An Alaskan Model for Hoosier Reform

September 15, 2008

For release Sept. 17 and thereafter (505 words)

We are told by promoters of the stadiums, convention hotels and other Potemkin projects throughout Indiana that we cannot attract the investment our cities need, that public subsidy is required.
The argument is politically effective because it plays on our economic fear. And like any bogeyman, it cannot be disproved. Nobody who receives favors in the form of rebates, cheap loans, monopoly rights or cash transfers is going to say that they might have invested anyway.
That is what is so instructive about the experience of Alaska Gov. Sarah Palin in dealing with the gas producers over a North Slope pipeline.
Palin was able to prove that the considerations secretly granted a consortium of companies were not necessary to attract their investment. Indeed, the considerations were nothing more than corruption masked as economic development.
In her gubernatorial campaign, Palin proposed making pipeline bidding open and competitive. The oil producers warned that if her reforms were implemented nobody would help build the pipeline.
As it turned out, five groups submitted proposals. Here is Kimberly Strassel of the Wall Street Journal: “And a few months before the Legislature awarded its license to TransCanada this July, Conoco and BP suddenly announced they’d be building their own pipeline with no state inducements whatsoever; they’d suddenly found the money.”

ON A RELATED MATTER, Alaska’s experience contradicts the core recommendation of Indiana’s Kernan-Shepard report — that local governments must be made more efficient through consolidation.

Yes, proponents will grant that appointing rather than electing county sheriffs may have disadvantages, as does forcing rural school districts to consolidate with their football rivals down the road. You have to break some eggs, though, to make an efficient omelet, etc.

But again, given the example of Governor Palin, we might want to think a bit deeper about that.

Isn’t a smaller, more accountable government what we want, not necessarily a more efficient one?

History tells us that “streamlining” government can mean making it larger and more difficult to monitor through democratic processes (Mussolini making the trains run on time). Indeed, the word “efficient” speaks to how resources are used, not the amount of resources required or, most certainly, who gets to use them.

In Alaska, one of the most backward states in the nation by the standards of the Kernan-Shepard report, a self-described hockey mom got elected mayor of a city with a budget little bigger than most Indiana townships.

From there, using nothing more efficient than her small-town common sense, Palin strung together a series of election victories that turned the power structure upside down. And she didn’t have to eliminate a single elected office or bus one child an extra mile to do it.

Now, you may be one of those who think it a bad idea to turn the power structure upside down. If so, consolidation and government efficiency are your tickets.

Some of us, though, will be looking around for Hoosier versions of Sarah Palin.

T. Craig Ladwig is editor of The Indiana Policy Review. Contact him at


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