Democratic Policymaking - Economic, Environmental, Health, and Immigration Policy

Flashcards covering key vocabulary and concepts from the Democratic Policymaking lecture, specifically focusing on Economic, Environmental, Health, and Immigration Policy.

Economic Growth

An increase in an economy's production of goods and services over time, typically measured as the percentage increase in real GDP.

Low Inflation

A macroeconomic goal where the general price level rises slowly and predictably, usually targeted at 2% to preserve purchasing power.

Full Employment

A condition where all willing and able workers are employed, typically defined as the lowest unemployment rate achievable without causing inflation.

Positive Balance of Trade

A situation where a country's exports exceed its imports, resulting in a trade surplus that supports domestic production.

Classical Model

An economic theory suggesting that free markets are self-correcting and naturally return to full employment without government intervention.

Laissez-faire

An economic philosophy advocating for minimal government intervention, allowing markets to operate freely based on supply and demand.

Gross Domestic Product (GDP)

The total monetary value of all finished goods and services produced within a country's borders during a specific time period.

Keynesianism

An economic theory arguing that aggregate demand drives output and that government spending is necessary to stimulate the economy during recessions.

New Deal

FDR’s domestic programs that used deficit spending and federal agencies to provide relief and recovery during the Great Depression.

Works Progress Administration (WPA)

A major New Deal agency that employed millions for public works projects, including infrastructure and the arts.

Fiscal Policy

The use of government taxing and spending to influence economic activity.

Monetary Policy

The management of the money supply and interest rates by a central bank to achieve goals like low inflation and high employment.

Regulation

Government-established rules that govern the behavior of firms and individuals to address market failures or achieve social goals.

Federal Reserve Board

The governing body of the U.S. central bank that manages monetary policy to stabilize prices and maximize employment.

Progressive Taxation

A tax system where the effective tax rate increases as income rises, placing a higher burden on wealthier individuals.

Flat Tax

A tax system where all earners pay the same percentage of their income regardless of total earnings.

Regressive Taxation

A tax structure where lower-income individuals pay a larger share of their income in taxes than higher-income individuals.

Tax Incidence

The analysis of who ultimately bears the economic burden of a tax, which may differ from the party legally required to pay it.

Price Setting

Government intervention to establish a maximum (ceiling) or minimum (floor) price for a specific good or service.

Entry Restrictions

Government policies or legal requirements that limit the ability of new competitors to enter a particular market.

Barrier to Entry

Any natural or artificial obstacle that makes it difficult for new firms to enter an industry and compete with incumbents.

Supply-side Economics

A theory arguing that economic growth is best stimulated by reducing taxes and regulations on producers to increase the supply of goods.

Trickle-down Economics

A critical term for policies that reduce taxes on the wealthy with the assumption that benefits will eventually reach lower-income groups.

Laffer Curve

A theoretical curve showing the relationship between tax rates and total revenue, suggesting an optimal rate exists to maximize government income.

Tax Deductions

Specific expenses that taxpayers can subtract from their taxable income to reduce their total tax liability.

Tax Expenditures

Revenue losses resulting from special tax provisions like credits or deductions, often viewed as 'spending through the tax code.'

Unemployment

A condition where individuals who are actively seeking work are unable to find employment.

Veil of Ignorance

A thought experiment where principles of justice are designed without knowing one's future social status or personal characteristics.

Income Inequality

The extent to which income is unevenly distributed across individuals or households within a society.

Redistribution

Policies designed to transfer wealth from higher-income to lower-income groups through taxation and social spending.

Cash Transfer

A direct payment of money from the government to individuals, such as Social Security or unemployment benefits.

Social Security

A federal social insurance program providing retirement, disability, and survivors' benefits funded through payroll taxes.

Social Insurance

Government programs that pool risk to protect individuals against hardships like retirement or illness, usually tied to prior contributions.

Means-tested

An eligibility criterion for benefits requiring that an applicant's income or assets fall below a specific threshold.

Block Grant

A fixed sum of federal money given to states with broad discretion on how to spend it within a general program area.

Categorical Grant

Federal funds given to state or local governments for a specific, narrowly defined purpose with strict spending conditions.

Earned Income Tax Credit (EITC)

A refundable federal tax credit for low-to-moderate-income working families that incentivizes work and reduces poverty.

Negative Externalities

Costs imposed on third parties that are not reflected in the market price of a good, leading to overproduction.

Socialize

The practice of spreading the costs or benefits of an activity across society rather than the individual actors responsible.

Inefficient Outcome

A market result where resources are not allocated to their highest-valued use, often due to externalities or price distortions.

Deadweight Loss

The net loss of total economic value resulting from market inefficiencies like taxes, monopolies, or externalities.

Pigouvian Tax

A tax on activities that generate negative externalities, designed to make producers internalize the social costs.

Consumption Tax

A tax levied on goods and services at the point of purchase rather than on income or wealth.

Positive Externalities

Benefits received by third parties not involved in a transaction, often leading to the underproduction of a good.

Subsidies

Government financial assistance provided to encourage the production or consumption of goods with positive externalities.

Output Standards

Regulations that set limits on the quantity of pollution a firm can emit per unit of output or time.

Command and Control

A regulatory approach where the government mandates specific behaviors and enforces them through penalties.

Saliency Trap

A phenomenon where highly visible or emotional issues receive disproportionate political attention while chronic problems are neglected.

Cross-cutting Cleavages

Social divisions that cut across each other, which tends to moderate political conflict and promote compromise.

