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PUP 3002 Fall 11 study guide exam 1 Market failure Prices decoupled from supply demand supply o e g health care Common pool resource problems Negative externalities Monopolies cartels Non excludability pollution o e g depleted fisheries o pollution o trusts o Non When markets fail govt is used as a mechanism for achieving collective outcomes Societies are market oriented goal is to let market take care of itself Debate comes on what constitutes market failure o Is lack of housing for poor a market failure Public goods Fresh air street lights public parks etc Common pool resources Special form of public good o Fisheries grazing area etc 2 important characteristics o Subtractable or rival o Non excludable Externalities others The decisions and actions of those involved in the market exchange that affect Negative Positive o Third party not compensated for harm loss e g pollution o Third party does not have to pay for a gain e g education Communitarianism An ideology that emphasizes the responsibility of the individual to the community and the social importance of the family unit Liberalism a la Locke Employed the concept of natural rights and the social contract to argue that the rule of law should replace absolutism in government that rulers were subject to the consent of the governed and that private individuals had a fundamental right to life liberty and property Why study policy Increase knowledge of substance and process More informed arguments and analyses o Improve citizens ability to participate and make choices o Improve citizens ability to influence policy decisions Why policy analysis Need for thoughtful and impartial assessment of problems and solutions Avoid shooting from the hip Anticipate policy outcomes Systematic organized way to evaluate exiting programs or potential policy Need for thoughtful and impartial assessment of problems and solutions alternatives Criteria for choosing policies Effectiveness Efficiency Equity Ethics Technical feasibility Political feasibility Institutional capacity Social acceptability Efficiency v equity Efficiency refers to what a policy or policy proposal costs in relation to its expected benefits to society o Economic feasibility affordable Equity refers to the consideration of what constitutes a fair or equitable policy o How a program s costs and benefits are distributed among citizens choice Types of public policy Distributive individual programs or grants that a government provides without regard to limited resources or zero sum situations where on group s gain is another s loss o Ex college research grants weapons procurements agricultural subsidies highways and bridges and other construction projects o Pork barrel term used to describe the attempts of elected officials such as members of Congress to provide government programs and services that directly benefit their constituencies Redistributive policies policies that provide benefits to one category of individuals at the expense of another often reflect ideological or class conflict o Ex welfare Social Security affirmative action tax policy Regulatory policy government restriction of individual choice to keep conduct from transcending acceptable bounds o Covers wide range of government activities from protecting consumers to o Subcategories ensuring environmental quality Competitive regulation mostly associated with regulating specific industries and their practices Ex computer software and communications companies Protective regulation protects the general public from activities that occur in the private sector o Reflects founders concerns of government tyranny o Adds complexity to governing o Adds to challenge of building consensus especially between the legislative Case studies v comparisons Case Studies as Evidence Problem of uniqueness Can t generalize evidence Strength from multiple studies Separation of powers Separation of powers and executive branches Legislative making Executive enforcing o Senate o House o Committees o President o Bureaucracy Executive office Cabinet level Executive agencies Regulatory commissions Judicial interpreting o Supreme court o Appellate courts o District courts Federalism National v state local Evolution o Dual o Cooperative Controversies o Money o Expectations o Devolution o Policy capacity Unitary system of government constitutionally mandated powers A unitary government is one in which there is only one level of government that has o National government which grants powers to its states but it has the ability to o States have no inherent power granted by the constitution take away these powers as it wishes Pluralism Elitism Power is in groups Coalitions form around shared attitudes Groups rise in certain arenas thus there is fluidity and movement Conflict is important but is channeled Power decentralized fluid and situational Power held by those at the top Marxist view that power related to money Rule by the few not the many The military industry and political classes rule Conflict is stifled Satisfying Rational decisions Ranks preferences An approach Sometimes assumes perfect information Sometimes assume profit maximizing Refers to a method not Types of policy analysis Scientific o Objectives Search for truth Builds theory about policy actions and effects May be too theoretical for decision makers o Limitations Professional o Objectives Political Analyze alternatives to solve problems Goal is practical value Too narrow due to time resource constraints o Limitations o Objectives o Limitations Advocates support preferred policies Too ideological partisan Lack analytical depth Factors affecting growth of government Expansion of the United States in physical area and population Business regulation Increasing complexity Protection of social welfare International role o U S as a superpower Growth to keep up with new responsibilities in foreign affairs and Citizen demands national defense Effect of public opinion on public policy Important to democracy Voiced in numerous ways Can have an impact Can lead to interest group formation and activity Is fleeting fewer people getting involved in politics and policy Interest group strategies in policy Direct contact Provide information Organize and mobilize Influence and campaign Money for elections Take legal steps Policy subsystems o Subgovernments o Issue networks o Iron triangles Policy devolution Informal setting where policy is made also known as Devolution the statutory granting of powers from


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FSU PUP 3002 - Market failure

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