Public Policy 5 Midterm

Liberalism:

"doctrines pertaining to a free man" individual as ultimate entity of society. - preservation of freedom is protective reason for limiting and decentralizing govt power

large concentrated gain and diffuse pain (when organized interests win)

"winners sing louder than losers scream" -overcomes free rider problem -NRA on gun control -ethanol on farmers because willing to pay a little for insane gain

simon johnson

(The Quiet Coup) - The reason for the US economic crisis in 2008 was because there is an American ideology in which we believe that what is best for Wall Street is what is best for everyone else;Government needs to force banks to acknowledge the problem by nationalizing the financial sector and wiping out failed management and corrupt shareholders -for profit firms have turned Congress into an insurance company --> RENT SEEKING has allowed economic elites to stay on top for too long--> prevents creative destruction -Most Americans agree that economic system unfairly favors powerful interests -economic elites have substantial independent impacts on US government policy (average citizens have no impact)

incentives + case study

- 1. Incentives motivate and explain behavior : human capital - 2. One of the most powerful tools for changing behavior is changing incentives: ex doubling a prison sentence for a certain crime (subsidy, tax) - 3. Rational individuals/firms will seek to avoid any outcome that makes them worse off 4. Policies that fail to anticipate how rational individuals and firms will respond can have serious unintended consequences - Bill and Melinda Gates: changing the incentives of malaria drug production by buying off first round at insane profit per pill so they can then recreate the market in lower income areas

CASE STUDY: Victim's Compensation Fund

- 7 billion to individual's injured on 9/11 o No precedent from other incidents o How should the families be paid? --> because congress said so o 1) economic loss by the attack: forgone lifetime earnings, or economic value of non-market services -- Projected using wage data and estimated rate over time , wage average over country, projected future income. --Idea of economic loss means some people mean more than others o 2) noneconomic loss by the attack à pain and suffering (uniform 250,000) o Were also entitled to a hearing to dispute their compensation if they thought it was unfair

Three electives elected at large but requiring a majority

- A/B/C: uncertain because there would be a runoff between A and C

Three reps elected by district with districts drawn roughly to coincide with population densities for groups

- A: 1 B: 1 C: 1

Case Study: No Child Left Behind

- All schools receiving federal funds administer a state designed standardized test -aggregate scored against third graders from past years -- States get to write own tests to determine proficiency—loophole suggested revisions: make the AYP (Adequate Yearly Progress measure) less of a blunt instrument --> doesn't distinguish progress only outcome -improve teacher effectiveness : formal qualifications don't say anything about teacher quality

Marx vs Libertarianism

- Coercion to redistribute resources across society -Society owns all wealth collectively, govt should ensure equitable redistribution (collapse of Soviet Union because of this) Libertarianism: economic freedom is inextricably linked to political freedom

THE LIST OF FOUR -- sources of disagreement

- Differences in basic values: important to recognize when it stems from value differences and therefore won't go anywhere ; these cannot sway our analysis of data ; institutions to regulate our differences (Roe v Wade) - Disagreements over fact or theory: - Different interests: some groups will oppose a policy change because it compromises their own interests despite benefitting the public (NIMBY) - Disagreements over things that are currently unknowable—questions relating to the counter factual or what may have happened under different circumstances -the counterfactual; future

firms/consumer motivations

- Firms seek to maximize profit, which is a powerful motivator - Individuals aim to maximize their utility --> well-being (economics recognizes that people engage in activities which diminish their own welfare)

parliament vs presidential system

- Parliament: led by a prime minister who is elected by a majority of the members in parliament -President:o voters elect legislature and chief exec separately, which could lead to them being from different parties - Prone to gridlock

positive vs normative analysis

- Positive: statement of fact finding or theory that is devoid of judgement - Normative: introduces an explicit judgement about what should be done ; data, theory AND own values.

takeaways on institutions:

- Quality and nature of an institution will often dictate the quality and nature of the policy outcome - The same set of preferences filtered through different institutions will yield different outcomes. - Different institutions give more or less power to different parties.

Case Study- Copenhagen Consensus

- Ranking social benefits and social costs -->o Cost benefit analysis good for prioritizing government decisions

Debunking group theory

- Rational, self interested individuals will not act to achieve their common or group interests.

Types of entry points

- Referendum: major decisions made by the state's citizens - Executive order (national security directive): opposite of referendum, executive approval without approval of legislative or judiciary - Agency rules: decisions made by executive agencies, often written into policy framework. - The courts: when legislative actors can't get the policy results they desired, often will go to courts

institutional rules

- Rules: institution has rules that govern its operation, often written into a governing document (charter or constitution)

case study: EPA lowering figure on value of life

- They said it was based on a more refined understanding of American's willingness to pay to avoid death. - Critics sad it was to make environmental regulations less attractive (weighing a public policy cost) - As people become wealthier the value should go up and not down (by devaluing the value of statistical life, they are able to estimate things costing too much and therefore not worth pursuing)

value vs fact vs theory

- Value: strongly held belief rooted in faith, life experience or ideology - Fact: objective reality or truth, informed by observation, measurement or calculation - Theory: general principle supported by data or analytics

Bureaucratic Corporatism

- acknowledge that explicitly recognized interest groups and organizations do not merely attempt to influence policy but are already implicated through bureaucratic processes. Push pull system of politics/interests. traditional parties : DNC RNC

Stakeholders: + neg posibility

- affected parties ; policy makers must anticipate they will seek to evade a policy change that imposes a cost on them. -o If weak enforcement --> refuse to comply (rational decision making induced) -evasion can be good: reducing traffic ; negative: motorcyclists moving to inside streets

Case Study: Cotton subsidies in America and their impact on West Africa

- agricultural subsidies to farmers (devastating to cotton farmers overseas) - Subsidies encourage them to produce more, driving price down and then affecting competition by West African farmers and lowering their income. - Eliminating it could significantly increase household income in these countries

At large legislature

- all reps are elected by all eligible voters ; all members of the council represent all citizens in the city -Senate

public policy models + purpose

- as price falls, consumers want more of it ; as price increases suppliers will produce it : intersect where supply provided by firms equals demand by consumers: quantity sold and at what price. - Value of models: strip extraneous detail, theories tested with data, identify places where changes in policy are likely to have the most impact.

mechanisms for overcome information problems:

- branding (quality, durability and safety) ; signaling: (no direct value of action but to signal intangible information) ex: students passing a rigorous exam impressing an employer not bc of any information on exam ; certification: attesting to the quality of a product ; screening elicits private information from another party to the transaction (deductibles from insurance clients)

proportional representatives

- cast ballot for a party rather than an individual ; seats allotted based on electoral performance (ex: large legislative bodies) -> produce an outcome aligned with population make up of groups A : 45 B: 25 C: 30

Representative democracy

- choose reps to make decisions on their behalf

Arms race

- countries who spend increasing amounts on armaments makes themselves worse off in the process : limit spending and use on things more valuable to citizens. "gain strategic advantage by continuing to spend" --> dominant strategy o Same as performance enhancing drugs ex: SUV arms race today

Richard Thaler's work demonstrates why economics is hard

- creates game where two people are given $20 - rational thinking would indicate a maximization of one's payoff : take all 20 - they ended up choosing an even split--> care more about fairness/equality than we'd suppose -people look to institutions for rules regarding behavior -even with option to share, (don't) nor take

jared diamond--why do some societies fail?

