Showing papers on "Government published in 1986"

Economics of the Public Sector

Abstract: What should be the role of government in society? How should it design its programmes? How should tax systems be designed to promote both efficiency and fairness? Nobel Laureate Joseph Stiglitz and new co-author Jay Rosengard bring an unparalleled level of expertise to address these key issues of public-sector economics. No other text is as modern, as accessible, or incorporates as much first-hand policy-advising experience by its authors as Stiglitz/Rosengard.

On the Limitations of Government Borrowing: A Framework for EmpiricalTesting

Abstract: This paper seeks to distinguish empirically between two views on the limitations of government borrowing. According to one view, nothing precludes the government from running a permanent budget deficit, paying interest due on the growing debt load simply by issuing new debt, An alternative perspective holds that creditors would be unwilling to purchase government debt unless the government made a credible commitment to balance its budget in present value terms. We show that distinguishing between these possibilities is mathematically equivalent to testing whether a continuing currency inflation might be fueled by speculation alone or is instead driven solely by economic fundamentals. Empirical tests which have been developed for this economic question lead us to conclude that postwar U.S. deficits are largely consistent with the proposition that the government budget must be balanced in present-value terms.

Privatisation: A Policy in Search of a Rationale

Abstract: Privatisation is a term which is used to cover several distinct, and possibly alternative, means of changing the relationships between the government and the private sector. Among the most important of these are denationalisation (the sale of publicly owned assets), deregulation (the introduction of competition into statutory monopolies) and contracting out (the franchising to private firms of the production of state financed goods and services). This paper principally examines the sale of government industrial assets which has now become both the most striking and the most controversial element of the programme. However, its analysis has implications for other means of privatisation and indeed its conclusion is that these should have greater priority. The paradox of privatisation is that the view that it contributes to economic efficiency is derived from the belief that private sector managers are subject to incentives and disciplines different from, and more demanding than, those which apply to their public sector counterparts. If this were so, then it would be expected that the prospect of privatisation would be distinctly unwelcome to the management concerned. But without the consent, or acquiescence, of these same managers privatisation of any sort is a difficult and protracted business. As a result, measures of liberalisation, or deconcentration, associated with privatisation those which offer most in terms of potential gains in efficiency are also those on which major concessions have been made to win management support for the political process of privatisation. In section VI we describe how this has happened in industry after industry.

Bidding for contracts: a principal-agent analysis

Abstract: This article models the process of bidding for government contracts in the presence of moral hazard. Several (possibly risk-averse) potential contractors (agents) submit sealed bids, on the basis of which the government (principal) selects one to perform a task. The optimal linear contract is derived. The bidding process induces the potential agents to reveal their relative expected costs. The optimal contract trades off giving the chosen agent an incentive to limit costs against stimulating bidding competition and sharing risks. The optimal contract is never cost-plus, may befixed-price, but is usually an incentive contract. Some prescriptions for government contracting emerge. * When the government offers a contract for a project such as the construction of a road or a warship, it usually calls for bids from interested firms and selects the lowest bidder. There are several informational asymmetries in this process. The government cannot directly observe any bidder's expected production costs, and therefore it does not know which is the efficient firm. Each bidder must determine his bid in ignorance of the expected costs of his rivals. After a bidder has been selected, he is better informed than the government about the vagaries of the particular project; thus, the government is unable to observe how much effort the firm is making to limit production costs. The government must design a contract to address both adverse selection (the government does not know the expected cost of any firm) and moral hazard (the government cannot observe the selected firm's effort to keep its realized production costs low). To complicate matters, if the firms are risk averse, it is in the government's interest to offer a contract in which the government bears some of the risk of unpredictable cost fluctuations. The forms of contract used in practice by governments make the payment to the contractor a linear function of its bid and/or its realized costs. With a fixed-price contract, the payment is simply the firm's bid. With a cost-plus contract, the government agrees to cover completely the costs incurred by the contractor, plus pay a fee that is either fixed in advance or is a proportion of costs. An incentive contract makes the payment depend both on the bid and on realized costs: if realized costs exceed the firm's bid, the firm is responsible for

The Second Treatise on Civil Government

Abstract: As one of the early Enlightenment philosophers in England, John Locke sought to bring reason and critical intelligence to the discussion of the origins of civil society. Endeavouring to reconstruct the nature and purpose of government, a social contract theory is proposed. "The Second Treatise" sets forth a detailed discussion of how civil society came to be and the nature of its inception. Locke's discussion of tacit consent, separation of powers, and the right of citizens to revolt against repressive governments, has made the Second Treatise one of the most influential essays in the history of political philosophy.

