreal Accord on the Ozone layer can be attributed to both American support for the Accord and a general perception across the globe that the benefits of repairing the Ozone layer could be achieved quickly and at a rather small cost in terms of regulation. In contrast, American resistance to the Kyoto Accord is based on the fair perception that the United States (and other developed nations) will bear a disproportionate share of the cost, while the benefits from a slowing (or reversal ) of global warming will not be realized any time soon.
Clearly, this analysis may trouble some observers. Whether we like it or not, the success of the most elegant ethical or analytical framework for policymaking may, ultimately depend on the self-interest (however poorly informed) of electors, government officials or other political actors. Collective action problems such as free riders and the [*406] tragedy of the commons loom as a threat to even the most comprehensive ethical framework.
In the middle of the book, Sunstein embarks on a discussion of “Catastrophe” (Chapter 3), “Irreversibility” (Chapter 4) and “Money” (Chapter 5). In each chapter, he assesses different principles on which individuals or societies perceive and address risks and threats. These chapters are the strongest aspect of the book. Insofar as all public policy problems involve choice, they inextricably link ethical and economic analysis. When they involve potentially disastrous outcomes, the link becomes more obvious and more discomforting. Sunstein makes this clear as he discusses the many different principles one can bring to bear when formulating public policy – cost benefit analysis, one’s (or a society’s collective) willingness to pay to secure particular benefits or avoid certain harms, the statistical value of a human life, the Precautionary Principle, and so on – and the shortcomings posed by each. No one principle will resolve any public policy problem without controversy.
In the space of a review-length essay, it is impossible to do justice to the detail with which Sunstein develops his discussion. In each chapter he demonstrates the fatal shortcomings to decision rules that we might apply to potential catastrophes. No matter how good or robust an ethical principle may first seem to be, its use invariably bears costs of its own and, in the end, begs reconsideration.
The truly vexing aspect of the subject is the fact that individual and collective decisions about potential catastrophe (of any scope) are frequently made with incomplete or, at least, disputable information about the probability of a particular catastrophic event, its true impact (in terms of monetary loss, loss of life, and the like), the value of that loss, who will bear the impact of the loss, and the real cost (measured in any terms) of seeking to prevent or at least manage the impact of a potential catastrophe. Even if an actor has complete information, the assignment of values, losses and benefits is, inextricably, a subjective exercise. As a result, Sunstein’s discussion is characterized by a tension that results from one’s desire on the one hand to determine costs, benefits and probabilities clearly and objectively and, on the other, to deal with the fact that individuals are entitled to make different determinations based on their own subjective tastes and preferences.
An especially illuminating aspect of this discussion takes place in Chapter 5 (“Money”) where Sunstein discusses the use and shortcomings of cost-benefit analysis. Were regulators and policymakers able to determine “costs” and “benefits” of controversial policies clearly, they might be able to agree on the amount of resources to devote to a policy, how to distribute the costs and benefits, and how to be sure that the associated burdens would be equitably assumed by different members of society. However, in an environment of “scientific uncertainty,” “implausible judgments of value” (pp.206-207), incomplete information or inaccurate or debatable assessments of risk and probability, any cost-benefit analysis will be subject to question. [*407]
It seems we are stuck. What Sunstein offers us is, in some ways, a reassertion that there is no escaping risk and loss in an environment of incomplete or, in Anthony Downs’ terms, imperfect information. Since perfect information exists only in theory, the assessment of the best way to deal with worst-case scenarios always runs the risk of costing too much and doing too little. So, what to do?
Sunstein leaves us hanging. In the end, he offers suggestions for developing a more effective, rational policy for preventing (or at least delaying) environmental catastrophe. He states four principles to address the climate change issue. Any international agreement should have four central features (p.283):
- fully global emissions trading, so as to drive down compliance costs
- sensible and nonarbitrary emissions limits
- inclusion of the developing nations
- financial and technological assistance from wealthy countries to poorer ones
After reading the previous chapters in the book, it is clear that these points can only be a starting point for discussion. The reader wonders whether she would avoid being bogged down in the ethical quagmire through which the author navigates in each of the prior chapters. Again, this is not a criticism of Sunstein’s desire for a wise, reasonable approach to climate change or his careful analysis of the ethical problems that plague any attempt to develop effective public policies that will address both collective and individual concerns about fairness and equity. Instead, it is an acknowledgment that his prior analysis is thorough enough to render any such statements of principle subject to a lot of questioning.
While Sunstein nicely presents the difficulties confronting anyone who seeks to resolve the ethical dilemmas he discusses, in the end, his principal problem lies, I believe, with democracy. Even if regulators and officials were to formulate an ideal solution to a potential catastrophe, they would still need to deal with the fact that they might not be able to sell it to their constituents or critics. Even though it makes no sense to do so, “humans neglect low probability high consequence risks if the cost is immediate and benefits are distant” (p.138). It is therefore up to their leaders to make the right decision and, despite the electoral consequences, seek to educate those constituents.
V.O. Key told us long ago in THE RESPONSIBLE ELECTORATE that voters are not fools. Sunstein’s point is that humans are not necessarily wise, either. Since “life is short, people are busy and occasionally they are more reluctant to take risks than an analysis of expected value suggests” (p.151), democracy requires that we pay attention to those voters even if they are poorly informed or irrational. Similarly, we need to trust our elected officials and bureaucrats even if we disagree or do not understand their decisions.
In the end, Sunstein says that “for most of us, worst-case scenarios rarely deserve sustained attention. Life is short, and we might as well enjoy it. But, if we are alert, on occasion, to the worst that might happen, we should be [*408] able to enjoy life a lot longer” (p.286). In that case, one can do a lot worse than reading WORST CASE SCENARIOS. It is a thought-provoking read by a thoughtful scholar.
Downs, Anthony. 1957. “An Economic Theory of Political Action in a Democracy.” 65 JOURNAL OF POLITIAL ECONOMY 135-150.
Key. V. O. 1966. THE RESPONSIBLE ELECTORATE. Cambridge, Belknap Press of Harvard University Press.
© Copyright 2008 by the author, Mark Rush.