It is becoming increasingly clear that government alone has not solved and is not structured to solve the "new wave" of globally proportioned economic problem confronting us today.
It is imperative therefore to better equip policymaking institutions to deal with problems by making the most practical use of one of America's greatest assets: the problem-solving and decisionmaking of the private sector.
The best label I know for this approach is "Anticipatory Analysis." It is an adaptation of what already takes place inside of some of our best-run corporations and a few of our most farsighted government offices. The key lies in improving the ability of the private sector and government to work together toward compatible, identifiable objectives. A good Anticipatory Analysis system would involve the following:
* Early issue recognition. The first step is identifying key economic problems before they become unwieldy and ingrained in the system. This part of the process ought to involve a wide variety of individuals and institutions interested in studying public policy. Though leaders such as major research institutes, centers for corporate strategic planning, the Council of Economic Advisers, and the Joint Economic Committee could try harder to spotlight approaching major economic problems.
* Fact finding and analysis. The next step is developing a body of relevant knowledge and a foundation of facts upon which to base good policy judgments and recommendations. The more clearly a major emerging issue can be spotlighted, the greater the analytical resources that can be attracted to it. Once a major issue comes to be well-recognized there exists a gold mine of manpower, information resources, and analytical tools waiting to be tapped in this country's many university and private research centers and in corporate research departments. There is also a host of government agencies, such as the Congressional Budget Office and the General Accounting Office, which contain impressive analytical capabilities.
* Developing a policy consensus. As soon as an issue is well enough understood, public and private sector leaders can begin to draw upon organizations adept at evaluating research and building consensus. The results of research and evaluation need to be funneled into such vehicles as congressional testimony, presidential commissions, university symposiums, and corporate colloquiums. These forums, if well tailored to an issue, can provide excellent opportunities for repeated discussion and synthesis of views in both public and private sectors. A consensus thus arrived at can, in turn, provide a tested basis for legislation, administration action, and private decisionmaking.
Can business and government cooperate effectively to solve problems? There are encouraging signs that a new type of public-private partnership is already beginning to take root. More and more business executives are speaking out on issues of broad national concern and more and more interest groups are recognizing the importance of promoting overall economic health and stability. Increasingly, business executives are lending their practical expertise to government in such areas as job formation, inner-city revitalization, and energy conservation.
Perhaps the most significant recent example of public-private cooperation can be seen in the new synthetic fuel legislation. The new law places responsibility for developing synthetic fuels plants directly with the private sector but provides for a limited program of government-financed incentives to make that development possible.
"Synfuel fever" began last summer when long gasoline lines made the prospect of producing oil from coal and shale increasingly attractive. Instead of immediately launching a full-scale, totally government-funded synthetic fuels program, Congress and the administration wisely began exploring options, costs, and alternatives.Through almost a year of debate, fact-finding, and analysis, leaders from the private sector testified before Congress, met with administration and congressional officials, and participated in symposiums on synthetic fuels sponsored by both private and government organizations.
As policy on synthetic fuel development took shape, it became increasingly clear that the success of any large-scale program to convert coal and oil shale into oil and gas would depend on the ability and the willingness of the private sector to assume the major financial share of pilot projects. It also became clear that to reduce unnecessary risk and make investment by the private sector more attractive, government had to offer some backup assistance for commercial development to succeed, but should only provide limited financial incentives in the form of loan guarantees, and purchase and price guarantee contracts.
To underscore the private sector's commitment to financing this major new energy project, representatives of 18 banks and insurance companies formally endorsed a program placing maximum feasible reliance on the private sector with limited government financing incentives.
In this way, the congressional conference arrived at the most efficient means of bringing synthetic fuel plants into commercial operation in the shortest time at the lowest public cost.
The synthetic fuels debate was Anticipatory Analysis in action. Through this process, future private sector leaders may develop a deeper comprehension of government objectives and processes. And by working at closer range with the private sector, elected officials will develop a greater and more pragmatic understanding of economic problems and how they can best be dealt with.