Interest groups and the size of government

Abstract: The results of the previous section, estimates of a three equation model from 23 observations, must obviously be regarded as tentative. The consistent positive relationship between number of interest groups and size of government observed with changing sets of included independent variables, changing samples of nations, and treating the number of interest groups as either exogenous or codetermined, does imply rather unequivocally that interest groups are able to influence public policies in such a manner as to lead to increased government size. Beyond helping to reinforce this conclusion, the results of the previous section should be regarded as first steps in the development of a model of the polity that can explain participation in the political process by interest groups and citizens as well as the size of government. The two most important variables explaining government size other than the number of interest groups proved to be population and the percentage of the population voting. The consistently negative relationship between relative government size and population is noteworthy since several recent papers have assumed that the only government output is redistribution. The negative relationship, implying that an increase in population leads to a less than proportionate increase in the size of government, shows that government expenditure exhibits a most basic public good characteristic. The percentage of the population voting, which probably is closely related to the proportion of voters with incomes below the median, consistently has a positive and significant impact on the size of government. The Meltzer-Richard hypothesis that greater participation by low income voters leads to more redistribution and greater government size is strongly supported. The inclusion of both the interest group and voter participation variables in the government size equation relies on theories related to redistributive activities. The voter participation variable posits a direct responsiveness of government outcomes to voter preferences through the operation of the median voter theorem, and implies rich-to-poor redistribution. The interest group theory posits increasing government size through the addition to the public weal of expenditures on goods with disproportionate benefits for certain interest groups. Such expenditures have distributional implications since in the absence of government provision the interest groups would either go without the goods or have to provide them themselves. While the theory makes no explicit prediction about the direction of this redistributional flow, since the largest single category of interest groups in most countries by far is industry trade associations, one might expect poor-to-rich redistribution as the most likely consequence of interest group influence. Thus, the possibility exists that the influence of the two variables on the distribution of income might be largely offsetting, while their influence on the size of government is cumulative. Disaggregating the effects of these and other public choice variables is a promising avenue for future research.

A positive theory of discretionary policy, the cost of democratic government and the benefits of a constitution

Abstract: We offer an explanation of government's preference for discretionary policy action. The main elements are asymmetric information and the ability and desire of governments to maximize reelection prospects. Discretionary policy imposes a social cost. We show that the cost is eliminated if all voters have the same information as the government. An optimal, state contingent policy rule that precommits government through a constitution eliminates the cost by removing government's opportunities to exploit its informational advantage. Rules of this kind, and constitutional restrictions, are difficult to enforce in the presence of uncertainty and different information available to government and the public.

Computing and public organizations

Abstract: This survey of empirical research on computing in government updates a review that appeared ten years earlier in Public Administration Review. It focuses primarily on research related to the management of computing and on differences between public and private sector management of computing because the bulk of the new research and findings are here. The impact of computing on employment, structure, worklife, decision making, organizational politics, and constitutional issues is treated briefly because there is little new research andfew newfindings. The authors conclude that although the use of computers in government at all levels of the federal system has increased greatly over the last decade, research on computing in government has declined precipitously.

Shifts in China's Population Policy, 1984-86: Views from the Central, Provincial, and Local Levels

Abstract: Since early 1984, important but little-noticed changes have been taking place in China's population policy. 1 Although family planning remains mandatory and third children continue to be prohibited, substantial evidence suggests that China's birth planning program has become more lenient in the past two years. This note reports key changes in policy and practice at the national, provincial, and local levels, and assesses their import for the overall character of the program. It also draws out some of the broader shifts in policy approach that have occurred in the past two years. The review emphasizes family planning policy applied to the Han majority; policies for the ethnic minorities, who make up just under 7 percent of the population, have always been more permissive.2 I draw primarily on statements by government officials in China and articles in Chinese-language health and population publications; additional information was also provided by discussions with Chinese population specialists held during a lecture tour of ten demography research and training centers in November and December of 1985.

When federalism works

Abstract: Twenty years ago cooperative federalism, in the form of federal grant-in-aid programs administered by state and local governments, was applauded almost without reservation as the best means of helping the handicapped, the educationally disadvantaged, the poor, and other groups with special needs. More recently these same programs have been criticized for excessive regulations and red tape, bureaucratic ineptitude, and high cost. The criticisms have been used to justify efforts to curb federal domestic spending and terminate many grants-in-aid.In "When Federalism Works," Paul E. Peterson, Barry G. Rabe, and Kenneth K. Wong examine the new conventional wisdom about federal grants. Through documentary research and hundreds of interviews with local, state, and federal administrators and elected officials, they consider the implementation and operation of federal programs for education, health care, and housing in four urban areas to learn which programs worked, when, and why. Why did rent subsidy programs encounter seemingly endless difficulties, while special education was a notable success? Why did compensatory education fare better in Milwaukee than in Baltimore? Among the factors the authors find significant are the extent to which a program is directed toward groups in need, the political and economic circumstances of the area in which it is implemented, and the degree of professionalism among those who administer it at all levels of government. "When Federalism Works" provides a solid introduction to the most important grant-in-aid programs of the past twenty years and a thoughtful assessment of where they might be going.