- damage inflicted on the environment, climate change, hostile neighbors that can no longer be fought off, changes in friendly trading partners, a society's political economic and social responsibilities to these shifts. (are all responsible for explaining societal collapse) o any social problem can be exacerbated when the government structure is out of touch with or unresponsive to what is happening in the broader society.

Coase Theorm

- externalities will be corrected by the market when: property rights are clearly defined and transactional costs are non-existent. It will be invariant based on which party has the property rights. **whichever company makes more money can force the other one to stop producing. if transactional costs are high parties might not be able to reach a socially efficient outcome. ex: polluting factory next to water bottle plant (result will not matter on who has property right) but rather whoever makes the more productive use and can afford to payoff the other.

Contingent valuation:

- how much they would be willing to pay for some intangible benefit (respondent's answer is contingent upon hypothetical situation presented) - incentives to misrepresent willingness of paying ; if something is undesirable there's incentive to inflate value of compensation they'll be paid ; and don't have to pay what they said they would (willing to say they'll pay more than when it comes down to it)

Institutionalism

- human behavior affected by formal structure and its operating norms. o how institutions are arranged o neo-institutionalism: rules processes and structures are significant but not stagnant. fix the process for better outcomes, gerrymandering

negative externality

- individual or firm engages in an activity that imposes a cost on society that does not have to be paid by the group producing the externality (most of which are environmental : pollution, noise, ) private costs and benefits are different from social o Ex: people who don't finish their antibiotic cycles and unleash it on rest of society through preserving more harmful strains

human capital assumptions

- individuals make decisions about investments in own skills / education

instititution's internal incentives

- institution will be most effective if the internal incentives for employees are structured to reinforce the organization's overall mission. (ex: higher wages)

property rights:

- legal right to exercise control over a resource but not absolute ; patent on intellectual items : undefined and difficult to enforce (neighbor leaf blowing)

Equity (and three types)

- measure of a policy's fairness: uniformity: equal division of resources and responsibilities ; equal isn't always fair though: discern different types o Horizontal equity: measure of the degree to which similar persons and situations are treated equally. i.e. two families earning 50,000 a year and paying the same in taxes. - Vertical equity: measure of the degree to which the rich pay more than the poor ; or the extent to which the poor receive greater social benefits than the wealthy ; difficult to say how much more a rich person should pay than a middle class person o Intergenerational equity: fairness in the way that policies treat different generations. Taxes paid in the present may benefit future generations (ex: social security - social contract between generations)

Efficiency vs Equity Tradeoff

- people shirk their responsibilities when things are equitable o Inequity of efficiency: - markets are extremely efficient at distributing goods --> but only reward individuals with something valuable to sell: capital, labor etc. Inefficiency of Equity: sharing a resource equally weakens the connection between work and reward , thereby diminishing the incentive to achieve greater productivity.

Political Outcome assumptions

- politicians behave in ways that are likely to get them reelected ; citizens vote in ways that advance their own interests

Systems Theory

- politics response to demands and supports arising from the political environment. General: (structural, social etc vs specific being levels of competition etc). o Says little about how decisions are made but just how they are filtered. o Feedback loop: outputs create new inputs and so it goes.

Positive externality

- private activity generates a benefit which spills over to the other members of society (ex: new shopping center which improves a community through property values and other investments in the neighborhood) good public policy can help stimulate positive externalities (subsidizing land for a developer) private actors doing too little of things with broader social benefits --> so government encourages more action flu shot, public art

three reps elected by district with districts having been gerrymandered

- process of drawing electoral boundaries in ways that give a political advantage à group A dominates all the districts A: 3 B: 0 C: 0

Group Theory

- product of group struggle or interest groups. o Power shared broadly among many groups. o Groups in political competition put pressure on the government to make decisions in their favor. o Labor unions etc NRA, nonviolence competing groups, beef and pork

Rational Choice Theory:

- product of policy actors taking rational actions dictated by rational policy decisions. Act in a certain way given the environment they operate in; self-interested. Allowing for predictability in policy making. o Doesn't mean they always act in a rational manner, maximizes the benefits while limiting the cost. o Minimalist government intervention, citizens should be provided a choice of programs and bear the costs. o Emphasis on not limiting personal freedoms. ex: Andrew Yang , Libertarian Rand Paul

Elite Theory

- public policy made only by a minority with political control. o Policy outcomes determined by various subgovernments and revolve around their interests. o Less extreme say it is ruled by experts in their respective fields; staunch supporters say there's a dominant controlling class. Elizabeth Warren, Bernie, Trump

Single-member legislative district

- relevant geography divided into individual districts w/ one representative from each district o Ex: US House of Reps

difficulty in political prediction: (2)

- relevant processes are complex--> understanding is inadequate, conceptions don't account for all variables and are therefore inadequate. -conceptions are implicit an interest group achieves effective access to institutions of government by their position in society (status or prestige), internal characteristics (skills and leadership ), factors related to governmental institutions themselves (branches of govt) different entry points create difficulty of entries

Absolute vs relative well-being

- researchers now recognize envy as playing a role in our well-being and consumption factors (irrational) but prevalent o Absolute poverty: degree to which a person's basic needs are being met. --> poverty line stems from this. o Relative poverty: individual's consumption relative to other members of society --> Moving target; strength and weakness Important measure of how a family is living in the context of society overall

Incrementalism

- slowing down or stepping up existing policy over time. o Irrationality / pluralism leads to difference values too difficult to reconcile, must rely on past policy. Affordable Care Act : existing private insurance, Medicaid expansion to the states budget cut reform: small changes that change people's perspectives

Negative feedback loop

- some incident has a bad outcome which induces behavior that makes the situation even worse - Lowering use of public transit (rational would be to raise prices) but would likely cause even fewer use so they subsidize

Transactional costs (def + 2 ways related to pub pol)

- striking deals for private interests; costs associated - impede or prevent agreements based on decisions made ; or good public policy codes make it cheaper and easier to lower transactional costs

CASE STUDY- Peter Singer

- utilitarianism philosopher ; society should seek to achieve the greatest good by maximizing happiness and minimizing suffering.

Natural experiment

- when random circumstances somehow create something approximating a randomized controlled experiment (ex: Washington police vs terrorism thing) Ex: correlation between education and longevity -· Diagnosing more education wouldn't help these people if they are already predisposed for better health won't do anything correlation does not mean causality ex: how changing the minimum school age affects longevity -difficult to establish a control -natural control were the states who didn't change their laws -§ cannot attribute longevity to extra schooling

institutional enforcement

- will and capacity to enforce its decisions. Ex: international court of justice ruling that a country is violating international law. (authority and legitimacy but no ability to enforce)

3 ought to's by institutions

-Aggregating the preferences of the members who make up the relevant group o Implementing and enforcing communal decisions: o 3. Protecting minorities and dissenting views: Bill of Right protecting freedom of speech ; balance carrying out will of majority and protecting

Byrd Rule

-Bill Clinton attempted to construct health care reforming his first budget reconcilation bill which can't be filibustered. -Byrd rule: stipulated that only legislation germane to the budget should be included on budget reconciliation bill --Prevented the process from being hijacked for other legislative purposes

Hannan-- Short Unhappy Life of Libertarian Paradise

-Colorado Springs budgetting: there's a cost to saving money --> economy bouyant through revenue from sales taxes -relationships matter a lot

why was marijuana illegal in the first place?

