Brunei's strategic dilemmas

Abstract

This paper compares health policy trends in Indonesia, Malaysia, the Philippines and Thailand with the purpose of drawing usable lessons in reform. The study finds that governments in the region are rapidly privatizing the provision of healthcare at the same time as they are expanding the government's role in financing. The paper argues that expansion of public financing at the same time as private provision is misconceived as the combination would aggravate instances and severity of market failures peculiar to the sector. The dysfunctional trend is particularly evident in Indonesia and the Philippines. In Thailand, in contrast, the expansion of public financing has occurred in the context of a health system dominated by public providers, which has had the effect of restraining healthcare costs. Malaysia occupies a mid position between Indonesia and the Philippines on the one hand and Thailand on the other. All four cases underline the value of state capacity in designing optimal policies and implementing them effectively.     

The relationships between public and private pension schemes: an introductory overview

Only recently have social insurance and private pensions, collectively, come to be thought of in terms of a total social security benefit package. The economic problems brought on by the 1974 oil crisis initially triggered consideration of a common, integrated role for the two systems. The second oil crisis reinforced the relative expansion in private pension programs, as a supplement to social security. Before these events, private and public pension programs interacted in only a limited number of ways, confined to relatively few countries. These interactions were largely confined to collective bargaining, whereby private pensions were gradually extended to nearly all employees in France and Sweden; mandating, or legally requiring private supplementation of social security, debated in several countries in the early 1970's, but postponed by the 1974 oil crisis; and contracting out, or covering a part of the social security benefit under a private plan, as in the United Kingdom. Overall, the tradition of private pensions was not very strong or broadbased. The current debate centers on which public/private pension mix is desirable from the point of view of an old-age income-maintenance program. A new element is the rising support for a "third pillar"--individual tax-encouraged savings--not only as a supplement, but as an alternative to social insurance.     

Comparative Social Security: The Challenge of Evaluation

There has been dramatic global expansion in the national provision of social security programs throughout the twentieth century. This has provided very fertile ground for the comparative analysis of social security programs and systems over the last forty-five years. Most comparative studies, however, have, been content to describe and compare strategies, programs, institutions and values at the multinational or regional levels. There has been considerable reluctance either to engage in global studies or to embark on comparative-evaluative studies. This paper seeks to fill this gap by providing a framework for an evaluation methodology that permits the global ranking of social security systems and programs.     

Relationship between the retirement, disability, and unemployment insurance programs: the U.S. experience

This article was prepared initially for an international conference of social security program administrators and researchers. They examined the reasons for, and implications of, a recent trend in several European countries toward making it easier to qualify for retirement or disability benefits as a way of alleviating long-term unemployment. The article notes that the United States has not followed this trend. Instead, this country has continued to use temporary extensions of unemployment insurance benefits as a way to help the long-term unemployed during recessionary periods. Since the mid-1970's, the emphasis in retirement and disability insurance programs has been to strengthen the financial integrity of these programs rather than to expand eligibility. Described here are the progression of extended benefit provisions of unemployment insurance through the most recent recession, the historical development of early retirement features in the social security program, and the more recent attention that has been paid to the financing issues that have played a central role in legislation during the late 1970's and early 1980's. Unemployment experience and trends toward early retirement are examined, along with the role of public and private employee pension plans that supplement social security retirement benefits. Preliminary data from the Social Security Administration's New Beneficiary Survey show the prevalence of such pension coverage for recent retirees and the extent to which these pension benefits were claimed before normal retirement age.     

Worldwide trends and developments in social security, 1985-87

This article highlights major trends and developments in social security programs featured in the publication Social Security Programs Throughout the World, 1987. Certain developments observable in industrialized countries, especially in Europe--continuing high unemployment levels, particularly among the young; growing numbers of long-term unemployed; and aging populations--tend to create financial instability in social security programs. Thus, as program costs continue to rise, the emphasis on cost-effective use of social security funds becomes more pronounced. In the period under review, this concern is reflected in the widening interest in mandated private pension supplementation of social security, as well as in measures to encourage employment. In developing countries, a strengthening of programs for families and, in some instances, a lowering of the retirement age are noted, in addition to a general expansion in the benefit structure of the work-injury program.     

Social security trends and developments in industrialized countries

In the industrialized countries, there has been much discussion on the short- and long-range financing problems of their social security programs. Prolonged unfavorable economic conditions triggered by the oil price shocks of the 1970's and negative demographic trends have caused many of these countries to adapt their social security programs in an effort to maintain financial stability. System modifications that have occurred abroad over the past 10 years have centered primarily on changes in financing, adjustments for inflation, measures to slow down increases in health care expenditures, and steps to promote the hiring of the unemployed. This article examines some of the significant changes that have taken place in the social security programs of the Western European countries, Australia, Canada, Israel, and Japan since 1971.     

