Chapter 16 Vocab

Transactions Theory

A theory accounting for the actual cost of outsourcing production of products or services including transaction costs, contracting costs, coordination costs, and search costs. The inclusion of all costs are considered when making a decision and not just the market prices. A theory accounting for the actual cost of outsourcing production of products or services including transaction costs, contracting costs, coordination costs, and search costs. The inclusion of all costs are considered when making a decision and not just the market prices. Essentially this theory illustrates the make versus buy decision for companies. Transaction cost theory tries to explain why companies exist, and why companies expand or source out activities to the external environment. The transaction cost theory supposes that companies try to minimize the costs of exchanging resources with the environment, and that companies try to minimize the bureaucratic costs of exchanges within the company. Companies are therefore weighing the costs of exchanging resources with the environment, against the bureaucratic costs of performing activities in-house.

Trade Association

A trade association, also known as an industry trade group, business association or sector association, is an organization founded and funded by businesses that operate in a specific industry. An industry trade association participates in public relations activities such as advertising, education, political donations, lobbying and publishing, but its focus is collaboration between companies. Associations may offer other services, such as producing conferences, networking or charitable events or offering classes or educational materials. Many associations are non-profit organizations governed by bylaws and directed by officers who are also members. In countries with a social market economy, the role of trade associations is often taken by employers' organizations, which also take a role in social dialogue. One of the primary purposes of trade groups, particularly in the United States and to a similar but lesser extent elsewhere, is to attempt to influence public policy in a direction favorable to the group's members. It can take the form of contributions to the campaigns of political candidates and parties through Political Action Committees (PACs); contributions to "issue" campaigns not tied to a candidate or party; and lobbying legislators to support or oppose particular legislation. In addition, trade groups attempt to influence the activities of regulatory bodies.

Earmark

An earmark is a legislative (especially congressional) provision that directs approved funds to be spent on specific projects, or that directs specific exemptions from taxes or mandated fees. The term "earmark" is used in this sense in several countries, such as the United States and South Africa. Earmarks come in two varieties: Hard earmarks, or "hardmarks", found in legislation, and soft earmarks, or "softmarks", found in the text of congressional committee reports. Hard earmarks are legally binding, whereas soft earmarks are not but are customarily acted upon as if they were. Typically, a legislator seeks to insert earmarks that direct a specified amount of money to a particular organization or project in their home state or district. Congressional earmarks are defined in clause 9(e) of rule XXI of the Rules of the House of Representatives for the 114th Congress as "a provision or report language included primarily at the request of a Member, Delegate, Resident Commissioner, or Senator providing, authorizing or recommending a specific amount of discretionary budget authority, credit authority, or other spending authority for a contract, loan, loan guarantee, grant, loan authority, or other expenditure with or to an entity, or targeted to a specific State, locality or Congressional district, other than through a statutory or administrative formula driven or competitive award process".

Public Interest Groups

An interest group is an organization whose members share common concerns, and try to influence government policies that impact those concerns. Elected officials frequently complain about the influence of "special interests" on American politics. Special Interest Group (SIG) is a community within a larger organization with a shared interest in advancing a specific area of knowledge, learning or technology where members cooperate to affect or to produce solutions within their particular field, and may communicate, meet, and organize conferences. A Special Interest Group (SIG) is a community within a larger organization with a shared interest in advancing a specific area of knowledge, learning or technology where members cooperate to affect or to produce solutions within their particular field, and may communicate, meet, and organize conferences. The term originated on CompuServe, an early online service provider, where SIGs were a section of the service devoted to particular interests.

Civic Virtue

Civic virtue is the cultivation of habits of personal living that are claimed to be important for the success of the community. Civic virtue is also the dedication of citizens to the common welfare of their community even at the cost of their individual interests. The identification of the character traits that constitute civic virtue has been a major concern of political philosophy. The term civility refers to behavior between persons and groups that conforms to a social mode (that is, in accordance with the civil society), as itself being a foundational principle of society and law. Civic virtues have historically taught as a matter of chief concern in nations under republican forms of government, and societies with cities. When final decisions on public matters are made by a monarch, it is the monarch's virtues which influence those decisions. When a broader class of people become the decision-makers, it is then their virtues which characterize the types of decisions made. This form of decision-making is considered superior in determining what best protects the interests of the majority. Aristocratic oligarchies may also develop traditions of public lists of virtues they believe appropriate in the governing class, but these virtues differ significantly from those generally identified under the category of civic virtue, stressing martial courage over commercial honesty. Constitutions became important in defining the public virtue of republics and constitutional monarchies. The earliest forms of constitutional development can be seen in late medieval Germany (see Communalism before 1800) and in the Dutch and English revolts of the 16th and 17th centuries.

