POLS 1101 1st Edition Lecture 4Outline of Last LectureI. Coordination vs. Prisoner’s DilemmaII. Another form of Prisoner’s Dilemma – Free Rider ProblemIII. Tragedy of the CommonsIV. Government as a solutionV. Cost of Collective ActionVI. Designing Constitutions for Collective ActionOutline of Current Lecture I. DelegationII. U.S ConstitutionIII. Foundations of GovernanceIV. Dismantling Home RuleV. Setting up GovernmentVI. America’s First Constitution: The Articles of ConfederationCurrent LectureI. Delegation Is a key way to control or mediate transaction costs involved with solving huge problems in our society and economy We delegate task of politics and policymaking to elected representatives in governmento Principal-Agent Theory: Delegate important tasks to others because you cannot do them yourself Delegation brings agency loss: difference between what you would ideally do and your agent actually does. o Can be great or smallo Hidden action and hidden information here makes it hard for you to monitor what they are doingo Ways to minimize agency losso Screening/Selection: Make sure they will be good agent-researcho Monitoring: This can be difficult. They have expertise you do not, you are busy doing other thingso Punishment: Take the task away from them. This is easier if you know if they are doing a good job-not always the case When citizens aren’t involved with politics it means that they delegate it all tothe politicians. II. U.S. Constitution The Constitution needs the government to address collective action problems; but delegation to government risks agency losseso Huge problems under Articles of Confederationo Framers of the Constitution had 2 goals Create a government strong enough to solve certain collective action problems Somehow minimize agency losses to governmento The Constitution embodies those solutions to both of those problems Imperfect solution – it creates its own problems such as prisoner’s dilemmaIII. Foundations of Governance America was a collection of colonies belonging to Britain Britain’s main interest was a market for goods and supplier of raw materials Legacy of self-government Colonies enjoyed high level of home rule – each colony had its own government o Elected state legislatures (Experienced Politicians)o Legislatures taxed, passed laws, dealt with local issueso Britain appointed governors and judges Limitations of Home Ruleo No experience regulating inter-colony or foreign disagreementsIV. Dismantling Home Rule At the end of the Seven Years’ War Britain brokeo Colonists required to share the burden (taxes)o Britain asserted power to impose taxeso Also began to violate home rule in colonies Stamp Acto Imposed tax on all printed materialso First non-self-imposed tax for the colonieso Organized resistance of ordinary citizenso Boston Tea PartyV. Setting up a Government First Continental Congresso Passed resolutions condemning British taxes and administrative decreeso Was not the most organized o Declaration of American rightso “committees of observation” – this is important in the long run because it helped connect the colonies together and helped them to grow closer Import boycotts  Provided base for statewide conventions when colonial assemblies could not meet Foundation for network of activists/delegates between colonies The Second Continental Congresso War broke out in the spring of 1775 – Lexington and Concordo No legal authority to conduct war, but coordination was required Thomas Paine’s Common Sense was published in 1776o It said “ Only in the creation of an independent republic would the people find contentment In the June of 1776 Richard Henry Lee called for creation of a new nation separate from Britaino Committee to draft resolutiono Thomas Jeffersono Declaration of IndependenceVI. America’s First Constitution: The Articles of Confederation America now an independent nation Second Continental Congress proceeded to create a new government Drafter the nation’s first Constitution – the Articles of Confederation  Confederationo Highly decentralizedo National government had limited authority from the states Created a new, permanent Congress – they were not experienced when it came to government and ruling over the peopleo Each state received one voteo No executive Branch Major laws required the endorsement of 9 of 13 states Amending the Constitution, taxing required unanimous agreement Delegates sought to replicate the home rule they had losto Suspicious of national authority Congress Authorized too Requisition men and money from stateso Borrow money and issue bills of credito Fix uniform standards of weight and measuremento Adjudicate disputes between states upon state petitiono Tax and other fundamental changes: unanimous consent (great idea on paper, not so much in practice) Congress Lacked Authority To:o Compel states to meet military quotas (free riding)o Collect taxes directly from the people (free riding)o Compel states to pay their share of government costs (free riding)o Regulate interstate and foreign commerce (coordination) Led to bad economy, bad trade deals The Confederation at Waro States: responsible for recruiting troops and outfitting them for battleo National Military Command: organize fighting forceo Congress: Coordinator, could borrow money but could not tax, no administrative branch, and they had no enforcement authority Gridlock by Designo Many difficulties during the war Most difficult: Congress labored under a constitution designed to frustrate national actiono No executive branch to enforce laws allowed States just free ride on others (they didn’t pay taxes when they passed laws, didn’t send funds and supplies for troops when needed to) Almost lost the war if it wasn’t for Franceo The Government couldn’t coordinate trade and commerce, bad economy States negotiated trade deals individually with other nations States with their currencies ended up slowing interstate