Toward the usable recognition of individual benefits and costs in regulatory analysis and governance

Regulatory agencies in the United States and Europe have well‐deserved reputations for fixating on the total benefits and costs of proposed and final regulatory actions, without doing any more than anecdotally mentioning the subpopulations and individuals who may bear disproportionate costs or reap disproportionate benefits. This is especially true on the “cost” side of the cost–benefit ledger, where analysts exert little effort to even inform decisionmakers and the public that the costs of regulations might be distributed either regressively or progressively. Many scholars and advocates have observed that regulation can increase the efficiency of market outcomes, but caution about its untoward (or suboptimal) effects on equity. Here, we argue that without considering distributional information about costs and benefits, regulatory policies in fact can also cause violence to notions of efficiency, for two reasons: (i) society cannot hope to approach Pareto‐efficient outcomes without identifying those who must lose so that others can gain more; and (ii) because the harm experienced by involuntary risks and by imposed regulatory costs is likely non‐linear in its magnitude (at the individual level), efficiency is, in fact, a strong function of the shape of the distribution of these effects. This article reviews evidence about the distribution of regulatory costs and benefits, describes how agencies fail to incorporate readily available distributional information, and sketches a vision for how they could analyze costs and benefits to promote more efficient regulatory choices and outcomes.     

Distorted Communication,Unequal Representation: Constituents Communicate Less to Representatives Not of Their Race

Communications from constituents strongly shape the representation politicians provide. However, if politicians hear less from some constituents than others, this unequal communication may lead to unequal representation. In this article, I present a field experiment demonstrating that constituents are less likely to communicate to representatives not of their race. The experiment exploited electoral rules in Maryland, where several multimember districts have both black and white representatives. I provided 8,829 residents of such districts an opportunity to communicate to one of their actual representatives, whose race I randomized. Both blacks and whites were markedly less likely to communicate to their representatives not of their race. These results imply that politicians receive racially distorted communication, hearing disproportionately infrequently from constituents unlike them. The fact that most racial minorities have white representatives may thus help explain both minorities’ less frequent communication to their representatives and the diminished substantive representation minorities typically receive.     

The Cost‐Effectiveness of Welfare‐to‐Work Programs: A Meta‐Analysis

This article uses the tools of meta‐analysis to assess cost–benefit studies of 50 mandatory welfare‐to‐work programs that were targeted at Aid for Families with Dependent Children recipients and evaluated by random assignment. The findings suggest that the costs of a typical evaluated welfare‐to‐work program probably exceeded its benefits from the perspective of the government, but those assigned to the program, and possibly society as a whole, may reap small positive net benefits. However, there are individual programs that are very cost‐beneficial. Further analyses of the determinants of the cost‐benefits of welfare‐to‐work programs to government and society as a whole show that some services are cost‐neutral, but others entail net costs, which are sometimes substantial. The findings suggest that less successful programs might be made more cost‐beneficial by dropping vocational training and basic education as program components, leaving mainly lower cost components, such as mandated job search and sanctions, but also possibly the more costly financial incentives.     

Discounting the benefits and costs of environmental regulations

This paper develops a two-stage procedure for discounting the benefits and costs of environmental regulations that is a variant of the shadow price of capital approach. Under this approach, the capital costs imposed by a regulation are annualized using the marginal rate of return on capital and then both benefits and costs are discounted using the social rate of time preference. This approach yields results that differ significantly from those of conventional discounting when benefits occur with a substantial lag or when benefits are long term.     

Can New York and Los Angeles learn from Kumasi and Bangalore? Costs and benefits of rent controls in developing countries

Abstract

This article presents comparative static estimates of the costs and benefits of rent controls for four developing‐country cities: Cairo, Egypt; Kumasi, Ghana; Bangalore, India; and Rio de Janeiro, Brazil. The results are compared with those from four U.S. cities: New York; Los Angeles; Santa Monica; and Washington, DC.

