policy quiz #2

cliff

you earn one more dollar, you lose more benefits than you could have gained

8,000 vs. 8,001 - 8,000 might be the threshold for receiving aid

supply and demand

an aggregate model - doesn't apply to individual behavior

don't fight it

trying to maximize utility - get as much bang for your buck as humanly possible

smallpox v. malaria

smallpox was a disease that affected the developed world, so eradicated it faster

malaria only affected the developing world, so there were no profit incentives

philanthropists had to invest money for anything to be done in regards to treatment

pre-ordered the vaccines and then would drop the price to where the developing countries could afford it

subsidies

a sum of money that is granted to an industry to keep costs low

ex. work, housing, research, education, childcare

taxes

a sum of money demanded from the government to be put towards maintaining the overall wellbeing of the population

ex. pollution (green tax), substance use/abuse (sin tax), import taxes, public transport

positive externalities

by-product of the market that positively affects a third party

negative externalities

by-product of the market that negatively affects a third party

perverse incentives

give someone an incentive to do something bad

rational actors

the personal cost cannot be greater than the personal benefit

the social cost should be less than the social benefit

feedback loops

when one behavior is performed, the subsequent consequences allow that behavior to become more common or less

missing girls

there are around 10 million women missing from the planet - much more costly to have a girl

dowry system, not able to do farm work, etc.

China and India are the worst - will bribe doctors to do illegal ultrasounds to determine the sex of the baby

missing girls policy options

1) banning ultrasounds / abortions - this option will not work, as people will just go right around it

2) reduce costs overall to have girls

give girls economic opportunities

the moral right

is not always the best policy option

have to take into account efficiency and equity

efficiency

CANNOT BE SACRIFICED

when resources are used wisely to produce the most

poverty

defined as relative to the median wage

the median wage rises periodically, so the numbers that define poverty do too - makes the problem unsolvable

Bhutan

mandatory traditional dress in public, people can choose between Western and traditional medicine, limited tourism, etc.

have coercion issues and aren't democratic

large predatory fish

the numbers have dropped considerably over the last 50 years: 90%

industrial fishing - tragedy of the commons

our behavior is modified by the behavior of others

good public policy

aligns all goals!

also has teeth

firms

want to do their business cheaper, faster, better than their competitors

all about maximizing profit

lead poisoning

children are being found with abnormally high levels of lead

mostly in discount brands of spices

people add contaminants - make more money - profit incentive

antibiotic resistance

we are rapidly evolving antibiotic resistance

selective pressure on the microbes

property right

the legal right to exercise control over some resource

can be physical or intellectual

transaction costs

the resources needed for a successful transaction

if the costs are lower, will happen more often

good pub pol can low the stakes and costs

coase theorem

externalities will be corrected by the market with govt interventions if:

1) property rights are clearly defined

2) transaction costs are very low

game theory

study of strategic interactions between individuals

prisoners dilemma

two rational agents who can't make a binding agreement without ending up worse off

dominant strategy

what will produce the best outcome for them - they tend to drift towards that

iterated game

playing the game again and again, allowing the players to build up trust

antitrust laws

can't discuss prices with competitors

arms race

race to create the needed armament

SUV development

a mini arms race

are more popular and safer, but can cause significant damage to those outside of the car

zero-sum games

the payoff is fixed

this is the case most of the time in politicies - there are only finite resources

positive-sum games

the payment can get larger under certain circumstances

negative-sum games

the payoff gets smaller over time

behavior

shaped by those around us - we respond quickly and well to the influence of others on our behavior

bank runs

everyone runs to the bank to withdraw their funds which can totally destroy a bank

negative feedback loop

behavior creates a bad outcome that creates a further behavior that makes the situation worse

positive feedback loop

behavior creates a good outcome that encourages further positive behavior

equilibrium

no real changes - everything is pretty constant

collective-action problems

each individual is rational but the outcome is bad, creating collective irrationality

the tragedy of the commons is the most famous of these

policies to prevent irrationality

- regulate

- use govt to provide the goods

- privatize the resource

- rely on a privileged group

- provide selective incentives

- development informal solutions

common-pool resources

resources that everyone has access to but which one person's consumption reduces the value to others

ostrom's theory

as long as we define these conditions, we're okay

1) who gets what

2) mechanisms for settling arguments

3) duty == benefits

4) monitoring by the users

5) sanctions

6) democratic government'

