Making Higher Education Affordable: Policy Design in Postwar America

During the 1996 presidential campaign, incumbent Bill Clinton proposed a new form of aid lodged in the nation's tax code to make higher education more affordable. Even though Clinton's Hope Scholarship and Lifetime Learning Credits targeted middle-class families who felt the squeeze of rising college tuition, some Democrats and education advocates criticized them as an inefficient way of achieving generally laudable goals. Essentially, the credits would not help those who needed assistance most or those whose decision about whether to attend college hinged on financial aid.¹ Why would Clinton choose an inefficient tool, like tax expenditures, to achieve generally agreed-upon policy goals? The question points to a weakness in the literature on policy tools. Although we know a great deal about the variety of tools and their relative efficiency, we have a much harder time explaining how and why particular instruments are chosen.

Conventional wisdom and policy insiders tell us that Clinton's decision was "political": in an election year, the president proposed to give the country both a tax cut and a social program all in one. Scholarly research on tax expenditures likewise points to their attractive features: they can be tucked into omnibus revenue bills, do not require additional bureaucracies, may be framed as tax relief or social welfare, and have hidden costs.² Although these accounts at first blush are persuasive, they do not provide scholars with a way of analyzing why a particular tool is chosen at a given time or over other options. In other words, if tax expenditures are so attractive, why were they not employed for higher education in the 1970s, or, alternatively, why did even more policies enacted in the 1990s not use them?

To understand why policymakers choose particular tools, we need to look not only to the context surrounding political decisions at any one point in time (a "snapshot" of policy decisions) but also to take into account previous policy choices that may constrain current choices (a "moving picture" approach).³ In other words, we cannot understand tool choice without understanding the past. Past decisions are neither irrelevant nor merely background to current controversies. Instead, "initial moves in a particular direction encourage further movement along the same path. Over time, 'the road not chosen' becomes an increasingly distant, increasingly unreachable alternative."⁴ Ths, to understand Clinton's decision (and policymakers' decisions more generally), this article examines the politics behind policy design in one area—aid for higher education—over time. Drawing on political scientist Paul Manna's concepts of capacity, or the ability to execute programs, and license, political justification, I show how these two variables operate jointly within policy areas to narrow the range of tools policymakers are willing to consider at any historical point in time and determine which of the remaining tools is most likely to be selected. Ultimately, I find policymakers often can achieve their policy goals if they are willing to compromise on the means to achieve them.

Politics and Tool Choice

The shifting emphasis in the public policy literature from state agencies to policy instruments or tools has opened up new ways of thinking about policy execution, broadening the focus from state administrators to networks that include private and nonprofit organizations.⁵ The burgeoning literature on policy instruments has addressed extensively what categories of tools are available to policymakers⁶ and how effective they are in achieving their policy goals,⁷ but it has yet to make inroads into why tools are chosen. The question of why, in particular, requires analysis over time.

The extensive literature on categories and their effectiveness means that questions of policy design are instead often answered as applications of classificatory frameworks.⁸ As Lester Salamon explains, "The choice of program tool is a political, and not just an economic, issue: it involves important questions of power and purpose as well as of equity and efficiency."⁹ A smaller body of literature on tool choice separates it from the classificatory frameworks and efficiency arguments. Instead, these authors situate policy design within the larger international framework, arguing that...