The new policy sciences: combining the cognitive science of choice,multiple theories of context,and basic and applied analysis

It is time to imagine a new policy sciences. The policymaking world has moved on since its first design. So too has our understanding of it. The original policy sciences were contextualized, problem-oriented, multi-method, and focused on using scientific research towards the realization of greater human dignity. We introduce a new policy sciences that builds on such aims. We describe the need for realistic depictions of ‘rational’ and ‘irrational’ choice, multiple theories to portray the multifaceted nature of complex contexts, and the combination of applied and basic research. To set this new agenda, we build on two foundational strategies: identifying advances in the psychology of decision-making and describing how policy theories depict policymaking psychology in complex contexts.     

In remembrance of Robert D. Tollison

We discuss the mechanisms related to quadratic voting, from Vickrey’s counter-speculation mechanism and his second-price auction, through the family of Groves mechanisms and its most notable member, the Clarke mechanism, to the expected externality mechanism, Goeree and Zhang’s mechanism, the Groves–Ledyard mechanism, and the Hylland–Zeckhauser mechanism. We show that each mechanism that involves collective decisions has a quadratic aspect and that all of the mechanisms that we discuss are applications of the fundamental insight that for a process to be efficient, all parties involved must bear the marginal social costs of their actions.     

Lobbying,political connections and emergency lending by the Federal Reserve

This paper tests whether the political connections of banks were important in explaining participation in the Federal Reserve’s emergency lending programs during the recent financial crisis. Our multivariate tests show that banks that were politically connected—either through lobbying efforts or employment of politically connected individuals—were substantially more likely to participate in the Federal Reserve’s emergency loan programs. In economic terms, participation in these programs was 28–36% more likely for banks that were politically connected than for banks that were not politically connected. In our final set of tests, we attempt to identify a proper explanation for this peculiar relationship. While a broad literature speaks of the moral hazard associated with receiving bailouts, we test whether another type of moral hazard exists in the period preceding the bailout. In particular, we argue that, to the extent that political connections act as synthetic insurance, banks may have engaged in more risky behavior that lead them to the Fed’s emergency lending facilities. Tests seem to confirm this explanation.     

President-Elect Trump: Is the Past Prologue?

There is worldwide interest and concern over the pending US Presidency of Donald Trump. This article recounts the experience of the author and entrepreneur Merv Griffin with Trump in his business career and suggests clues for examining his exercise of the power of the Presidency. His choices for his cabinet and his advisers may well determine his success or failure. The evidence thus far is troubling.     

A Different Carbon Tax: The Sustainable Green Tariff

Two heated current political arguments focus on carbon taxes and tariffs. This essay will develop an argument for linking carbon emissions with tariffs, through a tax on goods entering a country based on the method of transport and distance traveled, rather than based on the country of origin or category of the product. The result would be to encourage more sustainable local production, to reduce currently externalized costs of carbon emissions, to generate new tax revenues to fund reductions in regressive social insurance taxes, and to provide benefits for those adversely affected by carbon emissions.     

American Power: The Challenge Within

The main threat to continued American leadership abroad is social problems at home. These include poverty and the decline of the working class, both of them caused initially by falling levels of work and marriage. Policymakers have traditionally tried to counter these trends by changing social benefits and incentives, but the problems are really cultural, reflecting a decline in individualism. The best answer is more structured schools and social programs that promote the disciplines essential to a free society, especially working. Immigration should also be reduced and more money spent on education, to promote assimilation. Despite Donald Trump’s election, consensus has built supporting such measures.