Rent control regimes and their effects vary widely across cities and countries. Whatever the “average” cost or benefit of controls, all markets have large variances about the average, and the variation is rarely strongly related to income or other household characteristics in a way most people would find desirable. In the countries for which there was direct evidence, landlords were richer than tenants on average, but not remarkably so, and there was considerable overlap in the two income distributions. In Cairo, where there was direct evidence, key money made up much of the difference between controlled rents and market rents. In very strict regimes, substantial reductions in rents were sometimes largely or completely offset by losses in consumer's surplus (Kumasi). Controls that give differential treatment to favored groups like civil servants were found to distribute substantial benefits to those groups without much benefit to others (Bangalore). In countries willing to incur substantial transactions costs of indexation and renegotiation of rents for leases beyond market periods, control may make little difference on average, although a wide variance of benefits remains (Rio).     

Are voters cursed when politicians conceal policy preferences?

In campaigns, candidates often avoid taking positions on issues, concealing the policy preferences that would guide them if elected. This paper describes a novel explanation for ambiguity in political campaigns. It develops a model of candidate competition in which policy-motivated candidates can choose whether or not to announce their policy preferences to voters. It applies Eyster and Rabin’s (Econometrica 73(5):1623–1672, 2005) concept of cursed equilibrium, which allows for varying degrees of understanding of the connection between type (policy preference) and strategy (whether to announce). If voters updated according to Bayes’ rule, they would understand that candidates who do not announce positions are strategically concealing an unpopular policy preference. In equilibrium, only the most extreme candidates, those located furthest from the median voter’s position, would choose to take no position. However, if voters do not sufficiently appreciate the informational content of a non-announcement, unraveling will not occur and both extremists and more moderate candidates will not announce positions.     

Governance of Terror: New Institutionalism and the Evolution of Terrorist Organizations

A preoccupation with network approaches in terrorism studies has inadvertently marginalized the fact that terrorist groups are subject to many of the same bureaucratic forces that impact all purposeful organizations. Because typical organizations are subsumed in the concept of networks, it is curious that scholars have been so quick to bypass more traditional models of organizations and bureaucracy that may help us understand network topology. This article relies on the new institutional approach to organizational behavior. Using the Coase theorem to explain the costs and benefits associated with different organizational structures, it follows that counterterrorism efforts may drive some groups toward greater autonomy while compelling others to adopt common bureaucratic processes, often referred to as isomorphism. By exploring the different costs that terror groups face and examining the characteristics of terrorists associated with different groups, organizational theory can help explain a divergent trend in terrorism research: leaderless jihad and increased bureaucratization.     

Racial or Spatial Voting? The Effects of Candidate Ethnicity and Ethnic Group Endorsements in Local Elections

With the growth of Latino and Asian American populations, candidates frequently must appeal to diverse electorates. Strategies for doing so include emphasizing candidates’ racial/ethnic identity and securing endorsements from racial/ethnic groups. While many scholars focus on candidates’ racial/ethnic attributes, ethnic group endorsements are understudied. Whether such endorsements induce voters to choose ideologically similar candidates (spatial voting), or choose based on race/ethnicity (racial voting) is unclear. We address this question by examining elections in multiethnic local settings. Using original surveys and exit polls, we create comparable measures of candidate and voter ideology, and examine how race/ethnicity and ideology affect voters’ choices. We also embed experiments that manipulate ethnic group endorsements. We find that ideology influences voters’ choices, but that ethnic group endorsements weaken spatial voting. The latter effect among whites is driven by racial/ethnic stereotypes. These reactions explain why some candidates seek such endorsements and why others might prefer to avoid them.     

Michael Oakeshott on Civility, Civil Society and Civil Association

Contemporary treatments of 'civil society' have struggled to formulate clear and explicit criteria for determining which associations ought to count as part of a truly 'civil' society and, conversely, which other kinds of groups a liberal democracy would best avoid. Michael Oakeshott's idealized distinction between 'civil' association and 'enterprise' association may prove extremely helpful in sharpening these contemporary discussions of civil society. Rather than a conservative value with exclusionary and anti-democratic overtones, as many have alleged, the virtue of civility entails immanent inclusivity, democratic equality and the active recognition of others. Understanding civility in this way argues for both its normative and conceptual value in distinguishing the good from the bad in associational life. On the other hand, the contemporary literature on civil society draws attention to ambiguities in Oakeshott's thought that make his understanding of the liberal state, for better or worse, an improbable means of encouraging a rebirth of associational life.     