-Effects: gateway drug to heroine --but correlation isn't causality (tests can't induce harm onto subjects) -Crime: get tough on crime (Rockefeller / Reagan)

Three Tools for Making Inferences on Social Welfare:

-Efficiency: objective tool for defining a better public policy outcome: more efficient allocation of resources ex: beachfront property going to tourists vs grain manufacturers -Deadweight loss: loss of welfare imposed on one party exceeds the gain in welfare afforded to another party -Equity: measure of a policy's fairness

role institutions play in shaping policy:

-Institutional analysis can help us make sense of the outcomes we observe: govt agencies fail to deliver services that would make citizens better off - Help us create institutions or reform existing institutions in order to get better outcomes - Institutional analysis can help us to act strategically to get the policy outcomes we want

As the World Burns- New Yorker ***ADD WAY MORE

-Obama could have done more, quickly turned to a bill full of organized interests -Lindsey Graham, Joseph Liberman and John Kerry working together for own intrerests to draft climate change legislation -many people joining and inserting own signature on it -deep water drilling was leveraged

committee chairs/processes

-Roll call vote: requires every member to go on record for or against a measure -Voice vote: merely records whether a measure has passed or not

CASE STUDY INSTITUTIONS: UN

-UN described as unrepresentative, excessively bureaucratic and poorly equipped to deal with great global challenges. -legitimate force criteria US, UK China France and Russia all have the veto power -- can veto anything that dilutes their relative power

bounded rationality theory:

-add psychological constraints -explain the complexity of individual behavior and organizational decision making -argues comprehensive rationality fails to focus on process of individual decision making; process as important as outcome. -intended rationality: manner of cognitive /emotional constitutions helps or hinders goals -adaptation: adapts to nature of problem -uncertainty: uncertain of selves and outcomes which plays into decisions -tradeoffs: difficult for individuals to move between ranked choices --> something good enough

Veil of ignorance (made from an original position

-advisory theory on how public policy leaders should make decisions -decision makers have no idea what role they would be assigned in the society they were designing. (optimal decisions regarding social welfare would be made under...) à would therefore pursue the interest of society at large.

revealed preferences

-assigns value to a cost or benefit based on observed behavior (two identical homes in the rockies, one with view's value minus those without it value) · Willingness to protect a statistical life

Kleinman on marajuana

-big wonk: wants everything to move smoother -very against the idea of 'swift and certain': someone could get convicted if they are randomly tested positive

Randomized, controlled experiments

-can't do on human subjects when it is perceived that the treatment would not have a positive outcome, which isn't typical) (usually drugs or dropping out of high school) -easily confounded in humans -randomization generates non-treatment related variables evenly amongst. - Control group is the COUNTERFACTUAL - Ex: prayer treatment :no prayer, pray and tell, pray no tell · Ultimately could not overcome the inability to know how many outsiders were praying for them

examples of grants

-categorical grants: to a certain end (highway funds) -block grants : broad concern, flexible funding : feds to the state (Welfare reform, job training) -mandates: higher level to lower level (can be unfunded but told they ought to do it) or funded (medicaid)

building safety net to protect creative destruction vs using political process to stop creative destruction

-creating other work opportunities vs eliminating a sector -economic benefits of competition are large and are spread over entire society so it isn't felt

3 Tiebout policy proposals:

-developmental: returns greater than costs: (tax less than benefit) primary education, infrastructure -allocative: same benefit, you get what you pay for (trash) -redistributive: (should be done by higher level of govts because less likely to move from state to state to avoid paying) tax can either be less or more than benefit (depends on if you're recipient or donor) : autism, welfare

arguments on why to legalize

-drug contamination : allow for regulation and monitoring -incarceration problem: drug related offenses --racially disparate offenses (unfair problem) tax revenue to be collected, stop spending on enforcement, popularity of medical uses, cut back on gangs or the black market

-contractible quality

-govt can specify exactly what is to be done and then evaluate if private firm is meeting the commitment.

power of organized interests (examples and why)

-groups that care about an issue the most (ex:mohair farmers/bridge to nowhere) are able to get large payments from the government without taxpayers really noticing -ex: ethanol: taxed far less because it puts money in farmers pockets: increases demand for corn (said that it lowers our dependence on foreign oil and is cleaner to burn--> not actually found) the costs are spread over a large group and are therefore felt less than the benefits are felt by a large group. *voting system fails to capture the depth of a vote --> see it in hearings ex: underground parking lot at museum of science: subsidy to build is felt / benefits one group much more than others. (gov't should stay out of projects that don't make economic sense but they don't because of votes attached)

Buzzkill --> class points

-harm: law enforcement -institution: change laws --Fed: controlled substances act 1970: --States: give them control** --Locals:can opt out -mechanism for change: referendum

CASE STUDY- Bipartisan Transformation on Social Policy--Welfare Reform

-originally intended to help single family parents -conservatives fostered a culture of dependency -liberals believed gov't had responsibility to provide safety net for disadvantaged populations -bipartisan analysts argued welfare should offer healthier incentives --> promoted self sufficiency through work and decrease number of children growing up with single parent families -showed that people view success differently

incrementalism detailed... 3 types

-policy change by small steps ANALYSIS: limited to consideration of alt. policies, disjointed incrementalism: looking to other s, -strategic analysis: issues need different angles / perspectives to truly understand / thorough -disjointed incrementalism: ills to be remidied /explores consequences -short cut to scientific analysis

Data (things we don't know)

-price elasticity of demand : if the price goes down will the number of users go up? -how many people are not smoking because of price and would because of the change? -biological effects: can't experiment because its a schedule 1 drug -is it a substitute or complement to marijuana? -harmful to the developing brain law enforcement implication: taxes for something which causes substance misuse?

problems, policies, participants

-problems are not conditions -critical to agenda setting -Politics: political events flow along according to their own dynamics and rules ; -participants: hidden and present (hidden-->community of specialists)

options for affordable housing + policy implications

-public housing (sell at subsidized prices) -rent control (local govts set cap) -subsidies for private developers (tax breaks or subsidies) -zoning laws (easier to build certain structures) -vouchers (supplemental income) *each has very different implications on different stakeholders -will it require individuals to do things they normally don't? -will it forbid them from doing things they normally would?