Pluralist Theory

Classical pluralism is the view that politics and decision making are located mostly in the framework of government, but that many non-governmental groups use their resources to exert influence. The central question for classical pluralism is how power and influence are distributed in a political process. Groups of individuals try to maximize their interests. Lines of conflict are multiple and shifting as power is a continuous bargaining process between competing groups. There may be inequalities but they tend to be distributed and evened out by the various forms and distributions of resources throughout a population. Any change under this view will be slow and incremental, as groups have different interests and may act as "veto groups" to destroy legislation. The existence of diverse and competing interests is the basis for a democratic equilibrium,[1] and is crucial for the obtaining of goals by individuals. A polyarchy - a situation of open competition for electoral support within a significant part of the adult population − ensures competition of group interests and relative equality. Pluralists stress civil rights, such as freedom of expression and organization, and an electoral system with at least two parties. On the other hand, since the participants in this process constitute only a tiny fraction of the populace, the public acts mainly as bystanders. This is not necessarily undesirable for two reasons: it may be representative of a population content with the political happenings, or political issues require continuous and expert attention, which the average citizen may not have.

Disturbance Theory

Disturbance theory is a political postulation by David Truman that states that interest groups form primarily in opposition to other interest groups so as to counteract influence in their respective political domains.The theory also states that interest groups form and grow in response to threats. Robert Salisbury would later augment the theory to state that interest groups form in the absence or increasing scarcity of resources. Salisbury also argues that the leaders of such groups also hold stewardship over the future viability of the group as an "entrepreneur", in his correlative entrepreneur theory. Disturbance theory is a political postulation by David Truman that states that interest groups form primarily in opposition to other interest groups so as to counteract influence in their respective political domains.The theory also states that interest groups form and grow in response to threats. Robert Salisbury would later augment the theory to state that interest groups form in the absence or increasing scarcity of resources. Salisbury also argues that the leaders of such groups also hold stewardship over the future viability of the group as an "entrepreneur", in his correlative entrepreneur theory.

Economic Interest Group

Economic interest groups are one of the five broad categories of interest groups in the US. These groups advocate for the economic interest and benefits of their members. Economic interest groups are varied and for and given issue there will be large number of competing interest groups. Labor interest groups are a type of economic interest group. Economic interest groups advocate for the economic benefit of their members and constituents. There are a wide variety of types of economic interest groups, including labor groups which advocate on behalf of individual workers and trade organizations. In addition to representing their members, unions also often organize opportunities for direct citizen participation , along with public education and lobbying.Some of the earliest unions in the US were formed by women in the textile industry in cities such as Lowell, Massachusetts. The National Labor Union (NLU) was the first American federation of unions formed in 1866. In these early days, unions lobbied against dangerous work conditions and for regulations around the work conditions of women and children. They also pushed for an eight hour work day and the right to strike.

Population Ecology Theory

Factors impacting the organizational structure of firms have been analyzed often utilizing organizations theory. However, several other theories and perspectives have been proposed as potential alternative means of analyzing organizational structure and functioning. While previous studies regarding organizational structure have utilized such perspectives as adaptation and exchange theory, few studies have utilized population ecology theory, thus leading to the current study. Although population ecology theory is most often used in the biological sciences, many of its principles lend well to organizational analysis. Due to internal structural arrangements and environmental pressures of an organization, the inflexibility of an organization limits the firm's organizational analysis utilizing an adaptation perspective. The challenges and discontinuities associated with utilizing an ecological perspective are identified, including issues related to the primary sources of change (selection and adaptive learning) and related to differentiating between selection and viability. Utilizing competition theory and niche theory, several models for analyzing organizational diversity are incorporated to address factors not encompassed by ecological theory. By compiling elements of several theories, a population ecology model applicable to business related organizational analyses is derived.

