Getting the Order Right: Child Support Guidelines and the Cost of Raising Children

This article argues that the United States Department of Agriculture’s (USDA) estimates of parental expenditures on children are an appropriate economic foundation for state child support guidelines. The USDA’s estimates are consistent with the public policy purposes of state guidelines and may improve the extent to which they accomplish federal intent. The article examines the role of valid and reliable child cost estimates in advancing the policy objectives for child support, summarizes the theoretical and empirical challenges of estimating those costs, suggests the limitations of the most widely used estimation methods in relation to the policy purposes described earlier, and evaluates the USDA’s method in relation to those same purposes. The evidence suggests that guidelines based on the USDA’s estimates are more likely than the most commonly used estimates to yield adequate child support orders and to allocate economic responsibility for children appropriately among the custodial parent, the noncustodial parent, and the state.     

Retention and retirement: The case of the U.S. military

The military retirement system provides an immediate, lifetime, inflation-protected annuity to personnel who complete 20 or more years of service. The cost of this system has risen substantially in the past 15 years, and the system's actuarial costs now comprise almost one-third of total military manpower costs. Because of its importance in the total military compensation system, the military retirement system exerts a significant influence on the age structure of the force and on personnel turnover patterns. This article evaluates the relative efficiency of the current retirement system by comparing it with two recently proposed alternatives, one by a presidential commission and one by the Department of Defense. It estimates the impact of these proposed alternatives on the military personnel force structure and on manpower costs. It is concluded that these alternatives would provide a force as capable as today's force at significantly lower cost.Order of authorship determined alphabetically. This paper presents results of analysis conducted while Enns and Nelson were associated with the Department of Defense and Warner was on the staff at the Center for Naval Analyses. The views presented herein are those of the authors.     

Opportunistic and partisan election cycles in Brazil: new?evidence at the municipal level

This article tests the hypothesis of opportunistic and partisan cycle models using a new large data set of Brazilian municipalities over the 1989?C2005 period. The results show an increase in total and current expenditures and a decrease in municipal investments, local tax revenues, and budget surplus in election years. They also show that partisan ideology exerts a relative influence on the performance of the local public accounts. These results confirm that both opportunistic and partisan cycles have occurred in the management of the budgets of Brazilian municipalities after the end of the military government.     

公共物品供给的交易费用多维度分析

制度分析学派通过不同制度的交易费用状况的比较,对各种制度的特征进行了较充分的分析.但是,对于公共物品的供给制度来说,由于公共物品的公共性价值特征导致的交易费用的复杂性,不能在单一维度的视角下笼统地仅考虑费用的数量大小,由此来评判制度安排和公共决策的好坏.因为除了信息不对称因素所产生的交易费用以外,有相当一部分被视为诱发交易费用的行为实际上是在体现和保证物品的公共性,这些费用表现为公共协商的成本和对损失方补偿的费用.试图从多种维度对公共物品供给中的交易费用进行分析,不仅对信息不对称如何产生交易费用进行了描述,还对公共协商和对损失方补偿产生的费用所表现出的公共性价值进行了解析;并借用了公共选择学派的广义宪政经济学理论,探讨了交易费用的最优解;最后倡导建立具有公共性特征的公共物品供给的交易费用现.     

Estimation of the Value and Cost of Government and Market Supplied Goods

A review of previous research indicates that people's valuationsof government supplied services are not closely related to theircosts, raising the question of how much people know about thecosts of such goods. Respondents rated the value of governmentand market supplied goods and services and estimated their costsin three studies. The respondents made poor estimates of the percapita costs of supplying government services, and were littlebetter at estimating per capita expenditure on a range of marketsupplied goods (e.g., expenditure on fruit), but they were quiteaccurate at estimating the prices of individual market supplieditems. Rated values of individual market supplied itemscorrelated well with the costs of the items, but rated annualvalues of both government and market supplied goods were moreweakly correlated with their annual per capita costs. The resultssuggests that the inaccuracy in estimating the costs ofgovernment goods might arise because such items do not haveindividual item prices rather than because people generally donot pay for them themselves.     

