Bureaucracy Is Discretionary, Not Automatic
There are no atheists in foxholes.
With the world facing indefinite consequences in the initial stages of the Covid pandemic, the US government instituted Operation Warp Speed: a public-private partnership to develop a rapid vaccine against the virus. It was a miraculous success.
Involving the Departments of Health and Human Services and Defense, the federal government launched the initiative (cited in The Hill) on May 15, 2020 with two areas of focus: speed, and safety.
“Former President Donald Trump formally announced Operation Warp Speed (OWS) on May 15, 2020. OWS was constituted as a projected $18 billion business-government-military partnership, charged to “produce and deliver 300 million doses of safe and effective vaccines with the initial doses available by January 2021, as part of a broader strategy to accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics.” No date was set for fulfilling the 300 million doses target, other than the understanding that it would be “accelerated” relative to conventional standards.”
Experts were skeptical of the feasibility of this project.
“Experts have noted that a timeline of even 12 to 18 months is optimistic. The first Food and Drug Administration-approved vaccine for the Ebola virus was not until December 2019 despite a peak in outbreaks between 2014 and 2016.”
And here is more from the article in The Hill:
“It should be emphasized that OWS was launched to almost universal skepticism and even scorn. At the time of OWS’s launch in Spring 2020, a strong consensus prevailed among media, public-health experts, consultants, and betting markets that regulatory approval by the end of 2020 and the accelerated delivery of 300 million doses were unrealistic goals.”
In June 20202, The Lancet noted the challenges to vaccine development:
“Vaccine development is typically a long game. The US Food and Drug Administration only approved a first vaccine against Ebola virus last year, 43 years after the deadly virus was discovered. Vaccinologists have made little headway with HIV or respiratory syncytial virus, despite huge investments. On average, it takes 10 years to develop a vaccine. With the COVID-19 crisis looming, everyone is hoping that this time will be different.”
Anthony Fauci, then-Director of the US National Institute of Allergy and Infectious Disease and hero of the AIDS epidemic response in the US was leery, as well.
“Fauci, director of the US National Institute of Allergy and Infectious Disease, said that the earliest the US could possibly get a vaccine would be in 12 or even 18 months — "at least."”
Here’s Vanity Fair, CNN, the New York Times, and McKinsey & Co cited in The Hill.
“The media echoed general skepticism about OWS in the Spring of 2020. Vanity Fair in its May 28, 2020 edition characterized OWS “as dangerous and likely to fail.” CNN complained that OWS neglected “tried and true” procedures for vaccine development in favor of new and untested methods. A New York Times article dated April 30, 2020 somberly states: “Our record for developing an entirely new vaccine is at least four years — more time than the public or the economy can tolerate social-distancing orders.”
“Similar skepticism was expressed by McKinsey Consulting. In its June 1, 2020 COVID report, McKinsey warned that only one vaccine had started phase 2 clinical trials and that 21 months has been the shortest time between phase 2 and 3.”
The balance of bets in prediction markets skewed pessimistic, too.
“Prediction and betting markets were also wagering as late as July 15, 2020 against timely approval. One of the largest public prediction markets put the odds of approval by January 2021 at less than one in three and that the best chance was after the first quarter of 2021. Another major online prediction market put the chances of a vaccine being mass-produced before January 2021 at one in five.”
According to The Hill, the FDA granted emergency use authorization for vaccines from Pfizer and from Moderna for those over the age of sixteen by December. The first Americans to receive the shot did so on December 15, 2020, seven months after launching the program. By the end of January 2021, fifty million initial doses were available, of which thirty million had been administered. By the end of March 2021, roughly 240 million doses were on track for delivery, with a total of 800 million doses ordered for the end of July 2022.
This was ahead of schedule.
“It was OWS’s buying of vaccines prior to regulatory approval that shortened the time between approval and scaling-up of manufacturing. Remarkably, the Pfizer vaccine was administered five days after FDA approval. A $483 million grant facilitated Moderna’s partnering with a major U.S.–Swiss pharma manufacturing company back in July 2020. Other contenders for FDA approval, such as Pfizer and Johnson & Johnson, entered early on into similar manufacturing arrangements.”
