In a 1964 book review (“American Business, Public Policy, Case Studies, and Political Theory, World Politics 16 [4]: 677, 693–715), Theodore Lowi challenged the conventional wisdom that politics determined policy. The causal relationship, he argued, ran in the opposite direction: “[F]or every type of policy there is likely to be a distinctive type of political relationship” (1964, 688). In their bold effort to explain why government succeeds (and why it fails), Amihai Glazer and Lawrence Rothenberg again prompt us to examine the relationship between politics and policy, this time by setting the “political machinations” of politicians and interest groups to the side in order to ask: How do economic conditions impact the success or failure of a public policy? To try to determine the success or failure of a policy by examining “only the interaction between politicians and constituencies is like investigating the efficacy of medical treatment by looking only at the motives of physicians and ignoring the biology of different diseases” (p. 2). For Glazer and Rothenberg, an exclusive focus on politics ignores the “biology” (so to speak) of different policies that are best discovered by examining the ways in which rational economic actors respond to government actions. More specifically, they argue that an analysis of public policy based upon four economic constraints—credibility, rational expectations, crowding out or in, and multiple equilibria—will help reveal the kinds of problems that government is most likely able to solve, and why.

To make this argument, the authors examine four policy areas (or government activities) in the first four chapters of the book: macroeconomics, redistribution, regulation, and production. In each chapter, they utilize the aforementioned economic constraints to ask how effective government policy in each of these areas is and might be, and then draw conclusions that cut at conventional wisdom regarding the relationship among political commitment, individual behavior, and effective policy. For example, in the analysis of redistributive policies, the authors argue that there are “trade-offs between developing a credible program (of redistribution) that has a long life and a program that is effective” (p. 71). When a government is committed to redistribution, and that commitment is viewed as credible, the rational expectations of policy recipients may inhibit additional saving, in the case of retirement programs, or the pursuit of work, in the case of employment. Similarly, when the authors examine the question “When can government regulate?” they argue that even in a political era that favors market-based solutions, perceptions of credibility and concerns for the rational expectations of the regulated may push government to prefer command-and-control regulation as a means to encourage investment in the regulatory effort, rather than a free market approach. Again, to focus exclusively on the political dimensions of a policy, such as the high-profile decisions made by central bankers, they argue, is to ignore the impact of rational expectations manifest in decisions made by individuals and firms in reaction to central bank, or other government, actions.

The analysis of how political institutions interact with credibility, rational expectations, crowding out or in, and multiple equilibrium yields some of the most interesting discussion in the book. Drawing upon the work of David Mayhew's (1991) Divided We Govern, for example, the authors discuss the “credibility” associated with public policy established under divided government, in contrast to policy supported by a majority party that could be flipped or changed under a new regime. Similarly interesting discussions surround the interaction of economic constraints with federalism and a series of “good government” measures, such as term limits and government-in-the-sunshine legislation.

And yet, the analysis wavers in its neglect of an extensive literature (referenced briefly on p. 84) that long ago blurred the boundaries between the study of politics, policy, and economics. For several decades, political scientists interested in the functioning and effectiveness of political institutions have adopted the language, assumptions, and models of economics to present what were also often counterintuitive findings about the ability of Congress to control the bureaucracy, about the motivations of legislators to design and pursue good public policy, and about the creation of public agencies designed to fail in the face of political uncertainty and intense political competition. As this literature so richly demonstrates, it is precisely the “economic” behavior or rational expectations of policymakers that often produce policy or institutional dilemmas. In their effort to highlight the types of problems that government can solve and to improve upon government effectiveness, Glazer and Rothenberg ignore this fundamental finding. “Economic constraints” they argue “will always place limitations and costs on what government can accomplish. Failure to integrate such economic logic into policy analyses will obscure what government can and cannot accomplish” (p. 145). But such economic logic has long been part of the political science discussion as to why government institutions behave the way they do and produce the kinds of policy that they do, and it is precisely the rational behavior of policymakers that can determine what factors matter in the course of developing public policy—and often what matters will have nothing to do with the accomplishment of broadly stated goals.

One other limitation of the book's predominantly economic analysis of policy is its heavy reliance upon “credibility” as a key factor in policy success or failure. While the credibility of government—the perception “that government will follow through on the actions promised” (p. 6)—clearly has implications for whether or not a firm will invest in pollution-control technology, whether a grocery store owner will monitor the purchase of cigarettes by minors, or whether members of the public will purchase a home when interest rates are low, the demonstration of credibility is very political and, indeed, has been studied extensively in the form of reputation, autonomy, and influence of a leader or government agency.

Nevertheless, Why Government Succeeds pricks the reader's assumptions about the relationship between politics and public policy. Its counterintuitive findings and “lessons” that rub against democratic sensibilities—such as “policy can benefit from ignorance,” and “inefficiency may be efficient”—challenge the reader to consider the normative underpinnings of what constitutes “good” public policy and policy processes, and to consider the methods employed to analyze and improve upon public policy.