Science in the Federal Government : a history of policies and activities

Abstract: Preface Preface to the First Edition 1. First Attempts to Form a Policy, 1787-1800 2. Theory and Action in the Jeffersonian Era, 1800-1829 3. Practical Achievements in the Age of the Common Man, 1829-1842 4. The Fulfillment of Smithson's Will, 1829-1861 5. The Great Explorations and Survey's Will, 1829-1861 6. Bache and the Quest for a Central Scientific Organization, 1851-1861 7. The Civil War, 1861-1865 8. The Evolution of Research in Agriculture, 1862-1916 9. The Decline of Science in the military Services, 1865-1890 10. The Geological Survey, 1867-1885 11. The Allison Commission and the Department of Sceince, 1884-1886 12. Conservation, 1865-1916 13. Medicine and Public Health, 1865-1916 14. The Completion of the Federal Scientific Establishment 15. Patterns of Government Research in Modern America, 1865-1916 16. The Impact of World War I, 1914-1918 17. Transition to a Business Era, 1919-1929 18. The Depression and the New Deal, 1929-1939 19. Prospect and Retrospect at the Beginning of a New Era, 1940 Chronology Bibliographic Notes References Index

Social Security reforms

Abstract: The government's proposed reform of social security is generally perceived by the left as a means of cutting public expenditure, in order to allow the government to make its long-promised tax cuts. In this article, Angus Erskine shows that the reform of social security may reduce public expenditure, but is, however, designed essentially to further the development of a low wage economy, to extend privatisation, and to alter the relationship between the individual and the state through increasing the influence of the market.

The impact of government export marketing assistance

Abstract: Until recently, little research has been directed at the measurement of the impact of governmental support on the firm. The major focus of this article is on the methodological and measurement issues that appear to have a confounding effect and may account for broad equivocality of the findings in many of the studies. An evaluation paradigm is developed and applied to the research reviewed. The article concludes with a synthesis of the issues and provides specific directions for future research.

Industrial support of university research in biotechnology

Abstract: A 1984 study of biotechnology companies reveals that nearly one-half of all such firms fund research in universities. Industry may support as much as one-quarter of all biotechnology research in institutions of higher education. These investments seem to be yielding substantial benefits to involved firms. Per dollar invested, university research is generating more patent applications than is other company research. Research relationships do pose some risks to traditional university values such as openness of communication among scholars. These risks may be greater in relationships involving small firms. The data also reveal that government is now, and seems likely to remain, the principal source of support for university research in biotechnology.

Office Seeking and Policy Pursuit In Coalition Theory

Abstract: In most coalition theories, assumptions about policy payoffs for parties and politicians have been used to constrain the coalitions which office-seeking parties can form, thus improving the fit between the expected formation of minimal-winning coalitions and coalitions that actually form. This paper considers policy maximization as a motivating assumption in its own right, one which may influence parties to the exclusion of office seeking or in varying combinations with it. Conversely, office seeking may preclude policy concerns or combine with them in various ways. Because this model characterizes these relationships as variable rather than assuming that office seeking will predominate, it can accommodate problems earlier theories ignored, such as the frequent occurrence of minority governments. We argue the case that this formulation can relate coalition formation to other aspects of government behavior and can lead to an empirical investigation using better policy indicators than have been available before.

Impact How the Press Affects Federal Policymaking

Abstract: "Every public officials and every reporter should read this important book. It is a detailed look at the critical ways in which the press influences the shaping of vital public policy. People in the government will now understand that they cannot do their jobs without the press, and the reporters who cover them will now understand that they, too, are participants rather than observers in the world of public affairs." -Elliot L. Richardson "A meaty and reflective analysis of the much-misunderstood and much-abused relationship between government and the press that, for good or ill, will largely determine the effectiveness in policymaking of the American system throughout the foreseeable future." -James R. Schlesinger, former Secretary of Defense "There is no more important relationship in public policymaking than that between the press and government. This book is an important and interesting contribution to the literature." -Leslie H. Gelb, national security correspondent, New York Times

The two different concepts of privatization

Abstract: The usefulness of much of the current discussion about privatization is impaired by a basic confusion about definitions and concepts. In particular, many observers fail to distinguish between the primary policy decision of government to provide a service and the secondary decision to produce a service. Either function or both may be "turned over" to private parties. In the latter case, the efficiency and effectiveness of government may be improved. In the former, the objective of social equity may be put seriously at risk.

