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Transcript of The Cato Institute Washington, D.C.
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“Understanding Public Policy:
A Primer”
Daniel Griswold
Cato UniversityAnnapolis, MDJuly 25, 2011
The Cato Institute Washington, D.C.
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What is Public Policy?
• Complex and dynamic process – not what you learned in high school civics class
• What government does to and for society
• Collective action through the government
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Public Policies May:
• Regulate behavior
• Extract taxes
• Distribute benefits
• Organize bureaucracy
• Make war
• Some combination of the above
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Why Care about Public Policy?
“Just because you do not take an interest in politics doesn't mean politics won't take an interest in you.” – Pericles
“The natural progress of things is for liberty to yield, and government to gain ground." – Thomas Jefferson
“I am interested in politics so that one day I will not have to be interested in politics.” – Ayn Rand
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Analyzing Public Policy: a Framework
Michael Munger, Duke University, Analyzing Policy: Choices, Conflicts, and Practices (2000)1. Problem formulation
2. Selection of criteria
3. Comparison of alternatives
4. Political and organizational constraints
5. Implementation and evaluation
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Problem Formulation
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Selection of Criteria• What do we want to accomplish?
• Test of a good policy
a.Moral argument
b.Incentives
c.Constitutionality
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Comparison of Alternatives
Munger’s Criteria/Alternatives Matrix (CAM)
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Political and Organizational Constraints
“The Overton Window”• Unthinkable
• Radical• Acceptable
• Sensible• Popular• Policy
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Implementation and Evaluation• Did the program accomplish its goals?
• Good intentions not enough.
• Market outcomes, political acceptance, expert analysis
• Charles Murray’s Losing Ground; immigration enforcement; government K-12 school spending
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Education Spending vs. Performance
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How is Public Policy Made?
“Laws are like sausages, it is better not to see them being made.”
– attributed to Otto von Bismarck
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The Players:
Voters
Interest groups
Politicians
Administration
Civil servants
Bureaucrats
Capitol hill
Academics
Researchers Consultants
The mediaPublic
opinion
Think tanks
Experts
The courts
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Models of Policy Analysis• Institutionalism• Process model• Rationalist model: policy as maximum
social gain• Incrementalism: policy as variations on the
past• Group theory: policy as a group equilibrium• Elite theory: policy as elite preference• Public choice theory
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Public Choice Theory
• “Politics without romance”
• Public officials as self-interested actors
• Rent seeking• Concentrated
benefits, diffused costs
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Arrow’s Impossibility Theorem
• A rational individual who prefers Pepsi over Coke, and Coke over Dr. Pepper, will prefer Pepsi over Dr. Pepper.
• Arrow showed there is no “fair” voting method for constructing social preferences from arbitrary individual preferences.
• Society may not be a “rational chooser”
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A ‘Fair’ Voting System
1. Each voter can have any set of rational preferences. This requirement is called “universal admissibility.”
2. If every voter prefers choice A to choice B, then the group prefers A to B. This is sometimes called the “unanimity” condition.
3. If every voter prefers A to B, then any change in preferences that does not affect this relationship must not affect the group preference for A over B.
4. There are no dictators.
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Public Preferences: Trade Policy with China
Voter
Group
Unilateral Free Trade
Trade Agreement
Trade
War
Blues 1 2 3
Reds 2 3 1
Whites 3 1 2
Note: Rank order of preferences for each group
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The Outcome: Collective Irrationality
Unilateral Free Trade > Trade Agreement
Trade Agreement > Trade War
Trade War > Unilateral Free Trade
Endless Loop! No transitive preferences.
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What You Can Do• Vote, or not• Fund think tanks • Write letters to your congressmen• Blogging/social media• Take a career in ideas• Write op-eds and letters to the editor• Encourage other people to become
engaged
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Q&A & Discussion …
• www.cato.org
• www.freetrade.org
• Twitter: @DanielGriswold
• 202-789-5260