5 methods for program evaluation

-randomized controlled experiments -natural experiment -nonequivalent control -difference in differences -discontinuity analysis

CASE STUDY: Maximizing Human Potential -- Arab Human Development Report

-regions total factor productivity was severely lacking --> less efficient economy -poor public policy: freedom (lacking democracy and liberty), women's empowerment (lowest participation in govt), knowledge acquistion (high % of GDP spent on education yet just not used well) can be put into bucket of bad public policy (failed to maximize human potential)

MLK Study Class Points:

-role of institutions list of institutions: 1- formal: federal laws, courts : Brown v Board, local voting registrars ; local election officials 2-informal: NAACP, black church, white council: intimidate sympathizers of CRM, KKK: 3-media: tv newspaper on to public opinion 4- LBJ 5-Tactics: nonviolence a

Arrow's theorem

-social welfare function: process of converting the preferences of many individuals into the preferences of the group as a whole -When three or more options are being considered, no social welfare function is capable of generating a group decision from individual preferences without violating one of these basic conditions: ***Different voting processes yield different outcomes without any change in preferences

benefits of public provision vs private provision

-task for which a private firm is hired is clearly observed and measured : quality easily delivered -contractible quality: govt can specify exactly goals and measures if it can't be measured easily, should probably be financed/provisioned by the public -reason to believe firms may try to maximize profit

policy entrepreneurs and four tactics

1- Policy Entrepreneurship and Incrementalism: See how small changes over time could produce similar results as more dramatic change. 2- Policy Entrepreneurship and Policy Streams:§ Implication of new institutionalism is that the efforts to secure major change must be informed by insider sensibilities 3-Policy Entrepreneurs and Punctuated Equilibrium: long periods of stability punctuated by moments of abrupt significant change 4- Policy Entrepreneurs and Advocacy Coalitions: § objective conditions are portrayed in ways that increase the likelihood that they will receive attention desired of decision makers.

Four Mechanisms for Changing Behavior

1- regulation 2- taxes and subsidies 3- public provision of a good or service 4- public financing and private provision of a good or service

institutional actors (govt) 3

1-Congress central institution because of legislative authority (tax, borrow money on credit of US, regulate commerce, declare war etc.) 2-The President and Executive Bureaucracy: Can only approve / disapprove of legislation (cannot amend) ; and must rely on the power to persuade and their legislative partners --Ability to control executive bureaucracy is critical for development and maintenance of presidential power: "modern officialdom" 3-The Courts: · Appellate courts are often ignored as significant policy influencers o Not universally appreciated o Judicial activism infringes on democratic policy institutions

4 categories of policy research:

1-substantive area research: case studies 2-evaluation and impact studies other areas 3-policy process (factors affecting formulation) -most fruitful 4-policy design

Non-institutional actors (4)

1-· Media: define social reality so are inevitably influencing policy outcomes. --By paring down the scope of information they confront and thinking schematically, allows individuals to put their own thoughts on the news 2-· Parties: seek to get own members elected to policy making positions. --seek to influence a wide spectrum of policy issues o The dominant party determines the direction policy will take 3-Interest groups: facilitate collective communication --o Interests of economic elites cohere in key policy areas --o Strength of an issue's representation is not tied to the interest's salience 4-· Political Consultants: political expertise that is purchased

Attributes of Effective Institutions

1. Authority 2. Legitimacy 3. Mission 4. Budget, Personnel, and Expertise 5. Internal Incentives 6. Rules

Budget, personnel and expertise

: adequate resource distribution, the personnel and control over the resources.

Compensating differential

: isolate risk premium that must be paid to induce workers to take jobs that involve a greater risk of death.

Measuring Social Welfare + two attempts to

: utility is a theoretical concept rather than something that can be quantified and measured. Even when ranking activities based on the utility they provide, there is no way to actually justify ; also no way to compare utility across individuals - Policy makers seek ways to quantifiably measure human condition which can be used as a proxy for well-being Indicators: ex: poverty thresholds give an objective criterion for participating in govt programs or receiving benefits. Ex: test scores don't measure knowledge or quality of education - Typically use life expectancy and GDP Indexes: combination of indicators ex: HDI : life expectancy at birth, adult literacy rate, enrollment in schools and GDP but difficult to say how things should be weighted à values would likely change but the ranking likely wouldn't outlier: Bhutan with GNH: gross national happiness index: (sustainable and equitable socioeconomic development measure)

closed primary

A primary in which only registered members of a particular political party can vote "tail wags the dog"--> extremes to have a say (powerful/loud)

vote of no confidence

A process in a parliamentary system where a majority of parliament members vote to remove the Prime Minister from office.

Federalist Paper #15

Insufficiency of the Present Confederation to Preserve the Union (Hamilton) -Attacks supporters of Articles of Confederation, saying that its impossible to augment federal powers without diminishing the power of the states. -Hamilton thinks that the Articles would create multiple sovereigns which would make national laws mere suggestions

parliamentary entry hurdle

Israel and Italy too low: Turkey: too high of entry hurdle --> disenfranchisement of the kurds

Philosophy/Policy intersect theories: 4 people and ideal regarding principles

Locke: government exists to protect right of individual Mill / Bentham: govt exists to protect right to exercise liberty Smith: working of invisible hand promotes social interess than centrally directed economic choices Friedman: allow indivdiuals in them market choose what the economy produces ; deregulation -unsupported govt action as a threat to freedom Barry: role of govt to advance common shared interests ideal regarding principles--> American Dream that they can get ahead through hard work equality of opportunity preferred to equality of condition (school system

Buzzkill - Radden Keefe : MARIJUANA DEBATE

Mark Kleiman (wonk): argued for liberalization of marajuana -legislation left very vague on who is entitled to sell/buy -Department of Justice will not intervene on state manners -enough of a policy wonk that he was willing to oppose legalization in instances where he felt that the tradeoffs were larger than the benefits ---based on fact that consumption could increase by 3x -->need to balance individual liberty and self control -Under I-502 cannot be vertically integrated (antitrust)-> growers and processors must remain separate from sellers -unspoken (???) premise that legalization will promote more Americans to use marijuana comparison to alcohol --> HOW WHY LOOK AT CLASS NOTES https://www.newyorker.com/magazine/2013/11/18/buzzkill

authority without legitimacy

North Korea : dictators ; you can bestow legitimacy by acknowleding it (Trump meeting with Kim Jong Un)

common pool resources

Ostrom-- - when more than one individual has access but where one persons' consumption reduces the potential value to others: fish stocks, pastures or water. -Claims users develop sophisticated mechanisms for decision making and rule enforcement to handle conflict of interests if certain conditions aren't met can fail: : clear rules should define entitlement, mechanism for dispute solving, duty should stand in proportion to benefits, monitoring should be carried out by users and/ or party accountable, sanctions graduated

legitimacy without authority

Paris Climate Accord, UN - stateless nations :persecuted minorities

tension between public policy and technology

Progress breeds new challenges: where scientific (ex: human genome) and technological advances usually make some aspects of life easier, public policy is often made harder.

the policy stream

Refers to what might be done about the problem-that is, the possible alternative policies (feasibility, congruence with community values, and anticipation of future constraints) -the probability of an item rising on a decision agenda is dramatically increased if all three issues are linked in a single package.

