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What’s a stakeholder, anyway?

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The term "stakeholders" is used in policy debates frequently. It sounds good and steeped in important involvement. It seems less detached and predatory than "interested parties." It’s an accepted convention of speech.

By conventional use, it rarely denotes those who best qualify for the term. Politically speaking, the citizens themselves — though they have the most at stake — aren’t thought of as stakeholders.

In Lincoln’s memorable description, the American system is "Government of the people, by the people, for the people." On the other hand, stakeholders tend to be of the lobbies, by the politicians, for the special interests.

My column in Carolina Journal this week discussed the term in the context of a late addition to a farm bill. An excerpt:

[W]hat it would establish is a "Renewable Energy Economic Development Study Committee." In other words, a committee to decide how best to find an end run around the loss of the investment tax credit and keep throwing other people’s money involuntarily at unsustainable renewable energy projects.

Just from the name one can tell the thumbs are on the scale. If that wasn’t enough, reading the committee makeup makes it fairly certain the committee findings would be geared toward more artificial, taxpayer support of renewable energy….

This would be what’s known as a "stakeholders" study committee, in which representatives of the various "communities" with a supposed stake in the issue get together and decide what’s the best for everybody. Those familiar with politics know how this goes: it’s basically cronyism gussied up with a doily of process.

That provision has since been pulled.

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Jon Sanders is an economist studying state regulations, that spreading kudzu of invasive government and unintended consequences. As director of regulatory studies and research editor at the John Locke Foundation, Jon gets in the weeds of all kinds of policy… ...

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