Free Rider Problem

In economics, the free rider problem occurs when those who benefit from resources, goods, or services do not pay for them, which results in an under-provision of those goods or services. The free rider problem is the question of how to limit free riding and its negative effects in these situations. The free rider problem may occur when property rights are not clearly defined and imposed. An opposite concept is that of a forced rider. The free rider problem is common among public goods. These are goods that have two characteristics: non-excludability non-paying consumers cannot be prevented from using it and non-rivalry when you consume the good, it does not reduce the amount available to others. The potential for free riding exists when people are asked to voluntarily pay for a public good. Although the term "free rider" was first used in economic theory of public goods, similar concepts have been applied to other contexts, including collective bargaining, antitrust law, psychology and political science. For example, some individuals in a team or community may reduce their contributions or performance if they believe that one or more other members of the group may free ride. In a labor union, free riding occurs if an employee pays no union dues or agency shop fees, but benefits from union representation. One free rides to profit from a stock trade without actually using any of his or her own capital. A common example of a free rider problem is defense spending. No one person can be excluded from being defended by a state's military forces, and thus free riders may refuse or avoid paying for being defended, even though they are still as well guarded as those who contribute to the state's efforts.

Political Action Committee

In the United States, a political action committee (PAC) is a type of organization that pools campaign contributions from members and donates those funds to campaign for or against candidates, ballot initiatives, or legislation. The legal term PAC has been created in pursuit of campaign finance reform in the United States. This term is quite specific to all activities of campaign finance in the United States. Democracies of other countries use different terms for the units of campaign spending or spending on political competition (see political finance). At the U.S. federal level, an organization becomes a PAC when it receives or spends more than $2,600 for the purpose of influencing a federal election, according to the Federal Election Campaign Act. At the state level, an organization becomes a PAC according to the state's election laws.

Collective Good

John Rawls defines the common good as "certain general conditions that are...equally to everyone's advantage." In his Theory of Justice, Rawls argues for a principled reconciliation of liberty and equality, applied to the basic structure of a well-ordered society, which will specify exactly such general conditions. Starting with an artificial device he calls the Original position, Rawls defends two particular principles of justice by arguing that these are the positions reasonable persons would choose were they to choose principles from behind a veil of ignorance. Such a "veil" is one that essentially blinds people to all facts about themselves so they cannot tailor principles to their own advantage. According to Rawls, ignorance of these details about oneself will lead to principles that are fair to all. If an individual does not know how he will end up in his own conceived society, he is likely not going to privilege any one class of people, but rather develop a scheme of justice that treats all fairly. In particular, Rawls claims that those in the Original Position would all adopt a maximin strategy which would maximise the prospects of the least well-off individual or group. In this sense, Rawls's understanding of the common good is intimately tied with the well-being of the least advantaged. Social choice theory studies collective decision rules. Arrow's Impossibility Theorem, an important result in social choice theory, states that no aggregative mechanism of collective choice (restricted to ordinal inputs) can consistently transform individual preferences into a collective preference-ordering, across the universal domain of possible preference profiles, while also satisfying a set of minimal normative criteria of rationality and fairness. According to William Riker, Arrow's Impossibility Theorem "forces us to doubt that the content of 'social welfare' or the 'public interest' can ever be discovered by amalgamating individual value judgments. It even leads us to suspect that no such thing as the 'public interest' exists, aside from the subjective (and hence dubious) claims of self-proclaimed saviors." Thus, Riker defends a "liberal" conception of democracy, which centers on the role of constitutional checks on government.

Interest Groups

Labor interest groups are a type of economic interest group. Economic interest groups advocate for the economic benefit of their members and constituents. There are a wide variety of types of economic interest groups, including labor groups which advocate on behalf of individual workers and trade organizations. In addition to representing their members, unions also often organize opportunities for direct citizen participation , along with public education and lobbying.Some of the earliest unions in the US were formed by women in the textile industry in cities such as Lowell, Massachusetts. The National Labor Union (NLU) was the first American federation of unions formed in 1866. In these early days, unions lobbied against dangerous work conditions and for regulations around the work conditions of women and children. They also pushed for an eight hour work day and the right to strike.