CASE STUDY: Institutions

Sarbanes oxley Act: protect investors from fraudulent accounting and whistleblowers -OSHA didn't have the means to control because of lack of expertise

- Intensity of preference as driving outcomes more than numbers

Small organized interests have an advantage in terms of winning benefits from the political system -any voter's intensity of preference on a given issue rises with the size of the benefit he may receive - farmers seeking subsidy on fertilizer (1% of population) will likely succeed for way costs and benefits are spread across population ; vs car consumers want a subsidy on gas because (total subsidy is 80x more costly, because they are all taxpayers their net benefit from subsidy is only 200 because they are paying 800 in new taxes), cost of fuel subsidy for non car owners is 800 compared to 10 for the farmers

8 steps in public policy making

Step 1: identify the potential benefit --can suffer from the get go if it has vague/conflicting goals, illegal ; how success is measured; slices vs loaf Step 2: why market isn't delivering desirable outcome (market has ability to be self-correcting at times, is an intervention necessary?) Step 3: Identify the Institutions with the Authority and Capacity to Implement a Policy Change: Step 4: Evaluate Policy Options: Cost benefit analysis Step 5: Assess Political Landscape Step 6: Make a Policy Decision Step 7: Build a Coalition: build groups around organized interests and defeat the opposing organized interests. o Step 8: Monitor enforce fix expand: mechanism for tracking success

Federalist Paper #1:

The American Public was invited to deliberate on the US Constitution.

Federalist Paper #10:

The Federalist Paper by James Madison warning against faction such as interest groups and political parties o Public good is disregarded in the conflicts of rival parties and decisions are often made by the majority superior voice. o common and durable source of factions has been the various and unequal distribution of property

dynamic behavior + 3 types and main example

Thomas Schelling : activity of small group changes incentives of those around them ex: bank run: customers fear solvency of bank and demand all of money at one time, incentivizing those around them to do the same--> Federal Deposit Insurance

coalition government

When two or more parties join together to form a majority in a national legislature. This form of government is quite common in the multiparty systems of Europe. (often when they can't achieve a majority)

difference in differences

a method for identifying causality by looking at the way in which the average change over time in the outcome variable is compared to the average change in a control group 1: examine before and after data (unemployment figure after job training program) 2: compare data with the unemployment figures of the same time period for a similar county that didn't implement program Assumptions: two groups are comparable -> differences in outcomes MUST be attributed to program itself - Location must be similar too (similar assets and attributes) ex: job training program

Anti-Federalist Papers

a series of essays written to counter and defeat the proposed U.S. Constitution --> critics of a strong central govt - Rulers have the propensity to use power for private purposes ; bounds should be set to restrain private injuries

Sensitivity Analysis

a special case of what-if analysis, is the study of the impact on other variables when one variable is changed repeatedly ex: cost of energy weighed against other costs when trying contemplating installation of solar panels

partisan mutual adjustment

a strategy of bargaining in which those involved in a decision (partisans) bargain out their differences (mutual adjustment) -influenced by a broad range of participants and interests -mutual adjustments achieves coordination superior objection: fraudulent, participants aren't influential as they battle so many others , many can veto sometimes seen as an alternative to analysis

nonequivalent control

a study in which the subjects in the control group are thought to be largely similar to the subjects in the treatment group but the assignment is not random ex: does going to harvard make you better off? -nonrandomized treatment and control -Treatment : those who are accepted into elite institutions and attend ; Nonequivalent Control: who opted elsewhere

Pigovian tax

a tax enacted to correct the effects of a negative externality raise the private cost of some activity to equal the social cost

3 main types of institutions (benefits and tradeoffs associated)

a. For profit firms: operate to earn a profit for their owners (public vs. private) ; many cases where turning authority over to private section has a public benefits ex: deregulation ; however they do not voluntarily undertake major activities to lose money -ex: Airline Deregulation Act of 1978: airlines freedom to set fares therefore creating competition BENEFITS: market channels, takes cost out of things, efficient, delivering wants TRADEOFFS: b. Non-profit firms are not operated for purpose of earning a profit. Excess revenue goes back to organization not owners ; exempt from state and federal taxes so they are not allowed to influence legislation. BENEFITS: weaker incentives to profit, voluntary, solve social problems TRADEOFFS: little oversight, can't influence policy, no money often leads to lack of coordination, c. Government - power to compel individuals to do things they might otherwise choose not to. (Something non-profit and for-profit firms cannot do). Ex: raising money for aid through taxation vs. the decision to/not to donate to the Red Cross BENEFITS: coordinated action, coercion, democratic, expertise TRADEOFFS: taxes, corruption

substance I drug

abuse, addiction, no market value

initial cost

additional users can benefit at almost no cost: lighthouse, research on medicine, fireworks (no effective way to exclude additional users) -if initial cost is high, hard to create a voluntary agreement

Ceteris Paribus

all other things held constant helps researchers focus on the changes that are going to have the most impact

Policy creation considerations by Kleinman + results

all questions we must answer: -who's allowed to grow? -how much money? --must be less money than the black market ; but if its too low you can't tax -medical marijuana dispensaries (might take them out of business) -the feds: you can't put money from marijuana purchases in the bank; cc won't pay for it -where will stores be placed? zoning, towns? -second hand smoke 650,000 fewer hours of law enforcement = 15 billion more stoned hours

counterfactual

an educated guess as to what would have happened had a policy or an event not occurred -no way to know --> creates need for experiments

authority vs legitimacy

authority: the power to make you do what they want ex: Dartmouth : via suspension or expulsion has authority (vested with control to get desired outcome) elections, regimes legitimacy: do you deserve the authority you have; reflection of the preferences of people rules over

deviant rationality + types

behavioral economics shows areas where we stray from rational decision making -revenge: gives us satisfaction even when it doesn't make us materially better off -assessing risk: deciding to drive instead of fly after 9/11 : doesn't maximize utility -planning for retirement: setting too little aside, making poor investments conservative or risky and on emotion

averting behavior

behavioral responses that minimize or eliminate the harm associated with some adverse outcome --hard with unemployed workers because what they are giving up is leisure time monetizing: means of attaching market price on averting behavior

Grassroots campaign

best for a referendum in which a network of volunteers and paid staff target undecided votes

This American Life Podcast--What Kind of Country

budget crisis--> cutting money to police forces -people having doubt that the government would actually do right thing with taxes -staunch belief that raising taxes would be a societal ill -Grover Norquist: pledge to rest of constituents to never raise taxes -reduce size of government -turning off street lights to save costs on electricity in Colorado Springs --> commodity -Steve Bardlen: Broodmore Hotel owned in Colorado Springs--> manifesto--> noticed biggest difference was how much the city spends on employees (70% payroll in city vs hotel) -citizens don't care if privatizing saves money as long as gov't is doing less community and private market should have different incentives: ex: private prisons shouldn't incentivize return

tragedy of the commons + example

cases in which members of a group are unable/unwilling to organize themselves in a way that would benefit them in the long run any voluntary agreement to protect a shared resource will not work in the absence of monitoring / enforcement (Ex: fishermen quota : common pool resource - numerous users sharing a common resource make it difficult to maximize long term yield--> rational decision making entices self-interest

