The competitive incentives of vertically integrated local exchange carriers: An economic and policy analysis

The U.S. Congress passed sweeping telecommunications reform legislation in 1996 that will enable the Regional Bell Operating Companies (RBOCs) to enter the interLATA long-distance market once certain conditions are met. This legislation empowers the state public service commissions, the Federal Communications Commission and the Justice Department to determine collectively when RBOC entry into interLATA long-distance markets satisfies the public interest. This article reveals that as long as RBOC long-distance market shares remain below certain critical levels, the RBOCs do not have the incentives (despite having the opportunity) to discriminate against their downstream competitors. These findings suggest that a public policy focused exclusively on eliminating the opportunity to discriminate may needlessly delay RBOC entry into interLATA markets and thereby deprive consumers of the benefits of enhanced competition.     

An economic theory of governability: Choosing policy and optimizing performance

When collective violence occurs, a management and decision-making crisis exists for governmental authorities. We examine this situation with an economic model of governability within states. Political decision-makers wish to minimize two goals that enter as components of the government's performance function: political violence and revolutionary change of regime. We further assume that authorities have only a scarce supply of two policy instruments available with which to respond to violence: the accommodation and repression of the demands of their oppositions. Moreover, these elites confront a number of structural determinants of violence and revolution. After laying out these basic components of the model, we propose several theorems about the causes of political performance and about the regime's decision-calculus. These are then proven through a comparative static analysis of the model and by optimizing the performance function. The deductions indicate that the regime's policy instruments produce contradictory effects on the targetted levels of violence and revolution. In general, both accommodation and repression of opponents will, up to some point, reduce violence (an intended consequence) but increase revolution (an unintended consequence). Thus, upon close examination the goals of political decision-makers, to simultaneously minimize both violence and revolution, turn out to be inconsistent. Authorities therefore select an optimal level of performance by balancing the costs and benefits that come from accommodating and repressing their opponents.     

The structured value referendum: Eliciting preferences for environmental policy alternatives

This article introduces a voting-based method for eliciting public preferences, referred to as a structured value referendum (SVR). The process for developing and implementing an SVR is viewed as a version of public sector decision analysis, in which problem-structuring activities are crucial, and preference is elicited on a large scale by voters selecting among specified alternatives. The present study discusses the steps involved in developing an SVR, drawing on the problem-structuring approaches of decision analysis. Next, the advantages offered by SVR are discussed and compared to standard preference elicitation techniques or conventional referendums. A rationale for the use of SVR as an approach to preference elicitation is provided. Political judgments that differentiate SVR from other elicitation approaches are considered; the nature of the preference judgments and the required level of measurement are discussed. Concluding sections of the study discuss the implementation of an SVR for a regional government in British Columbia, in which 34,000 people voted to select among wastewater treatment alternatives for managing a potential environmental risk.     

An economic theory of economic analysis: the case of the School of Salamanca

Public Choice - The School of Salamanca often is identified as the first economic tradition in the history of the “dismal science”. Its members anticipated principles later developed by...     

Toward a stakeholder-based policy process: An application of the social marketing perspective to environmental policy development

This article suggests that the application of social marketing principles to the public policy process can facilitate the efforts of governmental policy-makers and non-governmental stakeholders to articulate their policy desires and to encourage the adoption and acceptance of particular environmental policies. A conceptual framework is presented, emphasizing both the influence of stakeholders on environmental policy development and the education of stakeholders as to the potential effects of the policy. The purpose of such a conceptualization is to show how social marketing principles can be applied to the public policy process in order to enhance the likelihood of successful policy development and implementation.     

An essay on the rationality of economic policy: The test-case of the electional cycle

The literature on electional cycles is discussed in the light of the empirical findings by, in particular, the author. Two basically different types of explanations of such cycles are compared: (α) explanations based on the maximizing behavior of governments aiming at re-election. (β) explanations building on the insufficiently controlled pressures of events in a democracy. It is demonstrated that even when the most well known theory under (α) — the Nordhaus-MacRaemodel — is a rather fragile construction, a more robust argument, termed the ‘popularity investment argument,’ can be constructed yielding the same basic result. From the empirical literature it is concluded that almost the opposite pattern actually occurs in the data. It is finally demonstrated that the weak, but significant, empirical pattern is easy to explain by (β): The elections generate promises, which give most real expansion in the second governmental year and most inflation in the third year. An average behavior which hardly implies even medium-term maximization by governments as assumed under (α).     

The changing role of social experiments in policy analysis

Since 1968 more than thirty-five social policy experiments have been conducted in the United States. During this period through 1976 these experiments were generally long-term, large-scale tests of major new programs; thereafter, experiments became markedly more modest in scope. Although hundreds of millions of dollars were spent on the earlier programs, the experiments probably had only a negligible impact on policies. This result stemmed from a variety of factors: Social testing actually tends to exert a conservative influence on policymaking; and the time required to complete experiments and interpret results is often incompatible with the needs of policy makers. In addition, test results are often not effectively communicated to Congress, the administration and the public, and even when the results are conveyed, policy makers are frequently skeptical about the soundness of the methodologies employed. If recent experimental programs are to exert more influence on policymaking, program oficials will need to address these dificulties.     

Building institutional capacity for policy analysis: An alternative approach to sustainability

The project approach to development assistance has been criticized for failing to build lasting capacity. The problem lies not in the project approach itself, but in a failure to understand the constraints to capacity development and a consequent misdirection of effort. Policy analysis capacity is developed as an example. Policy analysis requires skills and abilities that public sector institutions in developing countries cannot sustain, owing to a combination of structural and organizational factors, among which personnel constraints are key. These factors inhibit the effectiveness of the standard approach, which seeks to establish analytic capacity within a specialized government unit (‘internal’ capacity). An alternative approach is to build ‘process’ capacity—the ability to get analysis done by other institutions, rather than the ability to do analysis internally. The author concludes that project strategies should be redirected toward a greater emphasis on building process capacity as a useful adjunct to internal capacity.     

