We have to do something! We hear it all the time. Any time there is a tragedy, or now even a perceived problem, policy makers, news anchors, and everyday citizens demand government take some action that might have prevented it. But all too often the proposed responses do little to actually improve our lives. We become victims of the Do-Something Syndrome. Either the policy doesn’t achieve what it is intended to, there are unintended consequences, or it is actually counterproductive. This shouldn’t come as a huge surprise.
Government works best when it makes generally applicable rules intended to prevent large, foreseeable harms. Government generally performs far worse in responding to highly specific, immediate circumstances. Inherently, everyone gets a voice in a democracy. This is normally a good thing. But when there is a crisis - real or perceived - the emphasis is often on “doing something.” Too often there is disagreement about the problem, much less the best solution. A “fix” is pushed through because someone (government) has to do something!
Case in point: the overreaction by some Oklahoma cities to the supposed food desert crisis. It is indisputable that the rich eat better than the poor. This shouldn't come as a particular surprise — the rich have always had better everything than the poor. But now we can document not only the resulting longer life, we can pinpoint the nutritional deficiencies that create this health gap.
Naturally any inequality is grounds for someone somewhere to get excited, and when it’s a difference in something that demonstrably leads to a longer lifespan, you’ve got a prime candidate for Do-Something Syndrome. Unfortunately, Tulsa and Oklahoma City both fell into the trap of counter-productivity in trying to solve the problem. They created zoning overlays, that designated certain districts where new "small box discount stores" could not open within one mile of an existing "small box discount store" (i.e. dollar store). Both cities assumed that 1) nutritional disparity was a problem government could plausibly solve; 2) they had pinpointed the biggest "culprit"; and 3) they had a solution that would actually improve the root problem, rather than just hurting the supposed “culprit.” The Oklahoma cities failed on all three fronts.
First, the cities determined that there was a problem government could fix. They looked at nutritional disparity, consulted a map, and found that many of the low-nutrition households seemed to be in neighborhoods with relatively few full-line grocery stores. They took this correlation, and assumed causation. They determined that it must be the case that people in these neighborhoods had to travel too far to a full-line grocer, so they turned to unhealthy alternatives at small box discount stores.
By assuming causation, the cities made a big mistake. Correlation does not always imply causation - both correlated effects might stem from a third cause, or they might even be coincidence. Even when two correlated phenomena are in a causal chain, it is a mistake to guess which one is the cause and which one is the effect. Here, the cities guessed that lack of access was the cause, and lower nutritional consumption was the effect. But a recent study showed that reduced access to full-line grocers accounts for at most nine percent of the nutritional disparity. That means the other 91 percent comes down to consumer choice. So, does low access cause consumers to choose less nutritious foods? Or does a consumer preference for less nutritious foods cause grocery stores to be less likely to open in lower income areas?
Second, the cities pinpointed small box discount stores (dollar stores) as the “culprit.” They decided that because these stores offered less fresh meat and produce than a full-line grocery store, they saved money on expensive refrigeration, lowering their overhead costs, and allowing them to undercut full-line grocers on the full range of products offered at the small box stores. They assumed that the dollar stores were crowding out grocers, rather than both stores responding to consumer demand in the area.
Finally, the cities assumed they could help consumers by harming small box discount stores. They put up spacing requirements so no new small box discount store can open within one mile of an existing small box discount store. The cities seemed to believe this would create room for a full-line grocery store. They appear to have taken inspiration from a terrible misstatement of the very real economic law that “in order to demand, you must supply.” That is to say, if you want to buy goods or services, you must produce goods or services to make the money to buy what you want. The common misstatement is that “supply creates its own demand.” If the misstatement were true, it would be understandable for a city to hope that if they reduced the number of dollar stores, and could just get a full-line grocer to open, consumer preferences would switch to the more nutritious foods offered there. Even this last assumption is wrong, since nonperishable foods are just as nutritious as their fresh counterparts, with the added benefit of not rotting if not eaten in a few days.
The Do-Something Syndrome is an understandable gut reaction to serious problems. But most of the time, it is better to investigate the causes of a problem, and carefully think through the ramifications of proposed solutions. Here, the cities have likely created higher prices for the people who shop at small box discount stores. The neighborhoods with the new spacing requirements have gone from contestable markets - places where barriers to entry are low, so existing stores have to charge reasonable prices lest they invite more competition - to oligopoly, where a few firms, secure in the knowledge that no new stores can open, are able to charge higher prices than one would expect to see in a competitive market. The state of Oklahoma explicitly uses a spacing requirement for new car dealers to ensure that they stay in business. It’s a terrible policy, but the state is getting the intended results. In trying to kill off dollar stores, the cities have done the opposite and made them more resilient.
The biggest concern has always been for those few residents who don’t have access to easy transportation outside the so-called food desert. They will be the ones who are most harmed by the higher prices these newly government-protected small box stores can now charge. Those with access to a car will be able to go outside the zone of protectionism and pay market prices.
So the final tally: mistaken belief that the problem is one government can solve, mistaken presumption of cause and effect, mistaken identity of the "culprit," mistaken attempt to harm the “culprits” rather than help the so-called “victims” of the problem, and accidentally help the “culprits” because the plan was not well thought out. Congratulations Tulsa and Oklahoma City, you’ve checked every single box of the Do-Something Syndrome hall-of-shame checklist.
Mike Davis is Research Fellow at 1889 Institute. He can be reached at mdavis@1889institute.org.
The opinions
expressed in this blog are those of the author, and do not necessarily reflect
the official position of 1889 Institute.