The Politics of Automobile Insurance Reform: Ideas, Institutions, and Public Policy in North America
Ferguson, William L., Journal of Risk and Insurance
The Politics of Automobile Insurance Reform: Ideas, Institutions, and Public Policy in North America, by Edward L. Lascher, Jr.,1999, Washington: Georgetown University Press
Reviewer: William L. Ferguson, The University of Louisiana at Lafayette
The Politics of Automobile Insurance Reform is one of an ongoing series of scholarly works focusing on "the successes, as well as the problems, of policy formulation and implementation" (Preface) in the area of American governance and public policy Lascher's contribution is a concise, though nonempirical, treatise on how policymakers evaluate likely policy outcomes (e.g., imposing loss costs on various interest groups, perceived success of different solutions) when facing potentially contentious popular issues. A secondary goal is to highlight and extend the idea that "institutions matter" in that, despite many underlying cultural similarities, the underlying structure of the sub-national government systems in Canada and the United States influences policy decisions.
To frame his argument(s), Lascher generally addresses the concept of automobile insurance tort reform but concentrates his analysis on the single issue of no-fault insurance. To support his points, Lascher relies primarily on case studies based on personal interviews, surveys (including a 1995 survey of ARIA members), anecdotes, direct observation of decision-making processes, popular press coverage, and reports prepared by or for governmental bodies or various parties at interest, as well as publicly available insurance industry data. He admits his treatise is rather thin on empirical research regarding public policy aspects of auto or tort reform in general, much less with regard to no-fault. Lascher also does not readily cite or buttress his arguments with the many such empirical studies available from traditional insurance academic publications (e.g., only two citations total in seven full pages of references were from the JRI and both, though excellent pieces, were by Harrington (1992, v. 59 #2, pp.185-201; and 1994, v. 61 #2, pp. 276-294)]. This omission is not inherently bad, however, but it may limit the overall utility of this book to insurance academics. In the final analysis, the focus of Lascher's book is on political science processes, not automobile insurance reforms per se.
The primary thesis Lascher asserts is that the "politics of ideas" matter in addition to "pressure theory" in better explaining more subtle intricacies as to why policies differ across jurisdictions over time. In other words, in addition to responding to the external demands imposed by various potential interest groups (e.g., as is Stigler's Capture Theory), policymakers also may be motivated by more selfish internal reasons (e.g., the desire to make "good public policy" or to advance their personal political careers). Lascher does not assert that these explanations are mutually exclusive. To test his theses, Lascher employs the "story model" of juror decision making wherein policymakers develop causal stories to link facts and events and settle on the one verdict that best fits the story as they perceive it (p. 21).
Two competing "stories" regarding causal factors surrounding high auto premiums and premium growth are developed. …