Lobbyist

Lobbying in the United States describes paid activity in which special interests hire professional advocates to argue for specific legislation in decision-making bodies such as the United States Congress. It is a controversial phenomenon, often seen in a negative light by journalists and the American public, and frequently misunderstood. While lobbying is subject to extensive and often complex rules which, if not followed, can lead to penalties including prison, the activity of lobbying has been interpreted by court rulings as free speech and protected by the US Constitution. Since the 1970s, lobbying activity has grown in terms of the numbers of lobbyists and the size of lobbying budgets, and has become the focus of criticism of American governance. Since lobbying rules require extensive disclosure, there is a wealth of data in the public sphere about which entities lobby, how, at whom, and for how much. The current pattern suggests much lobbying is done by corporations, although a wide variety of coalitions representing diverse groups is possible. Lobbying happens at every level of government, including federal, state, county, and even municipal. In Washington, DC, lobbying usually targets congresspersons, although there have been efforts to influence executive agency officials as well as US Supreme Court appointments. It has been the subject of academic inquiry in various fields, including economics, law, and public policy.

Lobbying

Lobbying is the act of attempting to influence decisions made by officials in a government, most often legislators or members of regulatory agencies. Lobbying is done by many types of people, associations and organized groups, including individuals in the private sector, corporations, fellow legislators or government officials, or advocacy groups (interest groups). Lobbyists may be among a legislator's constituencies, meaning a voter or block of voters within his or her electoral district, or not; they may engage in lobbying as a business, or not. Professional lobbyists are people whose business is trying to influence legislation on behalf of a group or individual who hires them. Individuals and nonprofit organizations can also lobby as an act of volunteering or as a small part of their normal job (for instance, a CEO meeting with a representative about a project important to his/her company, or an activist meeting with his/her legislator in an unpaid capacity). Governments often define and regulate organized group lobbying that has become influential.

Patron

Patronage is the support, encouragement, privilege, or financial aid that an organization or individual bestows to another. In the history of art, arts patronage refers to the support that kings, popes and the wealthy have provided to artists such as musicians, painters, and sculptors. It can also refer to the right of bestowing offices or church benefices, the business given to a store by a regular customer, and the guardianship of saints. The word "patron" derives from the Latin: 'patronus' ("patron"), one who gives benefits to his clients. In the United States during the Gilded Age, patronage became a controversial issue. Tammany boss William M. Tweed was an American politician who ran what is considered now to have been one of the most corrupt political machines in the country's history. Tweed and his cronies ruled for a brief time with absolute power over the city and state of New York. At the height of his influence, Tweed was the third-largest landowner in New York City, a director of the Erie Railway, the Tenth National Bank, and the New-York Printing Company, as well as proprietor of the Metropolitan Hotel. At times he was a member of the United States House of Representatives, the New York City Board of Advisors, and the New York State Senate. In 1873, Tweed was convicted for diverting between $40 million and $200 million of public monies.

Social Capital

Social capital is a form of economic and cultural capital in which social networks are central, transactions are marked by reciprocity, trust, and cooperation, and market agents produce goods and services not mainly for themselves, but for a common good. The term generally refers to resources, and the value of these resources, both tangible (public spaces, private property) and intangible ("actors", "human capital", people), the relationships among these resources, and the impact that these relationships have on the resources involved in each relationship, and on larger groups. It is generally seen as a form of capital that produces public goods for a common good. Social capital has been used to explain improved performance of diverse groups, the growth of entrepreneurial firms, superior managerial performance, enhanced. Social capital lends itself to multiple definitions, interpretations, and uses. Thomas Sander defines it as "the collective value of all social networks (who people know), and the inclinations that arise from these networks to do things for each other (norms of reciprocity)." Social capital, in this view, emphasizes "specific benefits that flow from the trust, reciprocity, information, and cooperation associated with social networks". It "creates value for the people who are connected, and for bystanders as well."

Honest Leadership and Open Government Act of 2007

The Honest Leadership and Open Government Act of 2007 is a law of the United States federal government that amended parts of the Lobbying Disclosure Act of 1995. It strengthens public disclosure requirements concerning lobbying activity and funding, places more restrictions on gifts for members of Congress and their staff, and provides for mandatory disclosure of earmarks in expenditure bills. The bill was signed into law by President George W. Bush on September 15, 2007. In April 2014, the Sunlight Foundation opined that the HLOGA of 2007 drove lobbyists underground. In January 2015, a report by the Sunlight Foundation and the Center for Responsive Politics found that of 104 former congressional members and staffers whose "cooling off" period ended during the first session of the 114th Congress which opened January 6, 2015, 29 were already in government relations, "public affairs," or serve as counsel at a firm that lobbies, and 13 of those are even registered as lobbyists.