A shrinking state? Politics,economics and private health care in Thailand

This article explores the political and economic forces involved in the development of privatization policies within the health care sector in Thailand. It is suggested that many of the motivating factors behind private sector growth are outside of the health sector; the general macroeconomic environment and tax incentives have stimulated private sector expansion. Within the Ministry of Public Health a preoccupation with improving care in rural areas and an unclear policy line on the private sector has facilitated this expansion. Only recently has private sector growth come to the policy agenda. During this lag period a number of interest groups have developed. It will be difficult to overcome these entrenched interests in order to change policy direction. Meanwhile, problems of rapid cost inflation and inequity face the Thai health care system. Although this case study focuses upon the health care sector in Thailand it would appear relevant both to other sectors and to other countries. The relationship between development models based upon pro-private, pro-market tenets and the establishment of a satisfactory social policy is questioned.     

Terrorism, Airport Security, and the Private Sector

September 11, 2001, led to renewed emphasis on airport security in the United States. Before the tragedy, government policy led to a suboptimal level of security. The fundamental problem was not simply the use of private security firms, but rather the reliance on airline financing and poor Federal Aviation Administration (FAA) oversight. After 9/11 a federalized security system was put in place. The current system of tightened security is substantially more costly and should be evaluated in terms of its cost-effectiveness compared to a public–private approach.     

A Multilevel Framework for Effective Interagency Collaboration in Mental Health

The difficulty of coordinating service provision in interagency programs is a challenge for many working in public policy. We reflect on lessons learned through evaluating two inter‐agency supported housing programs for people with mental illness and propose a framework outlining components needed for well co‐ordinated service provision. We specify collaborative mechanisms at the policy, agency, service and client level. The key component is the role of an ‘integration coordinator': a person who is able to facilitate relationships and ensure effective information flows. Relationships need to be actively maintained to meet the inevitable challenges that will arise in complex interagency systems. The framework is relevant to policymakers across the public sector, including mental health, drug and alcohol, aged care, and policing.     

Astropolitics and the “Exopolitics” of Unacknowledged Activities in Outer Space

The role of unacknowledged classified programs remains an enigma for fully understanding activities in space and the study of astropolitics. Classified programs by law are not publicly announced, and remain inaccessible to all except those with valid security clearances to be briefed about them. In the United States, waived Unacknowledged Special Access Programs are the most highly classified programs conducted by the military and intelligence community. The same classification protocols are also required of private contractors working with U.S. military departments and intelligence agencies on classified programs. As space continues to grow in its national security significance, the number of these unacknowledged programs pertaining to space is likely to grow significantly from its current number. This requires adopting the necessary conceptual tools and methodological flexibility for investigating unacknowledged activities in space. This also extends to evidence concerning unidentified flying objects and extraterrestrial life. This article suggests that “exopolitics” is a unique multidisciplinary approach to extraterrestrial life that offers a helpful set of conceptual tools for studying unacknowledged space activities, and complements the field of astropolitics.     

The lightship in economics

What role does government play in the provision of public goods? Economists have used the lighthouse as an empirical example to illustrate the extent to which the private provision of public goods is possible. This inquiry, however, has neglected the private provision of lightships. We investigate the private operation of the world’s first modern lightship, established in 1731 on the banks of the Thames estuary going in and out of London. First, we show that the Nore lightship was able to operate profitably and without government enforcement in the collection of payments for lighting services. Second, we show how private efforts to build lightships were crowded out by Trinity House, the public authority responsible for establishing and maintaining lighthouses in England and Wales. By including lightships into the broader lighthouse market, we argue that the provision of lighting services exemplifies not a market failure, but a government failure.     

Federalism and suitable housing for the frail elderly: A comparison of policies in Canada and the United States

Abstract

The frail elderly have special multidimensional housing needs beyond affordability, including shelter that is more adaptive to reduced function and offers supportive services. Suitable housing for this population comprises three policy areas—housing, health care, and social services. In a federal system, development and implementation of policies in these areas involves participation of several levels of government and the nongovernmental sector. This paper uses federalism as a conceptual framework to examine and compare these policy areas in Canada and the United States.

