POLI 365 1nd EditionExam # 1 Study Guide Lectures: 1 - 7Introduction to State/Local Government and FederalismLectures from 1/16, 1/21, and 1/23- Public Goods and Collective Action Problems What is The Tragedy of the Commons and what is it an example of? What makes something a public good? What is a collective action problem? What are the solutions toa collective action problem?One of the key ideas for understanding the need for government is outlined in the Tragedy of the Commons. The Tragedy of the Commons is a parable depicting a group of farmers who are tending to their cattle in a common pasture. They all wonder if they should addanother head of cattle to their individual herds or not. Each individual farmer decides that it would be in their best interest to add an extra head of cattle because they will reap all of the benefits, and the costs would be minimal because it will affect all of the farmers in a very small way. That is if I, as a farmer, decide to add a single head of cattle, I will reap all of the benefits of having another head of cattle, but my one extra head of cattle will not singlehandedly be the cause of overgrazing in the pasture. However, if every farmer abides by this logic, the pasture will become overgrazed, and every farmer will experience those costs. The Tragedy of the Commons is an example of a collective action problem. A collective action problem is where rational, self-interested individuals can produce collectively and individually undesirable outcomes. That is, where there is a discrepancy between individuals’ actions and individuals’ outcomes, there is a collective action problem. In the United States, there is potential for many collective action problems. The main source of collective action problems is public goods. Public goods have the following characteristics:1. Joint-ness of supply (non-rivaled consumption): in order for something to be considereda public good, one person consuming the good does not prevent another person from also consuming the good. 2. Non-excludability: anyone can consume the public good, or it is difficult or impossible toprevent someone from consuming it.Some examples of public goods include air, public safety, national defense, or a firework show. So how can we protect ourselves from undesirable outcomes, such as market failure, when it comes to public goods? There are two distinct solutions to a collective action problem:1. Privatization: when an actor privatizes their goods, the individual’s outcomes are a direct result of the individual’s actions. In other words, he or she is responsible for him or herself only. In the example of the Tragedy of the Commons, if the land was privatized, each farmer would be responsible for only his portion of the pasture, and would therefore make decisions that would affect only his own land. 2. Coercion: when regulations are instated and penalties are imposed for non-compliance. In the example of The Tragedy of the Commons, the farmers could be coerced into paying a fee to let their cattle graze on the common pasture land. If a farmer refused to pay the fee, his right to graze on the pasture could be revoked. The key to coercion is that an individual’s incentive structure must be changed in order for coercion to be effective. For example, if the penalty for not paying the grazing fee is not steep enough, the farmers might choose to not pay the fee and simply pay off the penalty. - Levels of Government and Advantages of State vs. National Control What are the three main types of government? What are the advantages of state control over policy? What are the advantages of federal control over policy?In the world, there are three main types of government:1. Unitary: in a unitary system, power is divided between a central government and smaller subsets of government where the central government holds most of the power and the states have only the power that the federal government gives to them. This is the most common form of government in the world.2. Confederation: in a confederate system, power is divided between a central governmentand smaller subsets of government, where the states hold most of the power and delegate power to the central government as they see fit. In other words, power flows up. The European Union and the United Nations are examples. 3. Federal System: in a federal system, power is divided between a central government andsmaller subsets of government where both the central government and state governments retain sovereignty. That is, they each hold some power that the other cannot take away from them. The United States, Canada, and Australia are examples of nations that have a federal system. When we consider a federal system, we must consider the powers and authorities that both the central and state governments possess over making and enforcing policy. There are some distinct advantages and disadvantages to both state and central government control over policy:- Advantages of State Control over Policyo In proximity, state government offices and officials are closer to the people. Geographically and ideologically, and it is easier to represent the opinions of a smaller and more homogenous population. In other words, it is easier to see and meet the needs of citizens in a town or state then it would be to do so for the entire population of the country. Policy makers will be more able to tailor policies to the needs of citizens It is easier for citizens to contact and communicate with elected officialso State control of policy allows for more experimentation (innovation), that is, it is easier for states to change policy at a local level, and if an experimental policy goes awry, the consequences are limited to the citizens of that state, rather than the entire US population.- Advantages of Federal Control over Policyo State control over policy has low visibility of states: citizens generally have little knowledge about policy at state and local levels, and tend to be more interested and informed about national policy.o State control over policy duplicates efforts: if the federal government already hasa policy, it would be inefficient and costly for the state to have and enforce the same policy. Having an umbrella-like national policy would eliminate duplicate efforts.o State control over policy creates inequality between states: for example, if one state legalizes gay marriage but another state does not recognize that marriage,