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"Nobody could think himself injured by the drinking of another man, though he took a good draught,
who had a whole river of the same water left him to quench his thirst: and the case of land and water,
where there is enough of both, is perfectly the same."
—John Locke, Two Treatises of Government (1689)
In 2015, a public health scandal enveloped the United States when news broke in Flint, Michigan, that the city’s water supply had unacceptably high levels of lead. At the time, it was unimaginable to Americans and the rest of the world that such an event could occur in the most powerful nation on the planet. Although the water in Flint has returned to acceptable quality and water pipes are being replaced, the incident nevertheless shook public trust in U.S. government agencies, especially since the city government initially claimed that lead levels were within allowable limits. Safe drinking water is a basic public good that people expect from their government. Because public goods—such as water, electricity, roads, national defense, and welfare benefits—are non-excludable and nonrivalrous, government intervention is needed to ensure an adequate supply.
One would expect that, because the United States is the world’s largest economy, public goods provision would be high. But in 2015 it ranked tenth in terms of the human development index (HDI), behind much smaller economies such as Singapore. The United States also has strong institutions that should have the ability to redistribute resources to provide for public goods. In their study of the New Deal in the United States in the 1930s, Theda Skocpol and Kenneth Finegold found that the U.S. government’s ability to intervene in the economy made New Deal redistribution policies more effective. The United States’ democratic system should also lead to adequate public goods. Studies that focus on the impact of regime type on public goods provision show that democracies outperform autocracies. This is because the need to win elections with a large voter base means that democratic governments are incentivized to produce public goods, whereas autocracies need only cater to the small group in power.
However, economic wealth, institutional capacity, and regime type do not adequately explain why some countries produce more public goods than others. Certainly, a high level of GDP facilitates a government’s efforts to provide goods to its people. However, there is no direct causal relationship between economic wealth and redistribution policies. If economic wealth were the determining factor, the United States, being the largest economy, should rank highest, or at least among the very highest, in terms of HDI. There is also no clear relationship between a country’s institutional strength and scope, and its provision of public goods. First, there is no guarantee that states with high capacity will provide more public goods; predatory states have high extractive capacity. Second, states with high capacity may not necessarily prioritize the production of public goods. In cultures that traditionally rely on family support or promote self-help, the government may put other priorities ahead of the development of a social safety net. Theories based on regime type are also flawed. Barbara Geddes and John Dunn, for instance, have argued that democracies do not automatically produce high levels of public goods. Certain preconditions and incentives must be in place for governments to channel resources and capacity to the production of public goods.
Informal institutions and normative principles may better explain how and why higher quantities of public goods are produced. Social contracts, as an informal institutions, go a long way in explaining why some countries produce more public goods than others. A social contract, as defined by Jean-Jacques Rousseau, Thomas Hobbes, and John Locke, is an agreement between state and society, in which citizens consent to give up certain rights to their government in exchange for the government’s obligation to provide for their needs. It is based on reciprocity, and the government’s legitimacy is aligned with the expectations of the people. Although a social contract is unwritten and not legally binding, it nevertheless constrains governments to act according to a certain set of principles. Failure to abide by the terms of a social contract results in punishments for citizens or sanctions for governments, such as losing elections or being booted out of power through more violent means. Because of the threat of these reprisals, state and society engage in a repeated pattern of behavior that upholds the bargain between them. The existence of a social contract can thus be inferred from a country’s constitution, laws, and policies; official discourses and statements; and the narratives that governments construct.
Different types of social contracts result in different levels of public goods provision. For example, in the case of Singapore, a social contract premised on economic and social development has been forged since independence in 1965. To paraphrase the words of the National Pledge, the social contract between the Singaporean government and Singaporeans is based on the delivery of social public goods (“justice and equality”) and economic public goods (“prosperity and progress for our nation”). A contractual relationship exists between the government and Singaporeans. In his 2015 National Day Rally speech, Prime Minister Lee Hsien Loong pointed to this relationship:
"We have kept faith between the Government and the people. We have built up this bond between the Government and the people over the past 50 years. The Government has kept its promises, what we said we would do, we did do… We do right by Singaporeans. In turn, our people expect the Government to perform, trust the Government to have their interests at heart and support the Government and its decisions to work for the common good."
The impact of Singapore’s performance-based social contract is seen in the government’s ability to deliver public services. Many amenities and public services—such as health, education, and housing — are heavily subsidized even though the Singaporean government does not embrace the idea of a welfare state. In the area of drinking water, every Singaporean household has access to potable water that can be drunk directly from the faucet. The proportion of water loss is also very low. The Singapore Public Utilities Board is able to set water tariffs at will and tap capital markets for funds. It is able to recover costs, which helps to ensure that pipelines are well maintained.
The water crisis in Flint should not have come as a surprise. The American Constitution is based on a Lockean social contract, that is, the basic right to “life, liberty, and property.” One would expect the Lockean social contract to lead the American government to prioritize public goods. After all, Locke’s treatises not only guaranteed the right to private property but also ensured that public goods are provided for. However, Locke also advocated for a limited government, which means that government involvement in public goods provision is likely to be restricted. Redistribution is more difficult without government intervention and regulation. As Atul Kohli puts it, “Next to making war, redistributive reform is probably the most difficult task a state can undertake.”
But does this mean that the current situation of decrepit public infrastructure in the United States, as exemplified by the Flint water crisis, must persist? Social contracts, like other informal institutions, rules, and norms, can change over time, even though the process may be laborious and contentious. The basis for higher levels of public goods already exists in the Lockean social contract. Perhaps the American government and Americans could consider how to reorient their social contract toward the production of a higher level of public goods, commensurate with the United States’ economic wealth and high institutional capacity.
This article was first published in Foreign Affairs in 2018 and is drawn from Assistant Professor Selina Ho's book, Thirsty Cities: Social Contracts and Public Goods Provision in China and India.
Photo by Zhu Hongzhi on Unsplash