In both countries, general national housing policies—relying heavily on the nongovernmental sector and characterized by joint federal‐provincial programs in Canada and by important local government roles and age‐specific programs in the United States‐have benefited the elderly. The effects of such policies on the frail elderly, however, have been less positive because of the general lack of essential human services and, to a lesser degree, health care that enables them to live outside institutions. This is especially true in the United States, where health care policy is fragmented and is dominated by a private insurance system, partial federal financing of health insurance for the elderly, and tense federal‐state relations in financing health care for the poor. Although Canadian policies and programs operate autonomously and more uniformly within a national health plan, neither country has a universal, comprehensive long‐term care system. Geographically diverse patterns of social services, funded by grants to states and provinces and the nonprofit sector, are common to both countries. However, the United States has inadequately funded age‐specific programs and has relied on a growing commercial service provision. Housing outcomes for frail elders are moving in the right direction in both countries; however, Canada seems to be better positioned, largely because of its health care system. As increased decentralization continues to characterize the three policy areas that affect suitable housing for frail elders, the United States can learn from Canada's negotiated federalism approach to more uniform solutions to merging housing and long‐term care.     

Explaining Privatization: Notes Towards a Predictive Theory

This article starts from the assumption that some of the theoretical work used to explain welfare-state expansion can be used 'in reverse' to explain privatization, here seen as welfare state contraction, i.e., the transfer from the public to the private sector of the responsibility for certain activities involved in welfare provision. To this end, valiants of the 'power resources' approach are examined. Finding that the 'labour movement' thesis does not have a strong predictive value, I then discuss the 'game theoretical' variant of the 'power resources' approach. Its usefulness for predicting privatization patterns seems limited because of the reductionism built into it. Following the neo-Institutionalists' argument that actor preferences and strategies both reflect and form institutional arrangements of the welfare state, some institutional typologies are developed which are relevant to the course and patterns of privatization. An ideal-type dichotomy between 'pluralist' and 'corporatist' institutions is discussed, in connection with a further delineation of decision-making, financing, and implementing structures. In conclusion, an effort is made to combine actor-oriented and institutional approaches to formulate some preliminary predictions about when and where certain patterns of privatization will occur.     

Stewardship and health systems strengthening: An overview

The World Health Organization (WHO) introduced the concept of stewardship to clarify the practical components of governance in the health sector. For the WHO, stewardship concentrated on how government actors take responsibility for the health system and the wellbeing of the population, fulfill health system functions, assure equity, and coordinate interaction with government and society. This article overviews the contents of this special issue, which offers examples of how health stewards in a variety of countries have addressed issues of health security, primary care expansion, family planning, and quality of care. The contributors' articles draw lessons for policy, programs, and management useful for practitioners and scholars. Our overview identifies several themes emerging from the articles: the foundational role of legal frameworks for effective stewardship, the importance of institutional arrangements as enablers, the influence of regional and global entities on national stewardship, the connection between credible decision‐making structures and stewardship, and pathways to sustainable financing and domestic resource mobilization. The discussion concludes with highlighting several gaps in knowledge and practice related to health stewardship.     

Multinational Corporations and Service Provision in Sub‐Saharan Africa: Legitimacy and Institutionalization Matter

This article considers attempts by multinational corporations to provide services in areas of limited statehood. Under which conditions are such attempts effective? We make two arguments: First, they must be legitimate to be effective. Second, the institutional design of the firms’ service provision programs is an important factor for their effectiveness. We assess these arguments by analyzing multinationals in the South African car industry fighting HIV/AIDS, and international mining firms in South Africa and the Democratic Republic of Congo trying to improve public security. The analysis demonstrates that under conditions of legitimacy and high degrees of institutionalization firm programs effectively contribute to service provision in areas of limited statehood.     

Comment on James H. Carr and Michelle Mulcahy's “Twenty years of housing policy: what's new,what's changed,what's ahead?”

Housing policy in the post Great Recession (GR) era faces tremendous uncertainties, but clearly there will be more sensitivity around risk, quality, and transparency in capital markets. The post-GR domestic policy environment and economy are likely to impose several overarching constraints, including less access to world capital markets for financing housing, more restrictive assessments of risk, and increasing restraints on federal domestic spending particularly for non-entitlement programs. Carr and Mulcahy provide a substantial agenda of liberal-progressive policies that focus on the predatory and risky practices of loan originators and promote expansion of home ownership for low-income households. If we are indeed on the brink of an era of austerity, the housing policy debate will need to focus on priorities for contraction rather than expansion in housing programs, and on tenure-neutral policies rather than promoting home ownership.     

