The Unintended Consequences of Public Policy

By Thomas Hall

Government policies created for one set of purposes almost always generate additional results that were not part of the original plan. Very often these unintended consequences are seriously adverse, and in some cases are so severe as to render the policy a failure.

In Aftermath, noted economist Thomas Hall examines four major instances of significant unintended consequences, all of them negative, resulting from major public policies: the federal income tax, cigarette taxes, minimum wage laws, and alcohol prohibition. Each widespread, well known policy was instituted as a positive measure, but almost immediately gave rise to enormously damaging consequences and harmful side effects. What were these terrible consequences? Hall demonstrates how these policies played a significant role in creating America’s vast welfare state, criminal activities, a bloated government hungry for more revenue, smuggling, a scarcity of jobs for teenagers and the working poor, corrupt public officials, overcrowded prisons, and much more. Not exactly what the originators had foreseen. Hall’s exploration of these four iconic policies offers powerful optics for examining current and proposed policies, and he provides an overview of the new and emerging consequences of the Affordable Care Act, the Dodd‐​Frank Act, and the war on drugs.

With the pace of government policymaking continuing unabated, Hall’s insights on how to examine and minimize the potential outcomes of bureaucratic activity before they can potentially harm the public—in ways not intended or anticipated—are more necessary and vital than ever before.

Praise for the book

“Professor Hall has written a masterful treatise on how well‐​intended government policies can have unforeseen side effects that reduce the general welfare and that are, in some extreme instances, destructive of society. In addition, Professor Hall shows how economic theory might be used to predict these adverse consequences and to design policies that minimize their impact.”
—T. Windsor Fields, Professor of Economics, James Madison University

“Often, policies that look good on paper or sound promising when uttered by a politician end up having consequences that were never intended. Indeed, there are few ideas in economics as important, powerful, and enduring as ‘the law of unintended consequences.’ This book documents many such cases arising out of some of the most far‐​reaching economic policy innovations of the past hundred years, including the creation of the income tax, the expansion of entitlement programs, and the minimum wage. It is as entertaining as it is thoroughly researched.”
—Jeffrey R. Brown, PhD, Karnes Professor of Finance, University of Illinois at Urbana‐​Champaign

About the Author

Thomas E. Hall is a professor of economics at Miami University in Oxford, Ohio where he teaches classes on macroeconomics, business cycles, and the Great Depression. He received his BA from the University of Colorado, and his MA and PhD degrees from the University of California–Santa Barbara. He has written several articles in applied macroeconomics, and authored Business Cycles: The Nature and Causes of Economic Fluctuations; The Great Depression: An International Disaster of Perverse Economic Policies (with J.D. Ferguson); and The Rotten Fruits of Economic Controls and the Rise From the Ashes, 1965–1989.