Intro to Public Policy Notes Wednesday December 3 2014 Public policy what the government does or does not do about public problems When the government replaces an individual choice with collective choice Tension in public policy Individual liberty versus collective choice Normative statement expresses a value judgement about whether something is Empirical statement expresses a fact about the state of the world desirable Subjective an opinion Uses words like should Not falsi able Objective a statement of fact Often posed as if then Statements Hypotheses falsi able Be careful some are not true Policy science Can we study public policy scienti cally What is science A list of empirical statements A method 1 Theory 2 Hypothesis 3 Empirical test 4 Conclusion 1 Wednesday December 3 2014 5 Revise theory Logic and policy preferences Preferences about policy are usually articulated as normative statements what should shouldn t the government do in situation x A logical argument Connects a normative statement with an empirical statement Reaches a conclusion about preference for a policy Difference in opinion Empirically based What does the science say We can test these Value based Values not universal Multiple values involved Which are important to you Types of values people are often unwilling to compromise on the rst three Individual liberty should care about individual when making decisions Communitarianism should care about community when making decisions Civic duty patriotism do things out if sense for duty or patriotism Effectiveness Ef ciency how well does the policy achieve its goals Equity how bene ts and costs are distributed Feasibility technical and political Limits of policy science We can identify if policies Promote liberty communitarianism or patriotism 2 Achieve ef ciency equity effectiveness or are feasible We cannot identify which of these values should be prioritized Wednesday December 3 2014 You must decide what you value A note about this class Emphasizes empirical statements Respect others values Politics and Markets Ef ciency bene ts to society Net bene ts bene ts costs Bene ts to consumers Costs to producers Scarcity implies the need to ration goods and services There are many ways to do this Goods are ef ciently providing to the extent that they provide the maximum net Put differently there is no way given the current technology that the good can be produced at less cost and still provide the same amount of bene ts to society Market ef ciency Market economics allocate foods through the price mechanism Assertion 1 open and competitive markets ef ciently provide goods and services Competition lowers cost of production and therefore lowed prices for consumers Caveat certain conditions must be met Planned economies Isn t there a lot of waste in market economies Planned economy a committee decided how goods and serviced will be allocated What information does the committee have access to 3 Wednesday December 3 2014 Generally not as ef cient as market economies Equity That goods are allocated according to need or some other criteria Does everyone who needs a salad have a salad Assertion 2 markets are often inequitable Caveat here we re talking about equity in outcomes not in terms of process Instances when free markets produce an inef cient allocation of resources I e We could produce the good or service more cheaply or that provide more Market failure bene ts Examples Monopolies Externalities Information asymmetries Collective action problems Monopoly substitutes No competition Consequences Antitrust laws Also note oligopolies Natural monopolies Regulations Externalities 4 Exists when a single business provides a food for which there are no close A single business can supply a good or service to the entire market at a smaller cost than could two or more businesses Wednesday December 3 2014 The uncompensated impact of one person s actions on the well being of bystander Two types Negative externality external cost one persons actions impose costs on a Positive externality external bene t one persons actions noise bene ts on a bystander bystander Information asymmetry One person in a market transaction has more information than another Win complete information for consumers to make good decisions in their own Not a problem for certain items like food Won t complex items we can understand their purchase We consume them frequently can adjust behavior No big costs if we get it wrong We can make really bad decisions Collective action problems Doing what is in your own self interest is not in the interest if the larger group society Cooperative problems If everyone cooperated we would all be better off but each if he has an incentive to be uncooperative Common pool resources rainforest and ocean sheries and public goods national A situation where it is dif cult to advance new policy or change existing policy Incrementalism policies usually only change gradually incrementally Punctuation rapid changes in policy Most US policy goes in ts and starts defense Policy gridlock 5 Wednesday December 3 2014 Why gridlock Gridlock is by design Federalism Separation of powers Interest groups Legislative branch Separates policy between states and central government Separates policy between legislative executive and judicial branches Legislating means passing laws Bicameral system house and senate Committee system division and specialization of labor Bill law Policy tools in the US Authorization making laws Appropriation funding Oversight Con rmation con rm executive and judicial appointments of the president Senate libuster extended debate requires 60 majority Why legislative gridlock A lot of points where policy can be thwarted Partisanship Regional representation Good for country or good for your constituents Executive executes implements the law Structure Executive 6 Executive of ce of the president direct council OMB national security council council of economic advisors Bureaucracy more autonomy and independence Wednesday December 3 2014 Cabinet and agencies homeland security Independent agencies EPA Policy tools Directly implement and enforce laws Executive order Agency rule making code of federal regulations Veto power over legislation Appoint judges Why executive gridlock Limited in direct policy making by congressional authorization Tension to stretch these powers Bush Obama stimulus spending for 2008 nancial crisis Obama recess appointments to national labor relations board Power
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