Determinants of Business Response to Government Tax Incentives for Privately Financed Termination Benefit Programs

This study examines the industry and organizational factors that determine the likelihood of business response to government tax incentives for privately financed termination benefit programs and the substitution problems confronting government programs that use tax incentives to encourage businesses to provide these benefits to their employees. It concludes that government tax incentives will likely have marginal effects on the private provision of termination benefits, especially in large firms in industries with a strong market presence from government. These programs most likely will get high participation from large firms which already provide these benefits to salaried and hourly workers resulting in high substitution effects. They also are likely to extend benefits to hourly employees in firms that already provide similar benefits to salaried workers. However, these tax incentives are likely to have very limited inducement effects on small and medium-sized firms resulting in low overall target efficiency for these programs.     

THE MARKET PROVISION OF MANDATORY SOCIAL SECURITY: Protecting the Public Interest in Perpetuity

Pressures to introduce market reforms to public social security system emerged as a reaction to state welfare paternalism, drawing strength from the spirit of liberalism and emphasizing the virtues of the marketplace. Market reform advocates seek to shift the prevailing social security paradigm away from community solidarity to individual responsibility, with a view to divesting government of some of its statutory social security responsibilities. Market reform of public social security provision redefines the public‐private boundary, making socio‐political governance more a process of co‐ordination, steering, influencing, and balancing pluralist interactions, with the civil service increasingly expected to act as trustee of the public interest. What, however, the public interest is and how it differs from private interest is problematic and it should reflect the shared values that create social bonds and identity within a society. The daunting twin challenges facing governments are to design a set of regulatory arrangements that can protect the public interest in perpetuity, and to resist calls for government subsidies to support the economic rent expectations of privatized providers. To meet these challenges the “hollowed‐out” state must become a “smart” state.     

Public School Music: Notes on the Public Provision of a Quasi-Private Good

This paper uses a version of theBergstrom/Goodman median voter model toexamine whether there are aspects ofpublicness to public school music. It alsoexamines whether the provision of publicschool music is an example of the abilityof small groups to seek benefits forthemselves at the expense of larger groups. School music programs provide a uniquesetting in which it is possible to separatethe demand for school music programs by theconsumers of school music (the privatebeneficiaries) from the demand for schoolmusic programs by those who do not directlyconsume the product. If those who are notdirect consumers of music programs appearto value school music programs as a publicgood, their valuation cannot be confusedwith a jointly consumed private good, orconsumption of a private good with scaleeconomies, because they are not themselvesconsuming it as a private good. Using datafrom the 1987 Schools and Staffing Survey,the results from a logarithmic, normative,demand model show that (parents of)nonmusic students appear to value musicprograms as a public good. Once it isprovided for music students, additionalproportions of nonmusic students do notdemand additional music classes. In thatmodel, music students appear to value musicclasses as a private good. In thepositive, additive, demand model, moremusic students mean that more music classeswill be provided. Further, since music isvalued as a non-subtractable public goodwhose costs can easily be spread,increasing numbers of non-music studentsalso result in (slightly) more musicclasses. The method can be used to estimate thepublicness of publicly provided goodswhenever it is possible to separate thedirect beneficiaries of the good from thosewho could only value its externalities. The model seems particularly applicable tostudying the extent to which defense isvalued as a quasi-private good by theconcentrated defense industry; and whetherit is also valued as a public good bycitizen/voters with no connection to thedefense industry. It may also be usefulfor investigating still unsettled questionsregarding the publicness of publiclyprovided education.     

Private provision of public goods can be efficient

Economists have long believed that private provision of public goods will be inefficient, though recently some have argued that altruism may mitigate the inefficiencies. Without altruism, agents contribute to the point where marginal cost equals their private marginal benefits. With altruism, they contribute more and hence are closer to the point where marginal cost and total marginal benefits are equated. In an earlier paper (Bagnoli and Lipman, 1989), we showed that private provision need not be inefficient. In a very natural model of private provision without altruism, we showed that the set of (undominated perfect) equilibrium outcomes is identical to the core. Here we consider the effect of altruism on private provision. Altruism essentially creates more public goods because the well-being of others becomes a public good. We show that our model of private provision still has efficient equilibria under a wide variety of circumstances. Interestingly, the equilibria may be inefficient when agents are concerned about the effect of private provision on the distribution of wealth. Intuitively, the game we consider is a very powerful instrument for efficient private provision, but must be supported by other instruments if the set of public goods is expanded too far.We wish to thank Jim Andreoni, Ted Bergstrom, and an anonymous referee for helpful comments and to acknowledge financial support from the National Science Foundation through NSF Grant SES-8520296. Of course, any remaining errors are our responsibility.