The long-term argument for institutional investment is the argument that the alternative — deferring the investment until the crisis makes it unavoidable — consistently costs more and produces less.
The Compound Logic
The long-term argument for institutional investment is the compound interest argument applied to governance: the institutional investment made before the crisis is needed produces the capability that allows the crisis to be managed when it arrives; the institutional investment deferred until the crisis arrives is made under the worst conditions, at the highest cost, with the lowest probability of producing the institutional capability that adequate prior investment would have built. The pandemic preparedness investment not made before COVID-19 was paid for at crisis cost and produced less capability than the prior investment would have. The climate governance investment not made in the decades when carbon concentrations were lower and the transition costs were smaller will be paid for at higher cost and with less remaining time for the transition the physical system requires. The democratic institution investment not made before the erosion reaches the critical threshold will be made in the crisis conditions that make institutional repair most difficult.
The long-term argument is not optimistic about the political economy of institutional investment — the political economy that consistently defers long-term institutional investment in favour of near-term political returns is a structural feature of democratic governance that the long-term argument cannot eliminate. The argument is for the recognition of what the deferral costs, so that the decision to defer is made with clear understanding of its consequences rather than with the obscured accounting that makes deferral appear costless when it is not.
The long-term argument for institutional investment is simple: build the institutions before you need them or pay more to build them after the crisis proves you needed them. The political economy that makes the first option difficult is not an argument against it — it is the governance challenge that the long-term argument must overcome. The case for overcoming it is the compound cost of the failure to do so, which the historical record makes available for anyone willing to read it honestly.
Discussion