DDT case study

ddt is most effective way to curb malaria ; however this takes extensive cost and benefit analysis with assigning monetary values to things which can't really be quantified

Martin Luther King and the Struggle for Black Voting Rights: BIG SUMMARY

decision as to whether or not to cross the bridge : Selma Alabama - SCLC: South Christian Leadership Council: mission to overturn state laws and customs regarding segregation - Constantly fighting self-interests at different levels: injunctions against marches and movements, as well as representatives who seem to come on board when it best serves them (raises the majority vs minority dynamic) -begins with the Reconstruction Act which allowed for no color restriction on who could vote -Enforcement Acts banned klan activity -met with Southern Democrats who transferred power to governor to supervise elections--> fraud and black disenfranchisement (poll taxes, literary tests, white primaries from Democrats (direct democracy movement); convict leasing petty arrests. -grandfather clauses: exempted rural whites essentially because they descended from someone who could vote before date Jim Crow--> separate but equal Plessy v Fergeuson : Great Migration post WWII 1940's political parties realize their own self-interest in appealing to the black vote: support of CR--> produced the NAACP: lead charge on Brown vs Board Montgomery Bus Boycotts were entry point for King (Montgomery Improvement Association) : articulate (nonviolence) --> blacks into activists ; pushback from White Citizens Councils --> year long boycott of bus transit system (spiritual rhetoric) -SCLC: southern christian leadership conference -Student Nonviolent Coordinating Committee -Nixon vs JFK - jfk did more to help king personally -media coverage of the boycott -tatcic: boycotts of buses leading to filling the jails intransigence of birmingham whites was embodied by bull connor : moral corruption he closed parks etc hadn't achievied parity in voting rights so : grassroots empowerment ; Freedom Ballots : nominated integrated ticket so disenfranchised could vote -voter interest groups launching various things (Dallas County Voter's League) -Johnson asked for him not to, out of fear of white backlash

CASE STUDY: Understanding Fertility

decision to not have children coupled with increases in fertility rates--> worries around pay as you go programs: (paid by current tax programs) -having children in developed countries has many more costs associated: investments and opportunity costs for women -private decision, but costs weigh on society at large: low levels of income: women have highest fertility, it's at a minimum for medium income because what's lost weighs more.

decriminalization vs legalization

decriminalization is treated like a speeding ticket: court illegal but not really enfoced referred to treatment -state executing right vs feds legalization: process by which something made into law : referendum

economic cost or benefit :

direct monetary loss or gain

Earmark

directs federal money to a specific project in a member's district and is insulated from any formal review as to whether or not it makes sense (ex: bridges in Alaska that appealed to some voters but essentially were pointless)

social discount rate

discount rate used for public policy initiatives based on the social opportunity cost of funds

Moneyball

dispelling stereotypes, focusing on data and statistics

rules of congress

draft bills--> committees organized around policy areas generally proportional to percent the party holds in the house --> Do most of the writing and revising legislation: committee markup or marking up a bill à then the proposed legislation is reported to the House along with a committee report (purpose and cost,

Direct democracy + primary example

enables all actors with a voice in the decision making process to vote directly on whatever matter is being considered - "by referendum": major policy questions put directly to all voters on a statewide ballot - Unwieldly, expensive and time consuming

where is the money in marijuana?

everywhere but producers -advertising : value added -by taxing them in one state and not other, create possibility for them to be bought in bulk and sold in other states

concentrated pain, diffuse larger gain

ex: manufacturing jobs, coal miners eminent domain--> infrastructure houses near airports NIMBY!! : needle exchange near house -foreign trade: aggregating benefit extremely high : costs concentrated and visible (Indiana) ANTITRUST in college admissions and in general: not allowed to price fix (1991) (students are the larger gain schools are the losers)

how economic actors can benefit from regulation

ex: teachers union advocating for higher certification standards because it can reduce competition so they are paid more ; when certification actually has little bearing on student success (size and budget predicts licensure--> organized interests) -licensure: small groups can use political process to

Bolsa Familia

family grant in Brazil for expanded poverty aid -providing a minimum income level for the extreme poor--> hoping to break generational cycle of poverty -grants range in size and are conditional--(vaccinated and education to be eligible)

Public Financing and Private Provision of a Good or Service:

govt can finance the provision while leaving the private sector to produce it ex: lighthouse -- no incentive by the market to produce it, but govt needs to pay for it. Taxes for a private firm to produce the good

Why is it easier to go to the moon than solve homelessness?

hard to model human behavior -checking a box vs picking apart many factors attached to other systematic problems ; competition drove interests

Distributional effects

having a different impact on different groups. Ex: gas tax, higher burden on low income families

Prisoners dilemma + dominant strategy + iterated game (example)

how two rational agents each trying to maximize own utility but unable to make a binding agreement behave in ways that make of them worse off. -Each prisoner making decision based in part on what he expects the other prisoners to do. If they share more they each get same (20 years), if one does and the other doesn't (3 vs 30) and if they both don't (5 each) -dominant strategy: maximizing own utility based on what other player does: confess always -incentives to double cross -if they were to play the game over and over to experiment with best behavior ex: airlines if they were to not engage in price wars

perverse incentives

incentives which cause rational individuals to behave differently than consistent with policy -respond in ways that cause harm Ex: Mexico City putting caps on driving days, people buying two cars with different numbered license plates.

Deadweight Loss:

inefficiency occurs when the loss of welfare imposed on one party exceeds the gain in welfare afforded to another party; a more efficient allocation of resources could make at least one person better off without making anyone worse off. (Pareto-inefficient) ex: Minimum wage--when the minimum wage is too high, it creates a deadweight loss because firms are sometimes unwilling to hire people when it eats into their own profits.

why money now is better than in the future

inflation ; rental rate of capital / investing ; no guarentee you're still alive ; immediate satisfaction

intergenerational equity

intertemporal decisions because the costs and benefits occur at different times fairness of how costs and benefits are distributed across generations rational individuals increasingly motivated by pleasure and not future planning (environment issues or exercising etc)

treatment

isolating the effect of a single factor to then determine how to attack it

4 main challenges to public policy-- (4 main of long list)

make sure these align with wheelan's list 1- differences of opinion on what is better especially with regard to public policy (often comes at the expense of another groups well being) 2- disagreements over basic values (social issues) 3- tradeoffs among basic values: upholding one often means sacrificing another and visa versa. (current antiterrorism efforts) 4-Side effects and organized interests: often imposed on parties who do not enjoy the benefits and visa versa (I: losers are likely to be more politically motivated and organized than the potential winters --> responds to the intensity of preferences not numbers)

when people aren't mobile...

mechanisms for decision making drive incentives, which are picked before outcome often.

collective rationality

members of a group challenge one another to justify their reasoning helps overcome collective irrationality

Non-democratic safeguards

nations not governed by the will of the majority: delicate balance of honoring wishes of majority and respecting rights of minority societies create nondemocratic institutions to protect individuals or minorities from the majority

Moneyball for State regulators

need for state and local governments to discipline regulatory process for occupational licensure -protects against influence of interest groups --> should go to the state CBO: has gained reputation for impartiality--> need to adopt a maximalist cost and benefit analysis

crisis looms in antibiotics as drug makers go bankrupt

no way to make money after developing the drug (not used for a long period) -proposing reimbursements for new antibiotics

filibuster + example

non-democratic safeguard rule within the Senate that allows 41 of 100 senators to thwart Senate business post-war Iraq-- sunni muslims afraid shiite majority will abuse power (requires majority to agree to constraints and minority to believe they will be protected by them)

Tiebout:

non-political ways to deal with free rider problem in govt -local govts that offer an array of public goods , people can choose the town they want to live in you will move to where best suits you

Case study: India manufacturing market

o Economic Growth in India --> poor infrastructure (not enough investment by the government) coupled with too much regulation on economy-- particularly manufacturing sectors Industrial Disputes Act-- if you have more than 100 workers you have to have gov't permission before laying people off gov't inefficiency needing to be changed

Public Provision of a Good or Service

o Government can avoid free rider problem by providing a good or service and then requiring taxation on it. -privatization: devolving some function of the govt to the private sector (banks/electricity) --but govt monitored?

