When the Paycheck Protection Program was announced it was clear that administrative burdens would matter. @pamela_herd & I predicted: "Only businesses with connections and capacity to manage the paperwork stand to receive the limited funds." So it goes:
nytimes.com/2020/04/22/bus…
nytimes.com/2020/04/22/bus…
Administrative burdens are distributive: some groups will be less able to overcome them.
One mechanism by which this happens is that gatekeepers discriminate between clients.
For the PPP, Banks prioritized existing and wealthy customers for help. nytimes.com/2020/04/22/bus…
One mechanism by which this happens is that gatekeepers discriminate between clients.
For the PPP, Banks prioritized existing and wealthy customers for help. nytimes.com/2020/04/22/bus…
The government made private banks the gatekeepers for taxpayer dollars.
Banks, in turn, put their wealthiest customers to the front o the line to receive those dollars. These clients where sheltered from administrative burdens.
Banks, in turn, put their wealthiest customers to the front o the line to receive those dollars. These clients where sheltered from administrative burdens.
While the Bank's wealthiest clients were given a VIP treatment that allowed them to bypass burdens, less-connected businesses were more or less left on their own, dealing with broken websites and the promise of a call-back. Then the money ran out.
Private actors play different roles with administrative burdens.
Private *providers* of public services behave consistently with financial incentives, even if it means an erosion of due process we would expect from a public provider.
Private *providers* of public services behave consistently with financial incentives, even if it means an erosion of due process we would expect from a public provider.
