How to Allocate Scarce State Resources
Translated from Russian with the help of AI. Original: Russian version
Scarce subsidized state loans, such as the 7-20-25 mortgage programme, should be allocated by transparent social criteria with built-in anti-fraud rules, not on a first-come, first-served basis.
How should scarce state resources be allocated?
As I wrote earlier, there will be a rush and an outcry from those who want to take advantage of limited state loans such as the 7-20-25 programme or car loans. The same goes for any slice of the state pie, which is currently handed out on a very simple principle: first come, first served. In my view, this way of allocating resources is haphazard, ill-considered and aimless. Cheap loans will go not to those who need them most, but to those who are the most nimble and resourceful. Yet the state's aim is not to help the nimble and resourceful, but to help those who need it most. Once the programmes have been adopted, rules are always needed for distributing a limited "commodity" among the population.
What is needed here are simple principles of allocation. The rules only need to screen out enough applicants so that those who remain can be covered by the loans available over the next year. These people can then be put in a queue. Given a date and a rough approval rate, and knowing how many loans the state can afford, this is not difficult at all.
Criteria should be introduced on the basis of state priorities. For example, we first help socially vulnerable groups. If there are probably very many of them, we select only single parents with children, who clearly deserve to be first in line. And so on, until demand matches supply. Then, as demand from these categories is satisfied, we move on to the next ones.
It is also important to build in anti-fraud measures. We remember cases in which very many people divorced and gave up their children in order to get money from the state. This, too, can be handled by rules. For instance, one can require that a person have held such a status for at least a year and have official earnings. The main thing is to announce all of this in advance, and to state that the rules will be updated after a year to rule out future fraud.