Melissa Del Rosario GVPT170 MIDTERM 1 The Logic of Politics Politics the process of agreement while individuals often disagree on the intended goals must decide on how to allocate resource in the face of competing values MANY OPINIONS TO RECONCILE The process in which a group of individuals reach agreement on a course of common good Collective Action The difficulties individuals or groups of individuals come across while trying to agree on a certain goal Coordination o Even with a group agreement and willingness to coordinate How to coordinate efforts with those of others E g rebuilding a house all agree and want to contribute but need to decide how to go about doing it coordination of actions is needed o Problems arise and are caused by Uncertainty Insufficient information implementing the general goal Free Riding o Even if we compromise how do we actually go about approving and o If citizens think their contribution to collective effort is Perceived as small Will not affect success or failure If 149 other people are there to build the house then you don t really need to show up to build But what if everyone thinks this Then no one will be there to build the house o Enjoy collective benefit without individual contribution leads to Failure to provide a collective good o Type of cooperation problem that if people act out of self interest it will undermine the collective good Nothing will get done even though the goal was agreed upon o What if individual willingness to contribute is in doubt Self interest trumps collective effort Ex You have overcome coordination but now people would rather not participate in building they feel like doing something else or would rather do something else Individual outcomes depend on choices of others Coordination is necessary for the best collective outcome Cooperation Tragedy of the Commons 1 Melissa Del Rosario o Collective good can be in danger of being squandered unless group members cooperate to preserve it o The destruction of a collective good E g crab fishing No crabs are left to reproduce if there is over fishing o Too much self interested behavior can destroy a collective goal Solutions to collective action Recurring issue self interest Voluntary cooperation self governing o Reduces cost o But often unrealistic solution Recognize that behavior is bad and change Privatize o Assign ownership or allocate resources Only certain parts is fishable External force or government o Coerce compliance with costs or incentives Rules Monitor compliance Sanction Violations o All solutions require some form of governing body institution o Example taxes but if they don t monitor or do something to enforce it problems will still arise IRS Transaction v Conformity Costs TRADEOFF Transaction Costs increase as the number of participants rises more complex more people to deal with more opinions to take into account higher cost Conformity Costs the difference between individual preference and the collective outcome o Quite often you may not be pleased with the decision o More than anything you dislike decision higher conformity cost Often inversely related o Conformity costs will increase as transaction costs decrease and vice versa costs Dictator v Direct democracy o Dictator will have a higher conformity cost but then rising transaction o Direct democracy will have high transaction costs but you did vote so the majority will be happy with the decision Delegation Smaller number of people that act on behalf of a larger group Assigning decision making authority Easier process of decision making is easier Lowers transaction costs 2 Melissa Del Rosario Principals agents o Examples car mechanics because you are not trained to fix cars insurance agents work for clients on behalf of larger insurance company Does make decision making easier and lowers transaction costs o However may increase conformity costs o You must first enable the government to control the governed and in the next place oblige it to control itself Dangers of Delegation Agent does not act in your best interest o Hidden action o Hidden information Madison s dilemma The Constitution Articles of Confederation 1781 1789 No executive branch Each state had one vote Major laws required 9 13 votes Constitutional amendment required 13 13 o E g direct taxation Problems with Articles Currency War debts economic troubles Public order Shay s Rebellion Bottom Line plagued by free rider problems o Virtually 13 separate governments following the revolutionary war Confederation national government derives limited authority from the states but not the citizens Worried about free riding Power was not centralized enough to make important decisions Constitution Framers had two basic goals 1 Solve a set of collective action problems more centralized authority 2 Minimize the dangers from delegation PLACE LIMITS ON THE delegation GOVERNMENT Compromises were made to craft an appropriate balance of power political Representation by individual states reflecting populations tradeoffs o Large v Small states population modern day house o Northern v Southern States Slavery protecting Compromises on the issue 3 Melissa Del Rosario o Governmental power v people Discerning the right amount centralized authority while still protecting individual freedoms o National v state power How much centralized authority while retaining some power for the state Not willing to completely give up power Virginia Plan FAVORED BY SOUTH Two chamber legislature Representation based on state population Lower chamber of legislature elected by the citizenry upper chamber executive and courts elected by the lower house Legislature can make any law and veto any state legislature Council of revision composed of executive and court can veto legislation but legislature can override by majority vote New Jersey Plan FAVORED BY NORTH Single house chamber equal representation for each state regardless of population Legislature has same power as under articles with added authority to levy taxes and regulate commerce o Can exercise supremacy clause over state legislation Plural executive can be removed by legislature on petition of a majority of states courts appointed by executive Supreme Court appeals in limited number of cases Great Compromise SATISFIES NORTH AND SOUTH Balance of powers Two chamber legislature with lower chamber House of Representatives o Representation based on population Upper chamber Senate representation equal for every state Authority to