Public Interest - Problems With The Ex Post or Consequential Approach

Problems With The Ex Post or Consequential Approach

The definitions of public interest based on the ex post or consequential approach are unavoidably debatable, leading to ambiguity and confusion.

Based on the ex post approach, for instance, there are different views on how many members of the public must benefit from an action before it can be declared to be in the public interest: at one extreme, an action has to benefit every single member of society in order to be truly in the public interest; at the other extreme, any action can be in the public interest as long as it benefits some of the population and harms none. But these extreme views are clearly not very useful in practice, since most cases of public policy involve some people gaining and some people losing.

Nicholas Kaldor and John Hicks offer two alternative but related ways to resolve the problem. The basic concept is that the gainers must gain more than the losers lose. Kaldor stated that the gainers must be able to compensate all the losers and still go along with the change, if the change is in the public interest. Hicks stated that the losers must NOT be able to bribe the gainers from forgoing the change, if the change is good for the public interest. It is observed that the Kaldorian position, if the compensations actually take place, is no different from the Pareto improvement criterion for enhancing social welfare. But if compensations do not actually take place, with gainers merely "potentially compensating the losers," people will not come to a consensus and agree that the change enhances the public interest.

But it should be clear that some acts in the public interest can be bad for some individuals. There may be an agreement that some interests are unique to the public. Stephen Krasner, a political scientist used a similar methodology in his book Defending the National Interest. Krasner identifies cases in which no corporate interest is found in US foreign policy in order to identify and analyze a national interest. The ex ante approach to the definition of the public interest would encompass this.