Satisfice

A decision-making strategy of settling for a solution that is 'good enough' rather than searching for the optimal one.

Policy Window

A brief opportunity for policy change that occurs when a problem, solution, and political will align simultaneously.

Stationary Sources

Fixed locations that emit pollutants, such as factories and power plants, which are subject to specific regulatory permits.

Emissions

Pollutants released into the atmosphere from human activities like industrial processes or combustion.

Point Sources

Identifiable, single locations from which pollutants are discharged, such as a factory pipe.

Effluent

Liquid waste or sewage discharged into a body of water from an industrial or municipal facility.

Non-point Source Pollution

Pollution originating from diffuse sources like agricultural runoff that is difficult to trace to a single point.

Cradle to Grave Approach

A regulatory strategy that tracks and governs hazardous materials from initial production through final disposal.

Principal-agent Theory

A framework analyzing relationships where a principal delegates tasks to an agent who may have different interests or information.

Adverse Selection

A market failure where one party has better information than the other, often leading to high-risk participants dominating the market.

Screening and Selection

Mechanisms used to identify and sort participants based on risk profiles to mitigate the effects of information asymmetry.

Moral Hazard

The tendency to take on more risk when one is insulated from the consequences, often due to insurance or government guarantees.

Ex Post Control Tactics

Accountability mechanisms used to oversee and correct an agent's behavior after an action has been taken.

Ex Ante Control Tactics

Prospective mechanisms designed to shape or constrain an agent's behavior before actions occur.

Goal Displacement

A phenomenon where an organization focuses so heavily on rules or metrics that it loses sight of its original mission.

Technical Uncertainty

Uncertainty arising from incomplete scientific or empirical knowledge about cause- and-effect relationships in policy.

Procedural Uncertainty

Uncertainty regarding the decision-making process, including which actors will be involved and how rules will be applied.

Effectiveness

The degree to which a policy or intervention successfully achieves its intended goals.

Efficiency

The achievement of a desired outcome with the minimum expenditure of resources or the maximization of output for a given input.

Best Management Practices (BMPs)

Practical and effective methods used to reduce pollution when quantitative limits are difficult to apply.

Risk Assessment

The scientific process of identifying hazards and estimating the probability and magnitude of potential harm.

Risk Management

The process of weighing scientific findings against economic and social factors to select actions that control or accept risk.

Monetization

The process of assigning a dollar value to non-market goods like clean air or human life for cost-benefit analysis.

Uncertainty

A state of incomplete or unknown information about current conditions, cause-and-effect, or future outcomes.

Risk

The estimated probability of an adverse event occurring combined with the magnitude of its consequences.

Climate

The long-term patterns and averages of weather conditions in a specific region over decades or centuries.

Climate Change

Long-term shifts in global climate patterns, largely attributed to human activities like burning fossil fuels.

Greenhouse Effect

The natural process where certain atmospheric gases trap heat from the sun to warm the planet's surface.

Greenhouse Gases

Atmospheric gases, such as CO2 and methane, that absorb infrared radiation and contribute to the greenhouse effect.

Lowest Hanging Fruit

A metaphor for the easiest and least expensive policy options available to achieve a specific goal.

Externalities (health context)

Costs or benefits of health decisions that affect third parties, such as herd immunity or disease transmission.

Adverse Selection (health context)

A market failure where high-risk individuals are more likely to buy insurance, driving up costs for everyone.

Moral Hazard (health context)

The tendency of insured individuals to consume more healthcare because they do not bear the full cost.

Risk Profile

An assessment of an individual’s likelihood of needing medical care based on age, health history, and lifestyle.

Risk Pool

A group of individuals whose health risks and premiums are combined to spread the cost of medical care.

Community Rating

A rule requiring insurers to charge the same premium to all individuals in a geographic area regardless of health status.

Patient Protection and Affordable Care Act of 2010 (ACA)

A landmark law that expanded insurance access through mandates, subsidies, and insurance market reforms.

Uncompensated Care

Medical services provided to patients who cannot pay, the costs of which are often absorbed by providers or shifted to others.

Negative Externality (health context)

Costs imposed on society by an individual's health choices, such as the public expense of emergency care for the uninsured.

First Dollar Coverage

An insurance plan where the insurer pays for all covered services from the first dollar, with no out-of-pocket costs for the patient.

Information Asymmetry

A situation where one party, like a doctor or patient, has more information than the insurer, leading to market failures.

Deductible

The amount a policyholder must pay out-of-pocket for healthcare services before their insurance coverage begins.

Co-payment

A fixed, out-of-pocket fee that an insured individual pays at the time of receiving a specific medical service.

Health Maintenance Organization (HMO)

A managed care plan that provides comprehensive services through a specific network of providers and requires referrals.

Path Dependence

The concept that past institutional decisions constrain future policy choices, making fundamental change difficult.

Health Insurance Mandates

Government requirements for individuals to obtain insurance or for employers to provide it to their workers.

Entitlement

A government program guaranteeing benefits to all who meet legal eligibility criteria, regardless of total cost.

Means-tested (health context)

Eligibility criteria based on income and assets, used to target health benefits like Medicaid to low-income populations.

Fee-for-Service

A payment model where providers are paid separately for every service performed, creating an incentive for higher volume.

Capitated Payment Model

A payment model where providers receive a fixed fee per patient, incentivizing efficiency and preventive care.

Preferred Provider Organization (PPO)

An insurance plan offering more flexibility to see out-of-network providers at a higher cost, without requiring referrals.