The Importance of Contract Design

This article examines the contract design decisions of three federal agencies—the Departments of Health and Human Services, Defense, and Homeland Security—using five years of data from the Federal Procurement Data System. Three basic contract design elements are charted—type (fixed price versus cost reimbursement), length, and value—across simple to complex products. All three agencies use short‐term, fixed‐price contracts for the majority of the purchases that they make. This basic contract design allows agencies to tap the benefits of competition: innovation and cost‐efficiency. However, the Departments of Defense and Homeland Security often dramatically increase the length and value of contracts through modifications to initial agreements. This approach forgoes the benefits of competition and may expose the agency to the risk of cost overruns, delivery delays, and diminished product quality.     

On the accuracy of regulatory cost estimates

This study compares ex ante estimates of the direct costs of individual regulations to ex post assessments of the same regulations. For total costs the results support conventional wisdom, namely that the costs of regulations tend to be overestimated. This is true for 14 of the 28 rules in the data set discussed, while for only 3 rules were the ex ante estimates too low. For unit costs, however, the story is quite different. At least for EPA and OSHA rules, unit cost estimates are often accurate, and even when they are not, overestimation of abatement costs occurs about as often as underestimation. In contrast, for those rules that use economic incentives, unit costs are consistently overestimated. The difference between the total‐cost and the unit‐cost results is caused by frequent errors in estimates of the effects of individual rules, which suggests, in turn, that the rule's benefits may also be overestimated. The quantity errors are driven both by difficulties in determining the baseline and by incomplete compliance. In cases of unit‐cost overestimation, unanticipated technological innovation appears to be an important factor — especially for economic incentive rules, although procedural and methodological explanations may also apply. © 2000 by the Association for Public Policy and Management.     

Strategic arms limitation treaties and innovations in weapons technology

Treaties to limit strategic arms, such as those resulting from the Strategic Arms Limitation Talks (SALT), are generally viewed as resulting in a reduced level of military spending and an increased level of security for both countries. This paper shows that such treaties generally would accelerate the qualitative arms race and could lead to the introduction of new and potentially destabilizing weapon systems. Thus, the result might be an increase in military spending and a decrease in the level of security for both countries. This result is supported by a formal model of bureaucratic decision making, in which defense bureaus choose between purchases of existing weapons systems or research and development expenditures on new weapons systems. The formal model leads to two theorems which identify the conditions under which arms limitation treaties lead to innovations in weapons technology and to increased military spending.     

Are bureaucrats efficient? An application to the provision of AFDC

The question on how bureaucrats behave in the provision of a public service has been the subject of a considerable amount of research, most of which has been largely theoretical and inconclusive, especially on the issue of efficiency. This paper builds a bureaucratic theoretical model and provides empirical evidence by examining the workings of a government bureau, supplying a public service, namely Aid to Families with Dependent Children (AFDC), at the state level. It builds and estimates a generalized short run cost function that allows for systematic relative price inefficiency and does not require cost minimization subject to market prices as a maintained hypothesis. The model tests cost minimization as a testable special case. The estimating procedure allows us to test for a number of other features of the technology that are of interest such as productivity growth, marginal costs, returns to scale, technical change, and factor demands.     

Prime ministers and the electoral cost of using the confidence vote in legislative bargaining: evidence from France

Do prime ministers pay an electoral penalty for using procedural force to pass laws? Influential theories of parliamentary governance and legislative bargaining assume that the use of the confidence vote procedure – parliamentary governments’ most powerful legislative weapon – entails an electoral cost, but evidence on this important claim has been scarce. This article provides the first estimates of how prime ministers’ public approval responds to their use of the confidence vote. Analysing time series data from France 1979–2008, it is found that prime ministers experience a considerable drop in approval after their use of the confidence vote that is not accounted for by standard economic and political covariates. The effect size is similar to a 1 per cent decline in economic growth. The findings help explain French prime ministers’ selective use of the confidence vote procedure. They also suggest that political costs constrain the bargaining power conferred by the confidence vote.     

