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Casey Mulligan: Government Marketing 101



Living in an interconnected world, we have an interest in choices of others. It matters to us, for example, how they manage their health or whether (or how long) they attend school. Rather than encouraging prosocial behavior, government intervention often undermines it.

The private and public sectors have different incentives when it comes to producing, distributing, and promoting a product. For-profit companies aim to generate the profits that create value for their owners. Public officials aim to stay in office and enhance the power they have while in office.

The public\u2013private difference is especially stark when it comes to the advertising and marketing activities that could increase the fraction of the population that uses a good, whether it be health insurance, schooling, vaccines, or other goods with social benefits. In the private sector, the purpose of product advertising and marketing is to generate profit by making potential consumers aware of the product as well as increasing the intensity of their interest.

A public official may gain some political favor by touting policies he or she claims have expanded prosocial behaviors. Genuinely expanding those behaviors would contribute to the touted metrics, but so would fudging the data. More important, public marketing campaigns can be used to target political opponents even while the side effect is often a reduction in the behaviors that public intervention is supposed to encourage.

Take the Covid-19 vaccines developed in 2020. During the vice-presidential debate with Mike Pence, then-candidate Kamala Harris said , If Donald Trump tells us that we should take it, I'm not taking it. Later when the Biden-Harris administration took office, it promoted vaccines and demonized the vaccine hesitant, who by then were disproportionately Trump supporters (although significant numbers of blue-state, inner-city residents were also hesitant).

Politicizing vaccines was not good for vaccine distribution, but it was good for the politicians. President Biden mandated the vaccine among government employees (an attempt to extend this regime to employees at any private company with more than 100 employees had to be abandoned after the Supreme Court intervened). Many blue-city mayors excluded the unvaccinated from restaurants and other public and commercial venues. We can debate whether these measures improved public health — at least one study finds mixed results — but they obviously are effective tools for punishing political opponents in the name of public health.

Unlike in the case of more loosely regulated private markets that make it easy for new products to be launched, the vaccine "gap" could not so easily be filled in with a vaccine or other preventive innovation that would appeal to the vaccine hesitant. The Food and Drug Administration requires a lengthy and costly review process before a new medical product can be sold. The FDA also regulates advertising, so even a company discovering that a "natural" remedy could prevent or cure Covid-19 would have to clear regulatory obstacles before getting the word out to patients.

The Affordable Care Act was intended to encourage people to sign up for health insurance but fell well short of its goal for similar reasons. Large segments of the public negatively viewed the ACA as Obamacare. The ACA imposed a hefty tax penalty on those refusing to purchase health-insurance plans, while the Obama administration revised regulations to prohibit the plans that many consumers preferred. Obamacare became such a pejorative brand name that tens of thousands of consumers paid the tax penalty rather than signing up for a free Obamacare plan for which they were eligible.

Public schools have also increasingly redesigned their product in ways that offend and anger the political opponents of public officials. In 2020 and 2021, it was remote learning. Curriculum and even bathroom rules increasingly become political footballs. All of this undermines the purported justification for government intervention in schooling, which is to advance learning for all students.

When we have a good or service whose wide distribution is in the public interest, let's leave the advertising and marketing to private providers. They stand to succeed from enlarging their customer base rather than scoring political points.

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When we have a good or service whose wide distribution is in the public interest, let's leave the advertising and marketing to private providers.

Casey B. Mulligan is a professor of economics at the University of Chicago's Kenneth C. Griffin Department of Economics, and served as the chief economist of the White House Council of Economic Advisers in 2018\u201319. He is also the author of You're Hired! Untold Successes and Failures of a Populist President, which details conflicts between President Trump and special interests.


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Posted: June 2, 2022 Thursday 06:30 AM