Los Angeles Times

October 15, 2000, Sunday, Valley Edition


Many people say that talk of detaching Los Angeles' San Fernando Valley is divisive. They see the efforts toward new, smaller cities, in the Valley, in San Pedro /Wilmington and in Hollywood, as a reflection of antagonism between residents in different parts of the city. They admonish us to work together toward a greater city, to learn to get along.

They are missing the point. Even if we all love one another to pieces, we can benefit from the smaller local governments that would result from detachment. As we have learned from the world's experiments with various political and economic systems, it is less the innate kindness of individuals and more the structure under which we live that affects how things turn out. Ranking economies on the basis of how nice people are to their neighbors will not allow us to predict which economies prosper. Without institutions that channel individual efforts toward constructive activity (prime among them are those that protect individual property and offer substantial returns to productive activity), countries and their people remain poor. People in poor countries are likely to be as moral and generous as people in the United States, but this hasn't led to a thriving economy.

Imagining a system in which people are more kind and gentle is nice but far inferior to designing a system that provides incentives to harness individual energy and direct it toward desirable outcomes. The lesson is that cities must be structured so that politicians have incentives to direct tax dollars to services that residents desire.

Local control is an important first step. It connects providers to the individuals they serve. Incentives are created that motivate politicians to deal with local issues and meet local needs. The advantage of having smaller cities in Los Angeles is that we would move in the direction of local control.

Smaller governments facilitate monitoring of government decisions and activities by residents. By putting the purchase of services closer to the community level, service providers are under pressure to do a good job. The people they serve are actually hiring them; they are not hired by a bureaucrat downtown.

In a smaller city, if services are not up to par, it is easier to know who is to blame. By choosing an institutional arrangement that makes the provision of city services more transparent and reveals responsibility, we create incentives that motivate public employees to improve services. As things stand today in Los Angeles, responsibility for public services is hard to peg on any one individual. Many problems are left uncorrected.

Increased oversight can create incentives for better, more community-oriented services all across Los Angeles. It is not a matter of one group doing better while others are left behind. In every area of Los Angeles, as government became more local, residents would be drawn toward civic participation. The result would be increased political accountability.

When government is big, individuals detach, knowing that it is difficult to be heard. As a result, politicians have leeway to make choices that are not in our interests. Just last summer, with a huge backlog in the basics--road maintenance and repair, installing street lights and trimming trees--not to mention intolerable levels of crime in some areas of the city, our local politicians chose to help bankroll the Democratic National Convention. In a smaller community with greater citizen participation and more political accountability, incentives work against that sort of misuse of city funds.

The key benefit of smaller cities is that incentives and therefore behavior change. Residents would have a greater incentive to participate, to monitor local government, knowing that their efforts could be of some consequence. More public participation would create incentives for politicians to make choices more in line with the preferences of the community.

Despite the promises of politician after politician, if we want things to improve, we must make structural changes in city government that generate pressure for performance.

Some people are parties to amicable divorces. Why do they break up? Because they know they will be better off apart. It's not that they hate each other, or even that they can't get along. It is just that life has more to offer, and they are willing to bear some pain to get on with their separate lives.

In some ways, that describes the potential for Los Angeles. It is not that the city can't continue as it is, but that structural change that increases political accountability can be expected to lead to improvements in service provision and living conditions.