Holcombe 02

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CHAPTER

2

Principles for Analyzing

Government

PUBLIC SECTOR ECOO!ICS" The Role of Government in the American Economy

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The Market EconomyThe Market Economy

Process of vol&ntary e'c(angeProcess of vol&ntary e'c(ange

SpecializationSpecialization

Gains from tra#eGains from tra#e

Proses pert&)aran s&)arelaProses pert&)aran s&)arela

SpesialisasiSpesialisasi

!anfaat per#agangan!anfaat per#agangan

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Economic Efficiency and theEconomic Efficiency and the

Competitive MarketCompetitive Market *eman# C&rve*eman# C&rve + val&e of o&tp&t pro#&ce#+ val&e of o&tp&t pro#&ce#

S&pply C&rveS&

pply C&rve + opport&nity cost of pro#&cing o&tp&t+ opport&nity cost of pro#&cing o&tp&t

Intersection of s&pply an# #eman# c&rves #etermine level ofIntersection of s&pply an# #eman# c&rves #etermine level of

o&tp&t ma'imizing val&e of economy,s reso&rceso&tp&t ma'imizing val&e of economy,s reso&rces

-&rva permintaan +nilai o&tp&t yang #ipro#&)si)an-&rva permintaan +nilai o&tp&t yang #ipro#&)si)an

-&rva pena.aran + %iaya pengor%anan #ari pro#&)si o&tp&t-&rva pena.aran + %iaya pengor%anan #ari pro#&)si o&tp&t

Persingg&ngan )&rva pena.aran #an permintaan men&n/&))anPersingg&ngan )&rva pena.aran #an permintaan men&n/&))an

ting)at o&tp&t yang mema)sim&m)an nilai #ari s&m%er #ayating)at o&tp&t yang mema)sim&m)an nilai #ari s&m%er #aya

e)onomie)onomi

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Economic Efficiency and theEconomic Efficiency and the

Competitive MarketCompetitive Market

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Efisiensi perekonomian dan pasarEfisiensi perekonomian dan pasar

persainganpersaingan

-&rva permintaan0 *0 menggam%ar)an nilai o&tp&t yang #i(asil)an-&rva permintaan0 *0 menggam%ar)an nilai o&tp&t yang #i(asil)an

#i pasar0 men&r&t o&tp&t )ons&men0 )arena )&rva terse%&t#i pasar0 men&r&t o&tp&t )ons&men0 )arena )&rva terse%&t

men&n/&))an %erapa %esar )emamp&an1 )ese#iaan )ons&menmen&n/&))an %erapa %esar )emamp&an1 )ese#iaan )ons&men

&nt&) mem%ayar o&tp&t&nt&) mem%ayar o&tp&t

-&rva pena.aran0 S0 %iaya yang (ar&s #i)or%an)an )arena-&rva pena.aran0 S0 %iaya yang (ar&s #i)or%an)an )arenamempro#&)si o&tp&t0 )arena )&rva terse%&t men&n/&))an %erapamempro#&)si o&tp&t0 )arena )&rva terse%&t men&n/&))an %erapa

%esar pro#&sen (ar&s mem%ayar agar #apat mempro#&)si o&tp&t%esar pro#&sen (ar&s mem%ayar agar #apat mempro#&)si o&tp&t

Ting)at o&tp&t yang mema)sim&m)an nilai o&tp&t #alamTing)at o&tp&t yang mema)sim&m)an nilai o&tp&t #alam

pere)onomian a#ala( 234 5i)a pro#&)si )&rang #ari 23 ma)a nilaipere)onomian a#ala( 234 5i)a pro#&)si )&rang #ari 23 ma)a nilai

o&tp&t &nt&) )ons&men le%i( %esar #ari pa#a %iaya yango&tp&t &nt&) )ons&men le%i( %esar #ari pa#a %iaya yang#i)or%an)an ole( pro#&sen4#i)or%an)an ole( pro#&sen4

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Role of GovernmentRole of Government

Private SectorPrivate Sector + vol&ntary e'c(anges+ vol&ntary e'c(anges

P&%lic SectorP&%lic Sector + government activity+ government activity typically fnanced by mandatory taxestypically fnanced by mandatory taxes

monopoly on legitimate coercion and orcemonopoly on legitimate coercion and orce

Sektor swasta – pertukaran sukarelaSektor swasta – pertukaran sukarela

Sektor publik – kegiatan pemerintahSektor publik – kegiatan pemerintah- Biasanya dibiayai oleh pajak wajibBiasanya dibiayai oleh pajak wajib

- Monopoli atau pemaksaan yang sah dan berlakuMonopoli atau pemaksaan yang sah dan berlaku

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Why is the Pulic !ectorWhy is the Pulic !ector

"ecessary#"ecessary# 6ail&re of mar)et system6ail&re of mar)et system

Government may %e more efficient t(anGovernment may %e more efficient t(an

mar)etmar)et E7&ityE7&ity

!engapa se)tor p&%li) penting8!engapa se)tor p&%li) penting8

9 )egagalan sistem pasar9 )egagalan sistem pasar

9 pemerinta( le%i( efisien #ari pasar9 pemerinta( le%i( efisien #ari pasar

9 pemerataan9 pemerataan

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Market !ystem and $ndividualMarket !ystem and $ndividual