Empowering Members of Ethnic Organisations: Tracing the Political Integration Potential of Immigrant Associations in Stockholm

The voluminous participation literature notwithstanding, knowledge is still scarce on how voluntary associations more precisely provide their members with politically significant human and social capital. This article focuses on the capacities of immigrant organisations to promote the political integration of ethnic minority members. Analysing a unique dataset, based on face-to-face interviews with representatives of 106 organisations of four different immigrant groups in Greater Stockholm, the study empirically investigates what the authors refer to as an association's ' political integration potential ' (PIP) – the possibility of a given ethnic association to promote the inclusion of its members in the political community of the host society. As elements of PIP, the article examines associational-level political activity as well as support and mobilisation of individual members, and analyses how the former may be induced by the latter. Furthermore, the article tries to explain why some types of organisations do better than others in these respects. It finds that size and diversification of associations have an important impact on PIP, thus explaining observed differences between associations of the ethnic categories included in this study.     

Caribbean electricity restructuring: an assessment

This article assesses the privatisation of the electricity sector in two Caribbean countries, Jamaica and Trinidad and Tobago, to determine if they have been successful and whether they have contributed benefits to the respective societies. Two general methods are applied in assessing the success of the divestments; attainment of governments' stated objectives and commonly used utility performance metrics together with social and customer focus indicators. The results indicate that the stated objectives were broadly achieved, and the privatisation and its attempts brought benefits to the consumers and the society in general. The short to medium term benefits were accrued through lower labour costs per unit of electricity, higher performance of plant and operations and business led decision‐making. Long‐term benefits are accrued through the reduction or elimination of electricity supply deficits. However, although the basic privatisations were successful, the absence of an adequate regulatory framework in one case may have reduced the quantum of benefits through failure to enforce continuous improvement in the privatised generation company, and reductions in worker rents in the public distribution company. Further, benefits were reduced by long divestment processes, accompanying strategic drift, opportunity costs from delayed sale proceeds and efficiency enhancement, and the costs to sustain interim operations. Copyright © 2005 John Wiley & Sons, Ltd.     

Inefficiencies in Public Policies

'Government failures,' or inefficient public policies, can be classified broadly into two groups: those whose faults fall on the supply side and those that are imperfect on the demand side. The former are further divided into X-inefficiencies and those deriving from the failure to adequately perceive the actual policy benefits or costs. The latter result when policy demands are either inflated or lower than the socially optimal level. This article examines each of these groups in turn with the help of microeconomic analytical tools, proposing remedial political/policy measures for each.     

Governance and transnational civil society: the problem of transnational rent-seeking

The expansion of transnational civil society challenges the regulatory reach of nation-states, both individually and collectively. One regulatory challenge is that transnational civil society organizations (TCSOs) can avail of opportunities to engage in, or facilitate, transnational rent-seeking in ways which benefit a small group of organizations or individuals but which impose significant social costs. This article suggests that certain roles played by TCSOs lend themselves to rent-seeking behaviour and it explores the hypothesis that TCSOs can engage in, or facilitate, transnational rent-seeking where they constitute transnational special interests and/or private transnational authorities. To this end, the article outlines a brief theoretical framework and applies it to case studies of two TCSOs, representing transnational trade associations and industry lobbies, and sports associations and regulators. While the conclusions here are tentative, the article argues for further research including refinement of the theoretical framework and empirical testing.     

No Need to Watch: How the Effects of Partisan Media Can Spread via Interpersonal Discussions

To what extent do partisan media sources shape public opinion? On its face, it would appear that the impact of partisan media is limited, given that it attracts a relatively small audience. We argue, however, that its influence may extend beyond its direct audience via a two‐step communication flow. Specifically, those who watch and are impacted by partisan media outlets talk to and persuade others who did not watch. We present experimental results that demonstrate this process. We therefore show that previous studies may have significantly underestimated the effect of these outlets. We also illustrate that how the two‐step communication flow works is contingent upon the precise composition of the discussion group (e.g., is it consistent of all fellow partisans or a mix of partisans?). We conclude by highlighting what our results imply about the study of media, preference formation, and partisan polarization.     