Government and Politics in Africa

Abstract: This course is an introduction to contemporary Sub-Saharan African politics, focusing both on larger trends in the region and the substantial diversity of experience across individual countries. It will delve into Africa’s experience with a wide range of political regimes, conflict situations, and development trajectories in the post-independence era, and will attempt to counter the pessimism and sensationalism common to Western media accounts of Africa with a balanced look at the continent’s success stories as well as its crises. It will also investigate Africa’s precolonial, colonial, and post-colonial history for clues to understanding the challenges the region faces today.

Fragmentation and the growth of local government

Abstract: An assumption of the post-World War II metropolitan reform movement was that fragmentation of metropolitan regions into multiple local governments was wasteful and inefficient, increasing the cost and size of government. More recently, ‘polycentrists’ have argued that the competition between multiple governments in metropolitan regions can in factreduce the growth in government by providing a competitive check on the excessive demands of local bureaucrats for more resources. In this article, I explore the effects of fragmentation on growth in the size of suburban municipal government budgets and in the number of services offered. Competition inherent in more fragmented metropolitan regions is shown to slow the expansion in local government expenditures and service levels.

Controlling Bureaucracies: Dilemmas in Democratic Governance

Abstract: How can citizens of a democracy exercise control over government officials in ways that allow for effective government? In this book, Professor Gruber merges a sophisticated analysis with empirical research to develop a new approach to this perennial problem

The Gender Basis of American Social Policy

Abstract: During the last quarter of the nineteenth century, womenthousands of them -became increasingly organized and active in the attempt to promote the general welfare, especially by helping the most vulnerable members of society. As individual leaders and as group participants they were instrumental in organizing and nationalizing movements for public health (mental and physical), poor relief, penal and other institutional reform, education for the previously uneducated, and child welfare. As the nineteenth century waned and the twentieth dawned, women were prominent among proponents of a principle which was hitherto nearly alien to American ideology but which has now, a century later, come to be an accepted part of our political views: the government and, they increasingly argued, the national government, have a responsibility to promote the general welfare actively by providing initiative and support where necessary. The degree and types of support remain, perhaps more now than then, matters of profound political contention, but in the late twentieth century even the most conservative ideologues tend to agree that government must provide a "safety net" for its people. The late nineteenth and early twentieth centuries was also a time during which thousands of women, many of them the same as those involved in the general welfare movements, were agitating to promote women's welfare specifically. I The

Educational Decentralization: Weak State or Strong State?

Abstract: The objective of this paper is to demystify the concept of educational decentralization, particularly with respect to the role of the state in education.' The announced purposes of policies of decentralization, namely, increased participation in decision making at the local level and improved system efficiency, are laudable. But there is much confusion about the meaning of the concept and about what actually happens in the process.2 A major source of confusion about decentralization is in the most commonly used definition of the term. Centralization or decentralization is used conventionally to refer to the relationship between the government and the individual citizen.3 A centralized political system is defined as one in which a central government holds most or all authority and power. A decentralized system is one in which power and authority have been shifted down a ladder of aggregation. Decentralization is seen as a process of transferring or "devolving" power and authority from large to small units of governance. The smallest unit is the individual citizen, the atom of society. Authors who (implicitly) use this definition end up with privatization or the doctrine of the free market and the "sovereignty of the

Constitutional reform and effective government

Abstract: For years the public has become increasingly disillusioned and cynical about its governmental institutions. In the face of alarming problems - most notably the $400 billion budget deficit - the government seems deadlocked, reduced to partisan posturing and bickering, with the president and Congress blaming each other for failure. And neither party can be held accountable. The public tendency is to blame individual leaders - or politicians as a class - but an insistent and growing number of experienced statesmen and political scientists believe that much of the difficulty can be traced to the governmental structure itself, designed in the eighteenth century and essentially unchanged since then. Is that inherited constitutional system adequate to meet the challenges of the twenty-first century, or has the time come for fundamental change? Should we adopt an electoral system that encourages unified control of the presidency, the Senate, and the House? Lengthen terms of office? Limit congressional terms? Abolish or modify the electoral college? Introduce a mechanism for calling special elections? Permit legislators to hold executive offices? Redistribute the balance of powers within the governmental system? In this revised edition of his highly acclaimed 1986 volume, James Sundquist reviews the origins and rationale of the constitutional structure and the current debate about whether reform is needed, then raises practical questions about what changes might work best if a consensus should emerge that the national government is too prone to stalemate to meet its responsibilities. Analyzing the main proposals advanced to adapt the Constitution to current conditions, he attempts to separatethe workable ideas from the unworkable, the effective from the ineffective, the possibly feasible from the wholly infeasible, and finally arrives at a set of recommendations of his own.