Pareto efficient vs pareto inefficient

o Pareto-efficient: allocation of resources when its not possible to make any individual better off without making another one worse off -o Pareto inefficient: when it's possible to make one or more persons better off without making anyone worse off

Why can't government operate like a business?

o Public institutions are often assigned a particular responsibility when a profit maximizing firm doing the same thing would create incentives leading to social harm ex: DMV, some people should leave angry/upset Public institutions are often given the responsibility of making individuals firms and even nations do things that they would otherwise choose to not do

making decisions associated with cost-benefit analysis

o Social benefits exceed social costs ; net present value greater than 0, should be adopted - The highest NPV shouldn't always be chosen, as they must account for hypotheticals ; protecting against unlikely yet damaging outcomes - Distributional effects: how costs and benefits are spread across society (low income citizens etc)

Use value vs non-use value

o Use value: derives from ways it can be used directly - recreation or commercial o Non-use value: intangible ; value associated not with direct use

determining worth cost benefit analysis

o Willingness to pay (WTP): most accurate measure of a good is what people are willing to give up for it. (tangible and intangible items—view on a house) o Willingness to accept (WTA): voluntary compensation to endure harm ; forest managers (wealth effect and endowment effect—those with prize something higher than those without) -a person's wage is a typical mechanism for

wonks vs hacks

o Wonks: deep understanding of policy issues, want an elegant solution (academics) marajuana guy o Hacks: relish winning in the political process without regard for its impact (law makers)

types of games

o Zero Sum: fixed payoff: making one better off comes immediately at the expense of another o Positive sum: pay off that can get larger under some circumstances (if they behave better) - Finding ways to cut costs or to improve product quality (improve labor and management) o Negative sum: payoff smaller as time goes on (competing for shares) - Labor and management during a strike

Gatekeepers:

o individuals whose institutional powers give them disproportionate influence over legislative outcomes (committee chairs)

Cost effectiveness analysis

o ranks policies based on their costs for achieving some defined objective purely evaluates efficiency

Mechanisms to regulate collective action problems: 6-- RUPRPD ((rate umbrellas per red puppy dog ))ooiuoo

o regulate (must be easily monitored and enfored ex: quotas) o Use government to provide the good: (mandatory taxation leaves no room for free riding) shoveling snow etc o Privatize the resource (if only one fisherman owned he would have incentive to maximize the long run value of his resource) o Rely on a privileged group: private incentives are such that they will pay the costs necessarily to support a group activity. (neighborhood watch) o Provide selective incentives: benefits for those who do pay their share o Develop informal solutions: facilitate cooperation in ways that enhance overall welfare

Equilibrium:

o relatively stable outcome even in face of changing behavior. -Most markets: ex: drought for tomatoes causes rise in price, consumers buy less tomatoes so prices fall again.

Law of unintended consequences:

o resulting behavior of stakeholders may detract from the benefits of a policy change Ex: art strip club in Boise (artful performance written into policy language)

Positive feedback loop

o some incident causes a positive outcome which induces additional positive behavior. - Hiring more police so streets stay safe

Policy Window

opportunity presented by circumstances and attitudes to enact a policy into law scarcity and short duration creates magnet for problems and proposals

Plurality

person with most votes wins, regardless of whether that candidate achieves majority or not (45% win awards all three seats in an area) Governor Davis called back for a recall under plurality and through referendum

Rent seeking

political interests use the powers of govt (regulation and taxation) to secure economic advantage. - Govt has power that an entrepreneur doesn't have—to bid away competition to keep profits high -restricting supply will raise market price of a good -typically viewed as a nonproductive use of society's resources because it doesn't result in gains in productivity

sources of strain between public policy and political science

political scientists believe policy scholars have only made modest contributions to developing clear verified theories of policy process (no attn to theoretical assumptions) ; pub pol eventually seeks to influence agenda vs political scientists tend to try and understand vs influence

Median voter theory

politicians can maximize the number of votes they get by adopting positions favored by the median voter BUT depends on strong assumptions... -voters have single peaked preferences--> want something close to median, but if far away from first and second choice unhappy (education spending) -voters care just about one issue ; voters are equally informed and engaged

Informal Institutions

powerful means for controlling behavior unwritten rules for organizing human interaction: waiting in line, saving a chair by putting a jacket on it ; take on much more of a role in societies with weak formal institutions. - Chicago residents claiming their parking spot by placing furniture along the sides.

Table of Goods -- Four Types (+ law)

private: rival, excludable club: excludable non rival common pool: rival non excludable public: non excludable non-rival law of diminishing returns -- more units of labor added marginal cost increases , productivity decreases eventually

public policy (defined broadly)

process by which a society makes and enforces decisions on what behavior is acceptable and what is not. -requires individuals to agree on mechanism for resolving disputes -example in first chapter: snowmobiling in yellowstone: decision is binding on everyone, enforced by institutions, majority cares less than minority

Cost benefit analysis

process by which the benefits of a project are tallied up and compared to its costs **closest thing we will get to putting values on utility

shadow pricing (3 types)

process of assigning an opportunity cost to the resources with no obvious market price -contingent valuation -revealed preferences -hedonic market analysis

American political culture legacy...

property-oriented legacy - Public policy tends to create independent economic actors and demands that any communal need by evaluated in light of individual property rights. -Individualist tendency is so strong, but the social contract theory: society sharing a single set of values, accepting ideological homogeneity o For a truly pluralistic society, necessary to democratize political resources (economic) (erosion of social capital will bleed over to erosion of democratic institutions)

mission

purpose -private: maximize profits and produce high quality goods -public: bottom line helps define mission

Do Gooders and Do Besters-- Economist

putting a price on life, allows govts to compare policies --> ranking system (morality and prosperity inevitably put at odds) -removing foreskin can be a cost-effective way to fight viruses where disease is common (didn't win) family planning womens health and agricultural R&D

social discount rate and what to choose --> consensous

rate used to discount value of social costs and benefits -zero: harm shouldn't be discounted if it will affect future generations (moral considerations --> shouldn't devalue life in the future) -non zero: zero can produce nearly meaningless results and justifies nearly any proposal --> proposal which benefits accrue 1 more dollar over time seen as valuable (if time horizon long enough any project with even a tiny stream of benefits can be justified) -individuals will be richer in the future discount rate should represent some social opportunity cost of capital : should not be invariant to when they occur ex: a cost that doesn't occur for 100 years should be discounted relative to a current expense because it leaves society 100 years to invest the capital before expenses are due.

real vs nominal figures

real: adjusted for inflation nominal: not adjusted for inflation

jonathon klick and alexander tabarrok discovery

recognized capability to perform a natural experiment to see relationship between crime and police officers: on a high terrorism threat day (not related to conventional crime)

case study: TENNESSE PROJECT STAR--

relationship between class size and student achievement: expensive or super valuable based on outcome. -Confounding variables ultimately arose which affected the study : but still only randomized test of smaller classes. Costs a lot.