When government programs create inequities: A guide to compensation policies

When the government institutes a program thought to be useful for society as a whole, such as building a highway or controlling air pollution, those that benefit from such programs are usually quite different from those that bear its costs. Sometimes the government responds by postponing or modifying the program, sometimes by compensating those that are bearing an inequitable share of the costs. By using familiar economic concepts, the analyst can more effectively choose between the two approaches. Applying those concepts to the case of highway construction in California, we conclude that in this instance cash compensation is clearly superior to postponement as the policy of choice.     

Ecological determinants of volunteerism among Asian and Latinx immigrants in California,US

ABSTRACT

Volunteerism offers various health benefits and increases the level of cohesion among communities. Connectedness to communities may be particularly important for immigrants to promote their integration into the host society. However, research that systematically examines factors that contribute to volunteerism, particularly among immigrants, remains scarce. The purpose of this study is to investigate the associations between the ecological determinants and volunteerism among Asian and Latinx immigrants. The authors used the 2009 California Health Interview Survey Multicultural Discrimination Module, the most recent and state-representative data available, and found the similarities and differences of those associations between Asian and Latinx immigrants. The authors discuss the implications of results and recommend that strategies to promote volunteerism among immigrants should be accompanied by consideration of their race and ethnicity, family, neighbourhood, and life experience.     

Mapping the consumption of government communication: a qualitative study in Germany

Successful communication between citizens and government is critical for the effective implementation of governance. Although government communication is highly relevant to society, few governments fully exploit the potential benefits of the direct communication instruments at their disposal. To establish foundations for encouraging various forms of government communication, this article starts by examining its reception among German focus groups and thus offering general implications for successful, citizen‐sensitive government communication. The results suggest the need for better articulation of interests in government communication, such that they appear more egalitarian, closer to the citizen, and online—that is, successful government communication demands considerable proximity to citizens, interactive feedback channels, and systematic participation by citizens in political processes. Copyright © 2013 John Wiley & Sons, Ltd.     

Proving,Pleasing and Persuading? Rhetoric in Contemporary British Politics

Expressions of disaffection with politics are often connected with criticism of the ways in which contemporary politicians speak and communicate. In this article I show how political speech is in part a product of the way in which a society organises and arranges communication institutionally, technologically and aesthetically. The art of rhetoric is most fundamentally concerned with how, in the midst of political dispute and contestation, political arguments may be made persuasive through their connection with the ‘common sense’ of audiences. This process enables a people to reflect on its beliefs and values and to assess their adequacy in particular circumstances. Decline in this art may be attributed to social and technological change but also, and above all, to the dominance of ideologies hostile to the concepts of ‘common sense’ and ‘common good’, and which privilege the arts of behaviour change and choice management over those of argument, debate and persuasion.     

Biofuel Investments in Sub‐Saharan Africa: A Review of the Early Legal and Institutional Framework in Zambia

Concerns about domestic energy security and global climate change mitigation have led the European Union, the United States, and others to introduce policies to enhance the use of biofuels in the transport sector fuel mix. While countries throughout the global South are positioning themselves to capture the economic benefits of this fuel transition, their capacity to do so is highly variable. This paper reviews the early evolution of the biofuel sector in Zambia to explore the extent to which the country is positioned to leverage future benefits of the emerging industry while forestalling negative social and environmental costs. In doing so, it sheds light on an under‐researched dimension of the ongoing debate over large‐scale land acquisitions and foreign investment: the role of legal and institutional frameworks in host countries in shaping outcomes. The analysis draws on the following: policy documents; stakeholder interviews with government departments, investors, and civil society stakeholders; and published and reported data on investments. Findings suggest that while existing and incipient policies and legislation provide an important foundation for attracting investors and achieving diverse sector aims, a number of gaps remain that are likely to hinder efforts to leverage meaningful benefits while minimizing negative impacts.