RightsRights Rig(t to free#om of e'c(angeRig(t to free#om of e'c(ange

Rig(ts protecte# %y"Rig(ts protecte# %y"

policepolice national deensenational deense

court systemcourt system

Protection of rig(ts creates incentives toProtection of rig(ts creates incentives topro#&ce goo#spro#&ce goo#s

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!istem pasar dan hak individu!istem pasar dan hak individu

$a) &nt&) %e%as #alam pert&)aran$a) &nt&) %e%as #alam pert&)aran

$a) #ilin#&ngi ole( " polisi0 perta(anan$a) #ilin#&ngi ole( " polisi0 perta(anan

nasional0 sistem penga#ilannasional0 sistem penga#ilan

$a) perlin#&ngan mencipta)an insentif$a) perlin#&ngan mencipta)an insentif

&nt&) mempro#&)si %arang&nt&) mempro#&)si %arang

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Government as Protector ofGovernment as Protector of

RightsRights Primary f&nction of government isPrimary f&nction of government is

protection of in#ivi#&al rig(tsprotection of in#ivi#&al rig(ts

Proper level of protection is #e%ata%leProper level of protection is #e%ata%le

!any rig(ts can %e protecte# t(ro&g(!any rig(ts can %e protecte# t(ro&g(

private provisionprivate provision

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Pemerintah seagai pelindungPemerintah seagai pelindung

hakhak 6&ngsi primer pemerinta( a#ala(6&ngsi primer pemerinta( a#ala(

perlin#&ngan (a) in#ivi#&perlin#&ngan (a) in#ivi#&

Ting)at yang tepat #ari perlin#&nganTing)at yang tepat #ari perlin#&ngan

a#ala( %el&m pastia#ala( %el&m pasti

Banya) (a) yang #apat #ilin#&ngi melal&iBanya) (a) yang #apat #ilin#&ngi melal&i

penye#iaan s.astapenye#iaan s.asta

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The Government as %iolator ofThe Government as %iolator of

RightsRights Any government po.erf&l eno&g( toAny government po.erf&l eno&g( to

protect rig(ts is strong eno&g( to violateprotect rig(ts is strong eno&g( to violate

rig(tsrig(ts

P&%lic sector instit&tions s(o&l# %eP&%lic sector instit&tions s(o&l# %e

#esigne# so as to act in p&%lic interest#esigne# so as to act in p&%lic interest

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Pemerintah seagai pelanggarPemerintah seagai pelanggar

hakhak Be%erapa pemerinta( yang )&at mamp& melin#&ngi #anBe%erapa pemerinta( yang )&at mamp& melin#&ngi #an

melanggar hakmelanggar hak

conto( "conto( "

Perlin#&ngan (a) )ons&men melin#&ngi (a) masyara)atPerlin#&ngan (a) )ons&men melin#&ngi (a) masyara)atmelepas)an (arga premi&m )e (arga pasar %erarti

pemerinta( melepas)an tangg&ng /a.a%nya atas

)omo#itas yang ting)at )ons&msi ole( ra)yatnya paling

tinggi0 Pertamina r&giPertamina r&gi

Lem%aga se)tor p&%li) se(ar&snya #irancang &nt&)Lem%aga se)tor p&%li) se(ar&snya #irancang &nt&)

%ertin#a) #alam )epentingan p&%li)%ertin#a) #alam )epentingan p&%li)

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The Pulic $nterestThe Pulic $nterest

:(at #oes it mean to act in t(e p&%lic:(at #oes it mean to act in t(e p&%lic

interest8interest8

Greatest goo# for t(e greatest n&m%erGreatest goo# for t(e greatest n&m%er

UtilitarianismUtilitarianism + p&%lic interest meas&re#+ p&%lic interest meas&re#

%y total &tility of society%y total &tility of society

Contemporary UtilitarianismContemporary Utilitarianism + .eig(+ .eig(%enefits an# costs%enefits an# costs

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Pareto CriteriaPareto Criteria

Pareto s&periorityPareto s&periority + c(ange ma)es at+ c(ange ma)es at

least one person %etter off; no one .orseleast one person %etter off; no one .orse

off off compares two possible situationscompares two possible situations

Pareto optimalityPareto optimality + no one can %e ma#e+ no one can %e ma#e

%etter off .it(o&t ma)ing one person%etter off .it(o&t ma)ing one person

.orse off .orse off applied to a single situationapplied to a single situation

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&riteria Pareto&riteria Pareto

Pareto s&perior " per&%a(an yang mem%&atPareto s&perior " per&%a(an yang mem%&at

se)&rang9)&rangnya sat& orang men/a#i le%i(se)&rang9)&rangnya sat& orang men/a#i le%i(

%ai); ti#a) a#a yang men/a#i le%i( %&r&)%ai); ti#a) a#a yang men/a#i le%i( %&r&)

