Poverty and Government Policy Part Two: A New Direction

This is the second segment of a two-part installment by Dr. Visser, examining the tension between government policy and the realities of poverty.

The first part of my observations on poverty and government policy focused on why, despite admirable intentions and continuous tweaking, federal government poverty-alleviation efforts have not moved the poverty-rate needle in my lifetime. It is never, it seems to me, adequate to criticize something without making an effort to improve the situation, so I venture here to outline a new paradigm. In doing this, I believe it is important to note two things related to a long history of Reformed Christian views on the subject:

1. We generally agree that government has an important role to play in poverty alleviation, and
2. We want government to participate appropriately, which means within the sphere of its God-given authority and doing only the things it is well-equipped to do.

Most of us will agree that governments are charged with military or police power and the establishment of systems of justice (e.g., laws, courts, prisons). Many of us are also open to governments doing other good things, such as promoting democracy, civil society, productive citizenship, job-creating entrepreneurship, or public goods (like clean air/water, parks, roads or utilities). But government being a first responder to poverty is very different than government creating a policy environment aimed at minimizing poverty.

This is why we do well to explore the thoughts of Reformed Christian thinker Abram Kuyper, who introduced the concept of “sphere sovereignty” nearly a hundred and fifty years ago. This concept recognizes that human interactions, and ultimately human flourishing, involve a variety of overlapping spheres of responsibility and authority, such as families, churches, schools, businesses, or governments. In a nutshell, it suggests that societies can only flourish when each of these overlapping spheres comes to understand its God-given responsibilities, the limitations of its authority, and its responsibility to work peaceably with other spheres when conflicts arise.

This kind of thinking recognizes that human flourishing can only come about when governments allow individuals, groups and organizations to access the physical, financial, intellectual, moral, social and institutional assets and freedom needed to work out their particular vision for human flourishing. In this kind of world, government’s job of promoting justice involves establishing policies, incentives and structures that develop the capacity of communities. This involves providing a “level playing field” that encourages individuals, groups of people and non-government organizations to improve their capabilities and accomplish their goals. Kuyper and the Reformed thinkers articulated that there were a variety of societal “spheres, each having legitimate authority in its own right, such as the family, church, school business, or government, but that government’s authority did not automatically trump the authority of other segments of society when conflict might arise. And, since Kuyper was very concerned about poverty and wrote a lot about it, we know this means that he realized that government, by itself, would be unable to find lasting solutions to, what he called “The Problem of Poverty.”

Sphere sovereignty advocates, like Tocqueville and many of the U.S.’s founding fathers, recognized that human flourishing requires diffusion of authority, independent institutions and voluntary associations that can hold a king, official church, or state in check, and give individuals alternatives when these authorities follow their worst impulses or exceed their legitimate authority. These “intermediary institutions” fill a significant void that exists even in most free countries like the U.S., where battles have often been fought over individual rights vs. government power, forgetting that we often can only accomplish important tasks if the rights and autonomy of our churches, schools, businesses and voluntary organizations are also respected. Perhaps most importantly, these organizations facilitate the transfer of important values, allowing things like empathy, generosity, honesty, accountability and gratitude to be seen as normative rather than optional.

If I may be so bold as to extrapolate from Kuyper's thoughts, I believe he would strongly support a Federal Government role in poverty alleviation but would work to structure the process so there would be incentives for private individuals, charities, cities, counties or states to address the problems before the federal government gets involved (likely in that order). On the funding side, tax revenues for poverty alleviation would flow to the central government only when lower-order groups have not been able to adequately address the issues. This means that strong incentives, like 100% federal tax credits for contributions to local or regional poverty alleviation efforts, would exist to encourage individuals and communities to attack the problem at its source. On the disbursement side, requests for federal aid would ordinarily be on an exception basis, data driven, going only to communities unable at the time to help people in need, temporary, and as anonymous as possible to keep politics out of the funding decisions.

In some areas, we already have a good start on this in the U.S. Wealthy Americans can reduce their tax bills by donating money to charities, and amazing gains in poverty reduction can already be connected to some of the foundations established by wealthy people because of this. Older Americans can reduce taxes owed when drawing money from their tax-deferred IRA accumulations if the money goes to approved charities. These kinds of incentives have spurred Americans to donate approximately seven times as much per capita to charities as their European counterparts whose private efforts have been hampered by higher tax rates and government bureaucracies. But the poor have few similar incentives, with the result that the independent efforts needed where poverty is most widespread are often in short supply, and individuals in these places remain relatively powerless to solve problems on their own.

This can only be corrected by incentivizing best practices and providing communities with the resources they need. This would result in poverty-alleviation efforts very different from what we see today. If low property values cause sub-par education when schools are financed by property taxes, other financing methods need to be explored. But this does not mean failure should be rewarded with additional financing. Rather, schools producing the best educational outcomes for the least money should be incentivized to replicate what they do, and parents should have the opportunity to choose the best option, private or public, for their children. And, as with economic enterprises that must offer something as useful or appealing as their competitors to attract and keep loyal patrons, schools will need to adopt the best possible practices for their situations or risk having parents choose another school. Likewise, if communities or states successfully experiment with, e.g., a combination of Educational Savings Accounts, a choice of both public and private schools, and schools financed by a combination of income-based tuition costs and income taxes, and see improvements in literacy or test scores per dollar spent on education, other states can be compelled to follow suit.

And, since schools are just one of many things that have the potential to reduce poverty, best practices, replication, and incentives could also be applied in lots of other areas. If broken or dysfunctional families are contributing to poor educational outcomes, and there are schools, churches, or counseling centers with great track records for mending families, incentives should be implemented to promote access to these resources so their services will grow or replicate. If positive outcomes can be connected to things as diverse as entrepreneurship education, interdisciplinary university majors in poverty alleviation, or even prison reform, these things should be encouraged and incentivized, so other entities can be coerced toward more effective policies.

It should be noted that there should be no discrimination against faith-based institutions when offering incentives. If some religious beliefs or institutions prove to increase character, concern for neighbor, generosity, or educational success, we should want more of these things, not less. Thankfully in the U.S. faith-based charities are increasingly being given equal access to government funds, but this is not the case in most other countries.

But none of this is to imply that government should get out of the poverty-alleviation business. It is not only essential to providing incentives for helping the poor, but it also remains the final safety net for them. And to do this well, it might even have to spend more to spur us to fight what drives people into and keeps people in poverty— things like addictions, racism, financial illiteracy, crime, and family disintegration. In attacking these problems, government would harness market information for assessing alternative approaches to problem-solving and expanding the scope of effective policies. This recognizes that ordinary Americans understand, collectively, far more than centralized bureaucrats ever could and promotes the kind of bottom-up friendship, sense of mutual obligation and respect that can lead to lasting change, things that government checks alone seldom provide.

None of this will be easy, of course. But perhaps it’s a good way to better “share in the sufferings of Christ” and show that we have not “closed our eyes to the cry of the poor.”