10 Well-Intentioned Government Programs That Backfired

Copyright 2016 by Gary L. Pullman

It may be true, as some claim, that the road to hell is paved with good intentions, but that observation hasn't stopped governments at the city, state, and national levels from establishing programs that, although well-intentioned, sometimes backfire. In such cases, the programs end up doing the opposite of what they were intended to do. Other times, they may be partially effective, but they introduce unanticipated problems that offset, negate, or altogether eliminate the benefits the programs were intended to provide.

It seems that, at whatever level, governments cannot help but meddle in citizens' affairs, creating as many, if not more, problems than they seek to correct. Here's our list of 10 well-intentioned government programs that backfired.

10 School Lunch Program

Like many American first ladies before her, Michelle Obama championed a cause she believed would improve the quality of life in the United States. By establishing new nutritional standards for public school lunches, she hoped her program would help reduce childhood obesity. Instead, childhood obesity has increased. The country's students haven't been keen on the menu changes, and, a study by the University of Connecticut’s Rudd Center for Food Policy & Obesity shows “the percentage of students selecting vegetables significantly decreased from 68 [percent] in 2012 to 62 [percent] in 2013.” In 2014, the percentage dropped even further. After rising significantly, the percentage of students who chose fruit also dropped sharply in 2014. The study indicated “salad did not fare much better” than broccoli, which was chosen only 38 percent of the time. In general, the 2012 Healthy Hunger-Free Kids Act has backfired.

9 Welfare Drug-Testing Programs

In an effort to identify drug-dependent welfare recipients, several U. S. states have instituted drug-testing for individuals seeking to enroll in such programs. After spending approximately $1 million dollars on testing, the states have discovered “needy applicants” actually use drugs less often than the rest of the public. Critics contend tax dollars could be better spent on job training, health care assistance, and education. Other problems with drug-testing programs, critics argue, is they don't necessarily include treatment for the few people who do have a drug-dependency problem and they may deny funds or food stamps to the children of impoverished drug users. In any case, the expenditure of tax dollars appears disproportionate to the number of individuals abusing drugs, and the programs cost taxpayers more money than they save them. 

8 Car-Buyers Incentive Program

Bangkok Traffic

Hoping to jump start its flagging automobile manufacturing industry, Thailand initiated “an incentive program for first-time carbuyers.” Instead of reinvigorating the industry, the program created an unsustainable “boom” in car purchases. Buying “collapsed once the tax breaks expired,” and 120,000 of the 1.2 million Thais who took advantage of the incentive program defaulted on their loans. As a result, “Japanese automakers, who control 80 percent of the local market, reported a 30 percent drop in sales on average in the second quarter of 2013,” and dealers' prices fell sharply. 

7 Cigarette-Recycling Program

Vancouver's “well-intentioned pilot” cigarette-recycling program wasn't well planned, officials admitted. The city hoped to reduce unsightly litter while promoting environmental cleanliness as part of its Greenest City 2020 Action Plan. In installing 110 cigarette butt-collection boxes downtown, the city broke local bylaws, as some of the boxes are within six meters (feet) “of doors, windows and air intakes,” which violates the city's “buffer zone,” which was designed to “protect people from secondhand [cigarette] smoke.” In addition, officials are concerned that the presence of the receptacles might suggest smoking is “more socially acceptable” downtown. Before implementing the program, officials failed to research whether the recycling program would affect smoking rates or reduce the hazards of secondhand cigarette smoke. There may be easier, safer, and less expensive ways to promote cigarette butt recycling. Dr. Stuart Kreisman, an endocrinologist, recommended requiring “a deposit of $1 per pack of 20 cigarettes, refundable to the buyer upon return of the 20 butts.” He also recommended the cigarette companies participate in the “deposit program.”

6 Payment-in-Kind Program

If farmers agree not to plant portions of their land, the U. S. government gives them payment-in-kind (PIK) certificates. These certificates, equal to the volume of the crops the farmers agreed not to plant, are redeemable for surplus crops the government already owns. The value of these crops is based on their market price at the time the certificates are issued. Many farmers sell the anticipated PIK crops before they actually harvest their own fields or receive the PIK crops the government owes them. 

