Concepts Public Policy Efforts by the government to get people to do what they normally would not do People are self fed rationally doing things in their best Ethical justifications of public policy interest Imagine an anarchy no government no rules 1 Establish peace and ensure domestic tranquility 2 Provide fir the common defense 3 Promote the general well fare protecting us from ourselves Deontological ethics to do Individual liberty Things we do under public policy because it s the right thing Teleological ethics Communitarianism Care about consequences of the policies rather than the Do the benefits of the policy exceed the cost of the policy Sustainability ethics Efficiency 9 3 13 Concepts Market Failure goods Monopoly Market Failure Any situation where the market doesn t efficiently allocate Public policy helps market efficiency by assigning contracts When only one firm provides the good Textbook definition A monopoly of oligopoly exists when one or several persons or companies dominate the market and can control the price of a product or service Oligopoly when only a few firms provide the good Antitrust law if a monopoly is charging too much for their Natural monopolies when it s only feasible that one company good you can sue them for having too much market power provide a good o Lack of competition o Residential electricity o Residential water supply sewage We need public policy to prevent monopoly power Externality Market Failure When somebody who isn t partied to a transaction is affected by that transaction Textbook definition The decisions and actions of those involved in the market exchange that affect other parties either negatively or positively Negative externality when someone who isn t partied to a transaction is harmed by that transaction Textbook definition occurs when two parties interact in a market and as a result of that interaction a third party is harmed and does not get compensation o Ex pollution Positive externality when someone who isn t partied to a transaction is benefitted by that transaction Textbook definition occurs when two parties interact in a market and as a result of that interaction a third party is gains something from the interaction and does not have to pay for it o We produce too little of these o Ex Lawn care raises neighbor s property value vaccine lowers others chances of obtaining disease if I receive vaccine Information Asymmetry Market Failure When one person has the information but the other person Textbook definition When the information is not fully or Markets tend to be inefficient providers of goods when there does not easily available to the consumer are information asymmetries o Medicine we generally know little about a drug we Collective Action Problems Market Failure intake Exists when what is in my best interest is not the best interest in society as a whole Textbook definition When markets cannot provide for the public good also called the collective good Who will provide the public good It s in society s interest to provide public defense it s not in an individual s interested to provide the public defense The public and private goods are characteristics of what is being provided but not of who provides them Pure Private Good a good that is private and for which there is no market failure Normal day today interactions between the private sector and consumers o Ex DVD players automobiles houses Toll good can be jointly consumed and exclusion is feasible easy to exclude consumption but once you have access the o Ex Cable services one person s use of cable services consumption is joint does not preclude another person s use but a cable company s charges may exclude low income individuals Common pool resources is not feasible to exclude consumption however it is not a joint consumption o Fishery you can t prevent from entering the fishery but every fish you catch is no longer available for me to catch 9 5 13 Concepts Trends in Government Growth Is the government doing more things than it has historically produce GDP gross domestic product product of everything we State and local government spending more than fed in 1910 Separation of powers legislative judicial and executive branches Legislative branch process o in charge of making laws o They fund the implementation of the law appropriation o Oversight o Indirectly affect policy through confirmation process When a new pres takes process he appoints people and legislative branch gets to confirm whether he can appoint them and judicial branch o Bicameral system two different institutions that are in charges of all of the above House of representatives and the senate Committee system subdivisions of house and senate which are also subdivided into sub committees Ex agriculture committee foreign relation Executive branch committee o Implementing executing monitoring and enforcing the o President is head of the executive branch of the laws government o Appoint judges o Cabinet level of industries Agencies Judicial branch o Judicial review if a citizen is harmed by a policy made by executive or legislative they can sue the us government and take them to court and the judiciary can decide whether the rule law is legal Indirect role Federalism Relationship between federal government and state government Federal structure some policies can be made by fed government and some can be made by the state government Cooperative federalism Federal and state government tend to tackle the same sorts of policies and there is a lot of overlap o Both working on policies simultaneously Public becomes involved with policy on all sorts of levels Passively through public opinion as public opinion on an issue start to change political actors start to change and start changing policies in harmony with the public s values o Ex gay marriage Public opinion can be fleeting based upon current events The role of the public Gridlock 9 10 13 Concepts Government consolidation An example of a monocentric political systems o Only 1 policy actor who is decision maker who s making o They can be effective if the policy elected officials can effectively translate citizen the public goods and services are homogeneous urban voters share relatively similar preferences for urban goods and services voters can effectively articulate their preferences for urban goods and services through one electoral mechanism preferences into policy objectives assigned to public bureaus and determine tax rates for producing the
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