Control and controls: A reexamination of control patterns in budget execution

Consistent choice in an inconsistent world requires processes both for rational calculation and effective control. The budgetary process incorporates both of these functions. However, students of public sector budgeting tend either to ignore budget execution or to view the time expended by budgeteers on the execution of budgets - as opposed to their construction - as a gross misallocation of resources. In the authors' opinion this perspective - or lack thereof - seriously undervalues the control function and the budgeteer's role in preventing control loss. At the same time, the authors acknowledge that budgeteers frequently misuse the controls at their disposal and that in certain cases (i.e., where competitive supply of a public service is justified and in effect) expenditure controls are redundant and serve no real purpose.Budget execution is primarily concerned with two kinds of expenditure controls, allotment controls and fund reports, and is supported by position controls. The immediate purpose of these controls is to insure that purchases are limited to the amounts and purposes specified in the budget act. However, given the typical relationship between the budget agency and the operating bureau, we argue that their ultimate function is to prevent the bureau from distorting or concealing cost and production information so as to increase its bargaining power, thereby permitting the budget office to insure that the preferences of the state are at least approximately met. Performance standards and control rules also serve to avoid inconsistency in the dealings between the budgeteer and the bureau and to stabilize expectations about the ground rules for bargaining and the likely outcomes of the bargaining process so as to reduce the costs of uncertainty to both sides.     

Privatization as institutional choice

A model based upon the common concept of rent-seeking behavior avoids an exclusive focus on the pecuniary motive in private institutions and the power motive in public institutions. Using this model, the case for privatization ranges from very strong to unpersuasive, with some fascinating intermediate cases. Where purchases are frequent, information is abundant, costs of a bad decision are small, externalities are minimal, and competition is the norm, privatization ought to be pursued. At the other extreme, in situations where externalities and collective interests abound, natural monopolies are dominant, distributional goals are important, or debate and experience will alter preferences, governmental determination of service levels and public provision should continue. Intermediate situations such as those involving education, health, and some aspects of enterprise development provide the most interesting and hotly debated areas. These intermediate situations have both private and collective characteristics, choices are made infrequently with little information, have monumental consequences, distributional considerations are critical, and public debate about the level and type of service substantially affects individual behavior.     

公共安全产品质量与成本及其价值探析

本文借助于厂商理论，从一个非传统或新管理主义的研究视角，较为详尽地讨论和分析了公安产品、公安产品质量以及公安产品质量成本的概念，并在此基础上提出并探究了这些概念的价值所在．从而在一定程度上为公安降低成本、提高效率与效益，以及最终改进公安质量提供了一个新的视窗或一种铺垫。     

On the Use of the Hidden Economy Estimates

The linkages between the recorded economyand the hidden economy are still largelyunknown. In this paper we establish one ofthe linkages by observing the importance ofthe `hidden economy' estimates inexplaining the variation in consumerdurable expenditures. The experiment wasconducted with the published `hiddeneconomy' estimates in Bhattacharyya (1990).It is observed that the estimated demandfunction for durable purchases is lesscomplex than the demand functions appearedin the existing literature. The estimatedequation raises a number of public policyissues, which are not apparent from otherexisting literature.     

Litigation Costs, Budget Impacts, and Cost Containment Strategies: Evidence from California Cities

Litigation costs are straining many municipalities' budgets and creating more uncertainty and flux in their annual budgetary processes. A 1996 mail survey of California cities conducted by the League of California Cities, to which 210 cities (45 percent) responded, shows that the level of litigation-driven budgetary strain is intensifying. The budgetary impacts of litigation have been quite substantial, no matter whether measured in terms of overall impact, percent increase, frequency and magnitude of budget amendments, actual dollar costs, or the tendency to settle cases just to save money. Population size makes a lot of difference in the level and type of impact as well as the cost containment strategies implemented by a city. Generally, the larger the city (and the more diverse), the greater the strain litigation costs have put on the budget. A higher percentage of big cities (over 100,000) than smaller ones blame rising costs on police liability, personal injury, civil rights, tort, Americans With Disabilities Act, Fourteenth Amendment and Fourth Amendment claims. Frivolous cases are a problem for cities of all sizes. So, too, are the rising incidences of rights-related cases being filed against cities by their own employees as well as private individuals. This trend will likely increase as the nation's population ages and diversifies ethnically and racially.     