Intended to support the depressed “farming economy by reducing surpluses” in order to match supply with demand, the Payment-in-kind Program cost cotton farmers much more than anyone anticipated. Officials planned to shell out 4.1 million bales of cotton to farmers, but there was a “shortfall” of 700,000 bales. The PIK program requires participating farmers to make up the difference, which means they must “buy cotton on the open market, at higher prices than their PIK certificates are worth. 

In addition, farmers are now short the cotton they've already sold, based on their anticipation of the government's PIK cotton. They must buy the cotton they owe their buyers, at higher, current market prices. Thus, they are doubly short-changed. Outraged cotton farmers made their displeasure known, and lawmakers passed legislation to reimburse their constituents for their out-of-pocket losses. The reimbursement has also angered voters, because the bailout will cost American taxpayers $200 million. 

5 Land Redistribution Program

In Venezuela, President Hugo Chavez is playing Robin Hood, giving big landowner's land to the poor. This forced redistribution of land, he believes, will increase crop production and “end dependence on food imports.” The program is legal, Chavez said, because the land belongs to the state. So far, the government has redistributed 5 million acres of unused or expropriated land. Although, in a few cases, the program has worked as intended, overall, it has backfired. With “no irrigation” or “credit” from the government, much of the land cannot be worked and once-productive farms now yield few, if any, crops.  

4 Foreign Workers Program “Fixes”

Canada's Foreign Workers Program has caused more problems than it's solved. That's what many Canadian businesses contend, and policymakers responded, hastening, in an effort to appease constituents, to “fix” the program's alleged contradictions and abuses. However, the fixes themselves have garnered hostility and complaints. Temporary worker application fees have increased dramatically. There will be more “low-skilled” workers, too, now that this designation is based on the minimum wage rather than “a widely accepted standardized list of occupations.” Temporary workers are being phased out in provinces in which the unemployment rate is above 6 percent. “Red tape” and “higher application fees” also affect highly skilled and professional “seasonal and transient workers” by requiring them to repeatedly complete numerous applications. Businesses as varied as fast-food restaurants, insurance companies, hospitals, banks, farms, resorts, and fish plants complain revisions to the Foreign Workers Program will make it harder, not easier, for them to find dependable, low-cost employees and to compete in a global workplace.

3 Parking Program

Oslo has angered residents three times over. First, they're unhappy about higher parking fees. Second, they're irritated that they sometimes can't find a place to park. Third, they're outraged the parking program has cost them millions of Norwegian krones (NOK). Seeking to “reduce vehicle use,” city leaders required drivers to park for longer periods and upped parking fees by 50 percent. Motorists responded by finding alternative places to park, with the result that the city has not obtained the NOK 80 million (US$9.8 million) “in additional revenue” it anticipated collecting, and has lost NOK 85 million (US$10.4 million) of the funds the city had budgeted. In addition, electric cars are not required to pay to park, and their number has grown greatly in the recent past. 

2 Distressed Asset Stabilization Program

The U. S. Distressed Asset Stabilization Program was intended to remove “non-performing mortgages” from banks' accounts so banks could make the terms related to the loans easier for homeowners to pay. Instead, investors with deep pockets have made even more money from them. “For-profit entities,” mostly “private-equity firms,” have purchased 97 percent of these mortgages. Instead of working with the homeowners, the companies simply “dump the mortgages,” collecting insurance for the difference between what homeowners been paid and what they owe on the mortgages. After foreclosure on the properties, the equity firms rent the houses or “even sell securities based on future rent receipts.” Instead of helping homeowners refinance their mortgages, the program has led to more foreclosures and additional profits for banks.

1. Car-rationing Program

New Delhi traffic

In an effort to remedy its pollution problem, New Delhi, India, experimented with a car-rationing program. For a 2-week period, the law allowed vehicle owners to drive only every other day. The alternate days they could drive were determined by whether their license plates ended in even or odd numbers. To bypass the law's requirements, motorists sought to buy a second vehicle. When sold, used cars retain their license plates, so those with even-number plates sought to purchase cars with odd-numbered plates, and vice-versa. The program, intended to reduce the number of cars traveling on New Delhi's streets, backfired, as more people bought and drove more cars.