The Political Economy of Entitlement

Abstract

Debates over "entitlements" have lacked conceptual clarity because the term has at least six analytically distinct meanings. The psychological "entitlements" that many attack are distinct from the legalistic "entitlements" that others champion. Most importantly, however, entitlements are economic concepts. A benefit provided to all claimants meeting stated eligibility requirements can be termed a "responsive entitlement', its antithesis is a program that arbitrarily caps participation. Similarly, a program whose benefits are defined by the amount required to accomplish some specific purpose is a 'functional entitlement"; it may be juxtaposed with one providing only an arbitrary sum. The market through which public sentiments and claimants' needs govern the generosity of benefits and the number of recipients served can be described in terms offamiliar supply and demand functions. Responsive entitlements allow that market to clear. Artificially capping participation, by contrast, creates the same inefficiencies economists decry in pricecontrolled markets. Benefits lacking functional entitlements also may distort private markets. Moreover, entitlements are crucial to maintaining political transparency. Without them, programs' scope, benefits, and eligibility requirements must be described in arbitrary terms few voters can comprehend. Voters tend to assume programs are entitlements, overestimating the support available to those programs' target populations. Confusion among types of entitlements, and the complexity inherent in nonentitlements, further impedes meaningful debate. Recognizing this, some liberals have sought to avoid debate about costs by creating nonentitlements that they can slowly expand. Conversely, some opponents of means-tested programs have shifted from attacking programs' funding to dismantling responsive and functional entitlements.