Setting limits through global budgeting: hospital cost containment in Rhode Island

In 1974, hospitals in Rhode Island have participated in annual negotiations with state officials and representatives from Blue Cross to determine the allowed increase in statewide hospital costs (the "Maxicap") for the next fiscal year, based on projected increases in hospitals' revenues, changes in patient volume and operating expenses. Individual hospital budgets may be above or below the Maxicap as long as the total increase in hospital costs for all hospitals in the state does not exceed the negotiated amount. At a time when regulatory solutions are increasingly under fire, continued support for Rhode Island's approach to hospital cost containment from third party payers, providers and public officials stands in stark contrast to other states where rate setting was either dismantled or discredited as a cost control strategy. A negotiated global cap on hospital expenditures offers an alternative to formula-based state rate-setting methodologies which could be incorporated as part of an all-payer reimbursement methodology or as an incremental step towards more comprehensive reform.     

Revenue Estimation/Scoring by States: An Overview of Experience and Current Practices with Particular Attention to the Role of Dynamic Methods

Revenue estimates or scores identify the expected impact of a change in a tax law or a change in how existing tax laws are administered. The processes used by states to produce these estimates have been given considerably less attention than have those used to create the revenue baseline or forecast, although both are important to creation of fiscally sustainable budgets. A review of state processes shows that estimating responsibility most often is in a legislative agency, that states usually employ microdynamic estimating methods, generally make their work available on the Internet although infrequently showing the methodology used for an estimate, and rarely have formal quality control procedures for the estimates. Macrodynamic estimates are very rare and some states once requiring this approach no longer do so.     

Developing economics expertise for the evaluation of primary health care

Given that government budgets are increasingly stretched in the face of competing demands, there is a pressing need for evidence on the costs and benefits of public sector investments. Nowhere is this need greater than in the health field, where the benefits of programmes are typically difficult to measure. Within the health sector a key area of interest is primary health care, which is generally regarded as a central function and the most important means by which the health of the population can be improved. This paper reports the results of a recent survey of Commonwealth countries which sought to establish the extent of economic evaluation of PHC programmes, the impact on decision-making and the level of health economics expertise available in Third World countries. Based on the results of the survey, suggestions are made for improving the commissioning and conduct of economic evaluations, for interpreting and implementing evaluation results, and for developing government expertise in economic evaluation.     

Untangling Housing Cost and Transportation Interactions: The Location Affordability Index Model—Version 2 (LAIM2)

Abstract

It is now accepted that to have an understanding of housing affordability one must consider not only housing costs, but also the transportation costs associated with that household location. To make this information readily accessible to the public, the United States government created an Internet resource, the Location Affordability Portal – Version 2 (www.locationaffordability.info), to provide housing and transportation costs for every neighborhood in all 50 states and the District of Columbia. Although the statistical model at the heart of this resource was designed for predictive accuracy, its design and parameter estimates can provide additional insights into the interaction of housing cost and transportation choices (and thus its cost). This study describes the development and explores the policy implications (and limitations) of this structural equations model, the Location Affordability Index Model – Version 2 (LAIM2).     

Outsourcing Public Health Laboratory Services: A Blueprint for Determining Whether to Privatize and How

In a continuing effort to reform and reinvent the way public organizations do business, the outsourcing of services has become a popular tool, particularly as resource constraints limit options available to governments. All too often, the decision is made, for reasons of ideology or resource constraints, to outsource services without giving careful consideration to the impact of privatization on the core missions of an agency, or whether privatization, in fact, offers real cost savings. Purchasing tools designed for traditional commodity purchases are often grossly unsuited for making decisions on specialized technical services.
This article suggests a process for the evaluation of an option to outsource laboratory services. It suggests that, prior to contracting or privatizing services, the concerned agency should evaluate:
the impact on the agency's core mission
the availability, stability, and reliability of private sector service providers
the relative costs of internal and external (public or private sector) service providers
the potential impact on regulatory enforcement
the ability to monitor the performance of external providers
potential conflicts of interest
Based on this model, the ongoing internal evaluation of services offers public agencies management tools to obtain the best value for the taxpayer dollar, not only in terms of the raw cost per test, but also in managing the quality of the services.