7) outside forces recognize their rights

social collapse

many societies were highly advanced before the colonizers arrived but they collapsed (Maya, Easter Island, etc.)

factors:

environmental damage, climate change, hostile neighbors, changes w/ trade partners, society's response

best practices steps

1) have realistic expectations

2) classify things as "smart practices"

3) breaking loose from assumptions

4) characterize the practice

pitfalls

finding a causal relationship where there is none and which practices are causing it

new public management

govt should provide high quality services

rewards based on reaching targets

manager #'s up (and have to accept competition)

all resources will be available

target context

where the policy might be implemented at some point

source context

where the policy originated

be careful of pilot programs

mississippi problem

the one jurisdiction that might derail the entire operation

social improvement options

rummage in your brain, have systems be used for multiple functions, develop further, etc.

poverty rate

can calculate the faction of the American population living at or below the poverty line

utility

the best quantifier for social wellbeing

indicators

tools used to quantify and evaluate outcomes or performance

test scores, life expectancy, GDP

indexes

a combination of indicators

ex. the Human Development Index

sensitive to the way they were created but are resilient

veil of ignorance

no one knows what role they have in this new policy so that bias is less prevalent

pareto-efficient

when changing allocation is not able to make anybody better off without making one worse off

deadweight loss

when loss of welfare to one party is greater than the gain by another

oregon health plan

wnated to expand medicaid and established a list of health services from most to least effective

sometimes we have to ration things, only a finite number of resources

utilitarianism

the doctrine that actions are right if they are useful or for the benefit of a majority

equity

an equal division of all resources and responsibilities

horizontal equity

measure of the degree to which similar persons/situations are treated equally

vertical equity

rich pay more than the poor

intergenerational equity

fariness across generations

building equity through a house and social security

initial endowment

have a specific starting point

absolute poverty

degree to which basic needs are met

can be compared over time

relative poverty

level of consumption relative to the rest of soceity

a moving target

peter singer

maximize happiness and minimize suffering

speciesist - animals and humans are basically the same

aka can experiment on babies

primary responsibilities of congress

raise tax revenues and spend them in ways to benefit Americans

earmarks

mechanism by which members of congress insert money into projects

sometimes those projects don't make any sense

logrolling

get their buddies to support a bill so that they can get it earmarked

aggregating preferences

making the beliefs of everyone into 1 public, collective decision

direct democracy

all people vote directly on the issues

referendum

policy questions are put to all votes on a state ballot

representative

elected officials by the people who make decisions for them

electoral college

the winner of the states' popular vote gets all of the state's electoral votes

can win an election just based on electoral college votes and not even win the majority

at-large legislature

all of the representatives are elected by all voters

single-member legislative districts

geography is divided into individual districts that each get one rep

plurality

the person with the most votes wins (regardless of a majority)

arrow's theorem

3+ options being considered, a decision can't be made without violating

1) unrestricted domain - order

2) completeness - a clear winner

3) transivity

4) pareto optimality - individual pref = group pref

5) nondictatorship

6) independence of irrelevant alternatives

presidential system

voters elect legislature and president separately

parliamentary system

a prime minister is elected by the parliament

vote of no confidence

can remove a prime minister

coalition govt

a combo of parties running things

committee markup

fixing and editing a bill

roll-call vote

every member votes yay or nay on a measure

voice vote

the measure has passed or not

gatekeepers

they are usually the committee chairs - can make or break bills

median-voter rule

you go towards the middle and you're likely to get more votes

assumptions: only 2 canditates, single-peaked preferences, just 1 issue, equally informed

organized interests

usually are able to get out ahead - they have a stake in the govt

rent seeking

when political interests use govt power to get economic advantage

economic rent

benefit is not erased by competition

points of entry

where can people get in?

refererendum, executive order, agency rules (left up to them to interpret), the courts

policy analysis

the art of using evidence to persuade

good writing

professional, decisive, compelling and brief

professional writing

involved problem solving

- writing for a client

- giving action items

- knowing that you are only as good as what you can find out

- being honest

opportunity for improvement

1) frame the issue - be specific

2) create explicit goals and define values

3) design for implementation - legal, feasible, likely

4) start from the status quo

5) question theories and evidence

finding the policy answer

1) clarify tradeoffs

2) compare against common criteria

3) compare consequences

4) seek better, not best

straw man

when a writer argues against a claim that nobody actually holds or is universally considered weak

argument structure

pyramid: point on top, details below

lock and key: all points fit together

add strategic supporting details

punch lines!

document and format correctly