POSI 2320 Exam 2 Study Guide: Federal Bureaucracy, Economic Policy, and State Finance

Vocabulary flashcards covering core administrative, economic, taxation, and policy concepts from the POSI 2320 Exam 2 Study Guide.

Legal-rational authority

A concept developed by Max Weber in which authority and bureaucratic legitimacy derive from formal rules, codified laws, and established official procedures rather than tradition or personal charisma.

The Pendleton Act (1883)

A federal law enacted in 1883 that reformed the federal bureaucracy by establishing a merit-based civil service system, replacing the spoils and patronage system with competitive exams.

Agency point of view

The tendency of civil servants and bureaucrats to prioritize the interests, survival, and policy preferences of their specific agency above other priorities.

Hatch Act

A federal statute that restricts executive branch civil service employees from engaging in partisan political activities while on duty to preserve administrative neutrality.

Power of the purse

The constitutional authority of the legislature to allocate, deny, or restrict funding to bureaucratic agencies, serving as a primary channel of accountability.

Mandatory spending vs. discretionary spending

Mandatory spending consists of government expenditures legally required by entitlement programs, whereas discretionary spending is funding that Congress debates and authorizes each year through appropriations.

Bureaucratic discretion

The authority granted to regulatory agencies and bureaucrats to interpret broad statutes and choose specific methods to implement and enforce laws.

Public comment period

A designated timeframe in the regulatory rule-making process that allows the public, interest groups, and businesses to submit feedback on proposed agency regulations.

Chevron doctrine

A legal principle requiring federal courts to defer to a federal agency's reasonable interpretation of ambiguous statutory provisions that Congress empowered the agency to administer.

Loper Bright Enterprises v. Raimondo (2024)

A 2024 Supreme Court decision that overruled the Chevron doctrine, declaring that courts must exercise independent judicial judgment rather than deferring to agency interpretations of ambiguous laws.

Major questions doctrine

A legal standard requiring administrative agencies to identify clear and explicit congressional authority when issuing regulations of vast economic and political significance.

Invisible hand

Adam Smith's concept illustrating how self-interested individual decisions in a competitive free market naturally guide resources to socially beneficial economic outcomes.

Natural monopolies

Market structures where large economies of scale or massive infrastructure requirements make it most cost-effective for a single provider to supply a market, often necessitating government regulation.

Moral hazard

A situation in which an individual, firm, or institution takes on excessive risk because they are insulated from the negative financial consequences of failure.

Externalities

Spillover costs or benefits from an economic activity or transaction that affect uninvolved third parties, such as pollution or environmental degradation.

Protectionism

Government economic policies, such as tariffs, quotas, and subsidies, designed to shield domestic businesses from foreign competition.

Right-to-work laws

State statutes prohibiting union contracts from requiring workers to join a labor union or pay union fees as a requirement for employment.

The free-rider problem

A market failure that happens when individuals consume or benefit from a shared public good without contributing to the cost of its provision.

Demand-side economics (Keynesianism)

An economic theory emphasizing government spending and fiscal intervention during downturns to stimulate aggregate consumer demand and reduce unemployment.

Supply-side economics

An economic theory proposing that lowering taxes and easing regulatory burdens encourage investment, production, and business expansion, expanding aggregate supply.

Budget deficit vs. national debt

A budget deficit is the financial shortfall within a single fiscal year when expenditures exceed revenues, whereas the national debt is the cumulative total of all unpaid past deficits.

Monetary policy

Actions undertaken by a nation's central bank to control the money supply and influence interest rates, including open-market operations and reserve adjustments.

Quantitative easing (QE)

An unconventional monetary policy tool whereby a central bank purchases large amounts of longer-term government securities and financial assets from the open market to inject liquidity.

Public goods

Commodities or services characterized by both nonexcludability and nonrivalry, meaning people cannot be excluded from using them and one person's consumption does not reduce availability.

Rule of capture

A property law doctrine establishing that a landowner who extracts groundwater or oil from beneath their land owns that resource, regardless of whether it was drawn from beneath neighboring property.

Tax capacity vs. tax effort

Tax capacity measures a jurisdiction's potential ability to raise tax revenue based on its wealth and economic base, while tax effort measures the actual extent to which it levies taxes relative to that capacity.

Tax exporting

The practice of shifting a state's tax burden to nonresidents, such as tourists, out-of-state shoppers, or consumers of exported natural resources.

Regressive, progressive, and proportional taxes

Regressive taxes take a greater percentage of income from low-income earners; progressive taxes take a higher percentage as income rises; proportional taxes take the same percentage from all earners.

Dedicated (earmarked) funds

State revenues or tax receipts legally restricted and set aside to fund specific programs or agencies, in contrast to discretionary funds that can be allocated freely.

The Sixteenth Amendment (1913)

A 1913 constitutional amendment giving the United States Congress the power to levy and collect an income tax without apportioning it among the states based on population.

Balanced budget requirement

A constitutional or statutory mandate requiring a state government to ensure its enacted expenditures do not exceed its estimated revenues.

Punctuated equilibrium

A public policy theory stating that policies typically experience long intervals of incremental change and stability that are periodically interrupted by sudden, dramatic policy shifts.

Multiple streams theory

A public policy model postulating that major policy change happens when the problem, policy, and politics streams join together during an open window of opportunity.

Policy feedback theory

A theory suggesting that existing public policies reshape politics over time by creating new political coalitions, defining incentives, and altering governmental capacities.

Trigger laws

Legislation passed by a government that remains dormant and unenforceable until a specified future condition, legal ruling, or external event automatically brings it into effect.