State institutions, political power and social policy choices: Reconstructing the origins of Nordic models of social policy

Abstract.  The origins of the Nordic social policy model(s) need to be viewed broadly and historically from its late nineteenth-century initiation to the immediate postwar period (1940s to the early 1960s), when a social democratic model began to consolidate. In reference to the alternate social policy traditions of British poor relief and German occupational insurance, this article analyzes the sociopolitical contexts that finally prevented Scandinavian states from developing similarly, instead enabling development of universalistic social policy. The historical narratives are arranged with respect to four analytical aspects: policy development; the configuration of state institutions; the strength of liberal, conservative and leftist power blocs; and intra-Nordic divergence in all these respects. Such an approach integrates state-centred and power-resources-focused analyses of Nordic welfare.     

The social policy of the firm

The welfare state concept hides an important aspect of modern industrial societies. In capitalist countries welfare is provided through a mixture of public and private initiatives. The author suggests that the concept welfare economy more fully captures the economic interpenetration of public and private sectors. The growth of fringe benefits illustrates the extent to which private enterprise performs the welfare function.Government increasingly intervenes through processes of mandating, stimulating, regulating, and supporting, using private enterprise as the vehicle for delivery of welfare services. Government's traditionally conceived role as welfare service provider is also changed through recognition that it is both an employer and purchaser, significantly impacting society's original income distribution.An earlier version of this essay was presented as a lecture at the University of Melbourne and published in Ronald F. Henderson, The Welfare Stakes: Strategies for Australian Social Policy, Melbourne: Institute of Applied Economics and Social Research, 1981.     

Management strategy for economic and social development: Part II

The new and rapidly changing environment of development administrators includes (1) the emergence of a world society of interdependent nations, (2) a rapid and confusing technological and scientific revolution, (3) the expansion of service societies in industrialized countries, (4) new major alternatives for war, neocolonialism, despotism and materialism, and (5) development problems of ascending complexity and difficulty.Post-industrial beginnings in modern management arise from a background of management thought and technique in agricultural epochs and the more recent industrial revolution. They encompass computer technology; operations research; systems approaches, including systems engineering, management information systems, and general systems research; cost-effectiveness analysis and PPBS; social indicators; and future-casting. Their development has contributed to a growing gulf between technique and capability, to a triumph of technique over strategy and a retreat from human values.Attention is directed to specific strategies and tactics of introducing modern management techniques in developing nations. The efforts to do this during the 1960 Development Decade are reviewed. The prospects for the 1970's are previewed, and suggestions offered for problem area task forces and the expansion of U.N. activities in advancing, not merely diffusing, the current state of the art.Since the most significant modern management advances have been tactical, a dozen principles of strategic decisionmaking are suggested: (1) responsible decisionmaking, (2) the conflict essence of problems, (3) selectivity, (4) total system appreciation, (5) relative proportions, (6) sequential model-using, (7) problem interrelationships, (8) jointed incrementalism, (9) organized and unorganized interests, (10) the emotional basis of rational action, (11) investment in future capabilities, and (12) power mobilization and use.The paper ends by raising vital questions on the improvement of managerial values. This is done by specific proposals for a code of managerial ethics and the formulation of more humanistic management goals.     

Management strategy for economic and social development: Part I

The new and rapidly changing environment of development administrators includes (1) the emergence of a world society of interdependent nations, (2) a rapid and confusing technological and scientific revolution, (3) the expansion of service societies in industrialized countries, (4) new major alternatives for war, neocolonialism, despotism and materialism, and (5) development problems of ascending complexity and difficulty.Post-industrial beginnings in modern management arise from a background of management thought and technique in agriculturla epochs and the more recent industrial revolution. They encompass computer technology; operations research; systems approaches, including systems engineering, management information systems, and general systems research; cost-effectiveness analysis and PPBS; social indicators; and futurecasting. Their development has contributed to a growing gulf between technique and capability, to a triumph of technique over strategy and a retreat from human values.Attention is directed to specific strategies and tactics of introducing modern management techniques in developing nations. The efforts to do this during the 1960 Development Decade are reviewed. The prospects for the 1970's are previewed, and suggestions offered for problem area task forces and the expansion of U.N. activities in advancing, not merely diffusing, the current state of the art.Since the most significant modern management advances have been tactical, a dozen principles of strategic decisionmaking are suggested: (1) responsible decisionmaking, (2) the conflict essence of problems, (3) selectivity, (4) total system appreciation, (5) relative proportions, (6) sequential model-using, (7) problem interrelationships, (8) jointed incrementalism, (9) organized and unorganized interests, (10) the emotional basis of rational action, (11) investment in future capabilities, and (12) power mobilization and use.The paper ends by raising vital questions on the improvement of managerial values. This is done by specific proposals for a code of managerial ethics and the formulation of more humanistic management goals.     

An economic analysis of voting in Sweden

Using data from the Swedish Election Studies between 1985 and 1994 supplemented with time series on inflation and unemployment, I compare the impact of macro- and microeconomic variables on the individual vote. The principal finding is that macroeconomic variables influence the vote a bit more than microeconomic variables do. In consequence, both self-interest and public interest appear to be important explanations of economic voting in Sweden. Macroeconomic variables have, however, been much more influential in determining election outcomes. Since previous studies of economic voting have used cross-sectional data only, it is also worth noting that panel estimates indicate a much greater impact of macroeconomic variables on the individual vote than cross-sectional estimates do.