Regulation or...? (+ and -)

require individuals and firms to act in a specified manner and enforce that requirement with fines, confiscation of property or imprisonment Ex: automobiles having safety features Requires extensive monitoring and reinforcement; costly cumbersome Deregulation: occurs when policy makers decide society would be better off without some regulation that currently exists (airline prices)

rational behavior case study: missing women

social norms against girl children incentivize sex tests -doctors and nurses are the only people who can stop this

tax shelter

some kind of investment or behavior that would not make sense in the absence of tax considerations

sticks vs carrots

sticks: punishments for not acting in a certain way (drinking age is decided by state, but if you don't put it at __ then highway funding cut by 15%) carrots: education reform; race to the top-- No Child Left Behind : by fulfilling certain criteria you were awarded grants

strategies vs goal: MLK

strategies: means to end (Freedom Ballots), black church sermons to motivate informal groups to do things goal: voting rights

Taxes and subsidies

taxes raise and subsidies lower cost on firms - Ex: gas tax raises cost of driving, subsidy of mass transit lowers cost of taking bus or train - Alter incentives by changing nonmonetary costà expedited permitting process

rent seeking

the government's power to lock in an economic advantage in the way that a license keeps competition out, rent seeking keeps prices high

time value of money

the principle that a dollar received today is worth more than a dollar received in the future discerned through present discount value

creative desruction

the process by which old structures are replaced by a new one through competition and capitalism -when politicians seek to protect old economic structures by the loudness of their voice it inhibits creative destruction

present discounted value

the value today of future payments, adjusted for interest accrual

discontinuity analysis

those who barely qualified vs those who barely didn't -typically tests the efficacy of treatments created by rigid lines

Free rider problem

those who enjoy the benefits of group action without contributing to the effort -individual stands to gain much more than the community has to lose with their absence ex: tragedy of the commons: having a powerful incentive to graze additional animals beyond what they should ; gets all benefits of increasing size of herd but only pays a fraction of the cost of the incremental damage done to the commons. "freedom in a commons brings ruin to all" tends to get worse as group gets larger : incentive to free-ride grows because individual's impact; far easier to monitor participation in small groups

Logrolling

trading or withholding behavior to advance own political goals. "pork"

status-quo bias

uncertainty associated with change is sometimes seen as less attractive than the status quo. (the devil we know vs the devil we don't) ; opponents of policy change can create doomsday scenarios to stifle change.

public policy amidst 2 barrier factors... + case study

uncertainty: often required to make decisions with imperfect information, shows how there's inconsistent outcomes (scientific uncertainty, human unpredictability, hidden information) scarcity: ration supply through price regulation ; provision of shared goods and services handled by govt vs market mexico-- peso failing ; whether or not to intervene and save from market failure ; by acting risked failure -- creating moral hazard and allowing mexicans to think they can make similar risks in future

hedonic market analysis

using regression analysis, to isolate value of specific intangible cost or benefit - data set with information for each observation as well as independent valuable that may influence outcome ex: compensating differential *no distributional effects accountedfor

comprehensive rationality choice:

utility maximizations ; decision makers hold stable ranked and ordered preferences , self-interested decisions made -expected utility theory: make decisions under expected value -singularly motivated to maximize own gains preferences + rules= outcomes

opportunity cost

value of your next best option - true cost of an activity is what we must give up in order to do it (next best thing one could do with their money) ; nonmarket--> whatever else you would have done with your time ex: waiting in traffic , but you can take phone calls in car

federalism : definition and disadvantages/advantages

vests different powers at different levels in the united states : wards, local, state, federal, supranational advantages: local preferences, accountability, corruption, satisfy needs/autonomy, access points disadvantages: local corruption, jurisdictional, disparity, externality

instant runoff voting

voters rank candidates by order of preference. If no candidate wins a majority, the candidates with the fewest votes is eliminated and those votes are assigned to the voters' second choice until one candidate attains a majority

uncertainty cost benefit analysis

weighted average of possible outcomes

tactics : MLK--> **HOW IT PLAYED OUT**

what you do: nonviolent marches, language of aspiration nonviolence swayed moderates who motivate LBJ to pass legislation and then empowers laws/courts to reach goal

inelastic demand

when a consumer's demand doesn't change as much as the price changes (steep line)

Collective Action Problem

when each group pursues a rational strategy yet the collective outcome is bad for all the same individuals creating collective irrationality

moral hazard

when individuals or firms protected against a loss act with less caution than they would have otherwise --> bad outcome more likely Ex: once a care is insured for full replacement value, disincentivized to take precautions under insurance

asymmetry of information + types

when one party to a transaction has more information than the other 1- Principal-agent problem: expect actions in one way that aren't fully aligned o A: principal: hires an agent to do some specified task; agent has an incentive to behave differently from interests o B: principal cannot easily monitor agents behavior 2- Adverse selection: use private information to sort themselves into or out of market transaction o Those with the worse health (without insurance company knowledge) will be most inclined to sign up for policies : asymmetrical information o Ex: Yale loan repayment; students have greater information on their income post grad, incentivizing low-earners to sign up --> resulted in them not earning enough to do it

policy entrepreneurs

willing to invest their own resources in hopes of future return -Engagement in relevant policy networks spanning across jurisdictions can significantly increase the likelihood that advocates for policy change will achieve success. -Define problems: Affects how people relate specific problems to their own interests o Build teams--Make use of their personal and professions networks ; recognize importance of developing and working with coalitions to promote policy change

value of statistical life

willingness to pay to avoid a risk that would result in one more death in the population hypothetical construct

The Real Trouble With Silicon Valley--> Where's my flying car

· Author advocating for the private sector to be met with funding from the federal government to redirect focus away from convenience and towards more pressing issues in the world today · The apparent promise of Silicon Valley (world's richest country talent time and capital into the narrow band of human endeavors) · shift and an involvement of the federal government to tax, fund R&D for carbon capturing etc.

CASE STUDY: The Candidate with The Most Votes Loses"—Election of 2000 : Al Gore and George W Bush + hanging chad

· Candidate chosen by most americans doesn't necessarily become President · Not every vote counts equally · Because of the all or nothing nature of the electoral college, emphasizes performance in swing states · Third party candidates can skew an outcome in a way that is inconsistent with voter preferences.