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Targeting in Social Programs: Avoiding Bad Bets, Removing Bad Apples

Wednesday November 2006


Peter H. Schuck Simeon E. Baldwin Professor of Law, Yale University
Richard J. Zeckhauser Frank P. Ramsey Professor of Political Economy, Kennedy School of Government at Harvard University

Social programs provide important resources to those in need, including medical care, unemployment benefits, and food stamps. The success of such programs, though, depends on directing resources where they will do the most good.

Prominent legal scholar Peter Schuck and leading economist Richard Zeckhauser demonstrate how two groups divert crucial resources and jeopardize overall success. So-called “bad bets” receive costly public assistance yet derive little benefit from it compared with other claimants, while “bad apples” undermine the ability of deserving recipients to benefit.

Misallocating resources to bad bets and bad apples does more than waste money. It also makes it harder to achieve desired policy outcomes, and it erodes support for public programs.

The authors will detail the challenges of targeting assistance and offer a rigorous framework for analyzing difficult choices. Examining four areas—education, public housing, homeless shelters, and medical care—they will outline policy changes that could minimize the bad bets and bad apples problems.

Professor Schuck’s and Professor Zeckhauser’s insights offer guidance as to how to ensure that social welfare programs are run effectively.