At a high-level, there are several sequential steps in drug discovery and validation:
· Selection of vaccine candidates (with different mechanisms to avoid concentration of risk)
· Development
· Completion of clinical trials
· Manufacturing
Given the costs and risks involved with drug discovery and regulatory approval, drug development companies take a milestone-based approach, investing incrementally at each stage, contingent upon success. Usually, a company would not invest in a Clinical Phase 2 trial until the drug had passed through Clinical Phase 1 first. With Warp Speed, the companies obtained regulatory confidence that enabled parallelizing (at least partially) some of these steps.
The GAO discusses this bootstrapping approach.
“Vaccine companies also took steps, such as starting large-scale manufacturing during clinical trials and combining clinical trial phases or running them concurrently. Clinical trials gather data on safety and efficacy, with more participants in each successive phase (e.g., phase 3 has more participants than phase 2).”
The Food and Drug Administration permitted this, and the federal government provided massive funding to drive the acceleration of the timeline, socializing some of the financial risk. But the drug development companies did not cut corners. Notwithstanding expert apprehensions in advance, the development companies complied with drug development conventions.
“GAO's analysis of the OWS vaccine candidates' technology readiness levels (TRL)—an indicator of technology maturity— showed that COVID-19 vaccine development under OWS generally followed traditional practices, with some adaptations. FDA issued specific guidance that identified ways that vaccine development may be accelerated during the pandemic. Vaccine companies told GAO that the primary difference from a non-pandemic environment was the compressed timelines. To meet OWS timelines, some vaccine companies relied on data from other vaccines using the same platforms, where available, or conducted certain animal studies at the same time as clinical trials.”
When we were up against it, with hundreds of thousands of deaths playing out and the country locked down, it was not just the public-private partnership marked by tangible collaboration that won the day. The relaxation of bureaucratic constraints permitted industry to unleash its experience and capabilities, untethered by the indefinite scale of the marginal cost of delay.
Yet, when we are faced with a devastating climate change crisis, one we are told will render the planet earth uninhabitable, we are stuck.
Here is Politico on one example of the slow pace of change in the face of what is touted as a mortal emergency.
“Congress at the urging of the Biden administration agreed in 2021 to spend $7.5 billion to build tens of thousands of electric vehicle chargers across the country, aiming to appease anxious drivers while tackling climate change.
“Two years later, the program has yet to install a single charger.”
The culprit is our old friend bureaucracy.
“States and the charger industry blame the delays mostly on the labyrinth of new contracting and performance requirements they have to navigate to receive federal funds. While federal officials have authorized more than $2 billion of the funds to be sent to states, fewer than half of states have even started to take bids from contractors to build the chargers — let alone begin construction.”
To quote another expression, the Administration line is that slow is smooth and smooth is fast.
“Administration officials insist the pace at which they are rolling out the infrastructure law’s charging funds is to be expected, given the difficulty of creating a brand-new program in every state and marshaling the private sector to meet complex reliability and performance requirements for each federally funded station.
“The goal is a reliable and standardized network in every corner of the nation,” said Gabe Klein, executive director of the Joint Office of Energy and Transportation, which leads the federal government’s efforts on EV charging.
““You have to go slow to go fast,” Klein said in an interview. “These are things that take a little bit of time, but boy, when you’re done, it’s going to completely change the game.””
Perhaps this is proof that the public mandate for measures to address climate change is not sufficiently robust.
What is the point of this comparison?
Theory: bureaucracy is a governor mechanism that we can remove when it does not suit our purposes. We can use bureaucracy to slow things down or we can release its massive, pent-up, stored energy in deciding to forbear its application on a one-off, case-by-case basis. This “administrative discretion” is unpredictable and distortionary for anyone trying to make decisions in the context of the rules. Nevertheless, we should anticipate the emergence of elastic enforcement when the perceived political and economic costs of compliance outweigh the best-case benefits significantly.
Corollary: we can judge the urgency of a program’s delivery by the degree of observed administrative flexibility.
The discretionary application of bureaucratic rules (to both lighten the diligence of their application or to increase the intensity of rule enforcement) may happen more often than we may sense. There is a spectrum of intensity. To the extent that administrators seek to push through outcomes, they may reduce their policing of conformity.