<mem%an#ing)an #&a sit&asi=<mem%an#ing)an #&a sit&asi= Pareto Optim&m " ti#a) a#a seorang p&n yangPareto Optim&m " ti#a) a#a seorang p&n yang

men/a#i le%i( %ai) tanpa mem%&at sat& orangmen/a#i le%i( %ai) tanpa mem%&at sat& orang

men/a#i le%i( %&r&) <apli)asi pa#a sat& sit&asi=men/a#i le%i( %&r&) <apli)asi pa#a sat& sit&asi=

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The Pareto CriteriaThe Pareto Criteria

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&riteria Pareto&riteria Pareto

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The Pareto CriteriaThe Pareto Criteria

!ar)et E'c(ange an# Pareto Criteria!ar)et E'c(ange an# Pareto Criteria Satisfes utilitarian criterionSatisfes utilitarian criterion

Satisfes Pareto superiority in absenceSatisfes Pareto superiority in absence

o negati!e externalities"o negati!e externalities"

Political E'c(ange an# Pareto CriteriaPolitical E'c(ange an# Pareto Criteria Political processPolitical process – i all agree to a– i all agree to a

change# change is Pareto superiorchange# change is Pareto superior

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'imitations of Pareto Criteria'imitations of Pareto Criteria

ot possi%le to a#(ere strictly to Paretoot possi%le to a#(ere strictly to Pareto

criteriacriteria

Len#s legitimacy to stat&s 7&oLen#s legitimacy to stat&s 7&o

*oes not ran) all possi%le states of t(e*oes not ran) all possi%le states of t(e

.orl#.orl#

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&eteratasan &riteria Pareto&eteratasan &riteria Pareto

Ti#a) m&ng)in memat&(i secara )etatTi#a) m&ng)in memat&(i secara )etat

)riteria Pareto)riteria Pareto

!emin/am)an legitimasi stat&s 7&o!emin/am)an legitimasi stat&s 7&o

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(ther Measures of the Pulic(ther Measures of the Pulic

$nterest$nterest Potential compensationPotential compensation + gainers val&e+ gainers val&e

gains more t(an losers val&e lossesgains more t(an losers val&e losses

Cost9%enefit analysisCost9%enefit analysis + #ollar val&e place#+ #ollar val&e place#

on costs1%enefits of a pro/ecton costs1%enefits of a pro/ect

Social .elfare f&nctionSocial .elfare f&nction + in#ifference+ in#ifference

c&rves #epicting .elfare of entire societyc&rves #epicting .elfare of entire society

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)kuran lain tentang)kuran lain tentang

kepentingan pulikkepentingan pulik -ompensasi potensial-ompensasi potensial

Analisis %iaya manfaatAnalisis %iaya manfaat

6&ngsi -ese/a(teraan sosial6&ngsi -ese/a(teraan sosial

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(ther Measures of the Pulic(ther Measures of the Pulic

$nterest$nterest

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)kuran lain * +ungsi &ese,ahteraan sosial)kuran lain * +ungsi &ese,ahteraan sosial

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Positive and "ormativePositive and "ormative

EconomicsEconomics Positive economics + .(at isPositive economics + .(at is

conclusions will be either right or wrongconclusions will be either right or wrong

ormative economics + .(at s(o&l# %eormative economics + .(at s(o&l# %e in!ol!es !alue judgmentsin!ol!es !alue judgments

$konomi positi – apa itu$konomi positi – apa itu

kesimpulannya bisa benar atau salahkesimpulannya bisa benar atau salah $konomi normati – apa seharusnya$konomi normati – apa seharusnya

Melibatkan pertimbangan nilaiMelibatkan pertimbangan nilai

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"ormative Analysis and Pulic"ormative Analysis and Pulic

$nterest$nterest Positive analysis eval&ates effects of policyPositive analysis eval&ates effects of policy

Pareto criteria useul to e!aluate publicPareto criteria useul to e!aluate public

interestinterest

P&%lic sector involves normative analysisP&%lic sector involves normative analysis

Analisis positif mengeval&asi #ampa) )e%i/a)an <)riteriaAnalisis positif mengeval&asi #ampa) )e%i/a)an <)riteria

Pareto %erg&na &nt&) mengeval&asi )epentinganPareto %erg&na &nt&) mengeval&asi )epentinganp&%li)1&m&m=p&%li)1&m&m=

Se)tor p&%li) meli%at)an analisis normatif Se)tor p&%li) meli%at)an analisis normatif

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Goals of Pulic PolicyGoals of Pulic Policy

Reallocate reso&rces efficiently + positiveReallocate reso&rces efficiently + positive

analysisanalysis

E7&ity + normative analysisE7&ity + normative analysis

T&/&an )e%i/a)an p&%li)"T&/&an )e%i/a)an p&%li)"

!engalo)asi)an )em%ali s&m%er #aya secara!engalo)asi)an )em%ali s&m%er #aya secara

efisien + analisis positif efisien + analisis positif

Pemerataan + analisis normatif Pemerataan + analisis normatif

Holcombe 02

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