Privatizing Federal Credit Programs: Why Sallie Mae?

The federal government subsidizes lending to a number of borrowers—notably students, farmers, and homeowners. Government‐sponsored enterprises issue the securities that channel capital to many of these privileged borrowers. One of the largest of these enterprises, the Student Loan Marketing Association (Sallie Mae), is scheduled to be wholly privatized by September 30, 2008. What explains the privatization of this enterprise? To identify distinctive features of Sallie Mae that permitted or abetted privatization, we investigate the structure, related capital market innovations, and growth of three government‐sponsored enterprises. We conclude that a unique structural feature of Sallie Mae may explain the pace of privatization. The core asset of Sallie Mae, the student loan, is guaranteed and subsidized by the government. The case of Sallie Mae is an instructive yet poorly understood example of how the federal government can leverage private‐sector assets and incentives to achieve public policy missions.     

Moral Virtue and the Limits of the Political Community in Aristotle's Nicomachean Ethics

The recovery of Aristotle's view of the political community as guardian of the common good and moral educator has fueled a continuing debate about civic education and virtue. In focusing on the relation of virtue to the common good and that of the individual, however, this debate has obscured Aristotle's insight into virtue's status as an independent end. I argue that by taking account of this dimension of virtue, Aristotle's discussion of the particular moral virtues in the Nicomachean Ethics clarifies the nature and limits of civic education and shows that the full question of the human good emerges only with an investigation of the political community's highest and noblest pedagogic aims.     

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.     

Improving distribution of pharmaceuticals in developing countries: A case study of The Gambia project

Without sufficient sanitation, nutrition and primary health care infrastructures, developing nations must depend on pharmaceuticals as the principal defense against debilitating diseases such as malaria, schistosomiasis, river blindness, tetanus, and leprosy. Yet the distribution of pharmaceuticals within many developing countries is severely inadequate to meet the health care needs of large sectors of the population, particularly those persons living in rural areas. The result is that with 80% of the world's population, and an even greater share of the world's serious illnesses and disease, the Third World consumes only 20% of the global supply of pharmaceuticals. One of the major obstacles confronting individuals in developing countries that need pharmaceuticals is access — the drug delivery infrastructure is often inadequate. Problems exist in the entire range of drug management: Ordering, receipt, storage, distribution, and resupply. To help combat the problems, a unique collaboration began in 1981 at the initiation of several members of the Pharmaceutical Manufacturers Association (PMA), and Africare, a private voluntary organization, to improve the drug distribution and management system in The Gambia in Africa. The purpose of this article is to demonstrate the feasibility of transferring The Gambian model of cooperation between governments in developing countries, private voluntary organizations, and the international pharmaceutical industry to other Third World nations given different cultural, political and economic parameters. Last year, after observing how effectively The Gambia project had improved record keeping and management, the government of Sierra Leone invited Africare to help set up similar improvements in its drug distribution and inventory program. Although the multinational pharmaceutical corporations are often criticized by Third World governments for overpricing and dumping drugs, and excessive marketing schemes, The Gambia project demonstrates how the industry can work with health ministries to alleviate the problem of an inadequate supply and storage of pharmaceuticals particularly to poor, rural areas in Less Developed Countries.