Opinion: Daily Journal

A Case for Think Tanks

Success has many fathers, as the old saying goes, while failure is an orphan. The ancient historian Tacitus was apparently the first to make this observation, using somewhat-different words, in the context of warfare. But it applies equally well to less-violent struggles for power such as state politics.

Many different kinds of institutions influence electoral and legislative outcomes. Campaigns, political parties, and independent-expenditure groups raise and spend money to advance their preferred candidates or causes. Mass-media outlets receive much of this cash, in the form of ad buys, while also marketing information to voters and often seeking to influence political outcomes through explicit or implicit editorializing. Trade associations, labor unions, and grassroots organizations of various kinds mobilize donors, volunteers, or both to affect elections and legislative votes.

I work for another such institution, a public policy think tank. While think tanks don’t participate in electoral politics, they are often deeply involved in efforts to shape public-policy debates and outcomes. They publish policy research, provide comments and op-eds to the news media, host events and debates, and promote their ideas through print, broadcast, and online media. Some think tanks, including JLF, now house their own media outlets or run education and training programs. Others offer legal representation or public-interest litigation.

If I didn’t believe that think tanks have an important and influential role to play in public policy, I wouldn’t have spent most of my career working in the field. Nevertheless, I sometimes marvel at the outsized role that both boosters and critics claim for think tanks. They can supply intellectual ammunition, yes. But they don’t elect candidates, organize legislative chambers, dominate news reporting, or develop interest-group coalitions for or against legislation.

In logical terms, think tanks and other idea shops have become necessary but insufficient institutions for policy success in modern politics. You need them. But you also need other things. For example, no matter how well-researched and well-written a research paper is, if the policy it recommends is strongly disfavored by current political leaders, the policy is unlikely to be enacted. Over time, perhaps a think tank might convince the rank-and-file members of the party in power of the merits of the policy, after which they might convince the leaders to shift positions. A more likely scenario, however, would be for the policy recommendation to become law after a change of partisan control.

Similarly, while think tanks can make an intellectual case for a given policy, that might not be enough to overcome opposition by interest groups such as industry groups, unions, or professional associations that are also politically active. A potential avenue for success in this case, then, would be for the think tank to identify politically active interest groups that favor the policy and arm them with information with which to take action.

While the political economy of think tanks is still a relatively new subject of inquiry, some scholars have begun to publish papers in the field. A 2011 paper in the Journal of Comparative Economics is directly on point. The authors studied state-based think tanks with a free-market orientation, including the John Locke Foundation, and sought to find a correlation between think tank spending and legislative outcomes. They didn’t find one. Instead, they found a significant correlation between interest-group lobbying and legislative outcomes.

On the other hand, the researchers did find an effect of state think tank spending on public attitudes about issues such as welfare spending and government intervention in private markets. So think tanks can accomplish their important but clearly defined role of developing and marketing ideas. What they can’t do is orchestrate successful lobbying or political campaigns. That’s someone else’s job.

Once like-minded politicians or interest groups come to power, however, think tanks often prove their mettle. The best recent example of this phenomenon can be found in formerly Communist countries in Eastern Europe and Central Asia. After the fall of the Berlin Wall, anti-Communist leaders came to power in most of these countries. They were open to new, market-friendly ideas. During the 1990s and 2000s, 14 of them adopted at least partial privatization of their public pensions and 21 adopted flat-rate income taxes.

These trends prompted two political scientists, Hilary Appel and Mitchell Orenstein, to see an opportunity to evaluate different avenues for disseminating political ideas. Pension privatization was a cause célèbre for the World Bank and other large, well-funded international organizations. The Flat Tax, on the other hand, was espoused only by a relatively small and less-funded network of free-market think tanks. Still, the Flat Tax enjoyed great success.

“This does not mean that resources do not matter,” Appel and Orenstein concluded in the journal Comparative Political Studies, “but that in the case of investor-friendly second-generation reforms, the networks and policy communities they build to spread ideas matter more.”

In other words, under the right circumstances think tanks can be a highly cost-effective investment of dollars for those who wish to change public policy. I think the “right circumstances” exist in North Carolina at the moment, but I admit to a slight bias.

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Hood is president of the John Locke Foundation and author of Our Best Foot Forward: An Investment Strategy for North Carolina’s Economic Recovery, published by JLF in 2012.