The Political Economy of Public Insurance: The Case of Ontario Auto

This paper will examine the “political economy” of public automobile insurance. This will be political economy in its most general sense, the “tradition that investigates the relationship between the economy and politics as they affect the social and cultural life of societies” (Clement and Williams, 1989: 6) In addition, it will be political economy at the “micro” level, leaving aside the bigger questions of the insurance industry in general, Canadian politics, free trade and the Canadian economy. The limited scope of this inquiry will, therefore, bypass some of the most important and interesting aspects of the public auto débâcle – issues of class, power, profit, bureaucracy and the limits of social-democratic governance in an era of recession. The “micro-level” political economy of the story is, compared to these, straightforward. Straightforward or not, it is a necessary preliminary to the wider analysis. The proposed shift to public auto insurance was a small reform, but a worthwhile one and its passing will have the unfortunate effect of pushing into the background the tremendous amount of research and analysis which was part of the policy process laying the groundwork for its implementation. This paper will attempt to preserve this research by highlighting two important aspects of the political economy of public auto – the “tort/no-fault” controversy and the public ownership controversy, and conclude with some comments on the crisis of the most important individual case of this general question, the disgraceful mess of the private health insurance industry in the United States.