Interstate Competition and Welfare Policy

In 1996, the federal government terminated the Aid to Familieswith Dependent Children (AFDC) program and replaced it withthe Temporary Assistance for Needy Families program (TANF).Many powers once held by the federal government are now beingused by state governments. Will welfare assistance be redesignedand expanded or will states "race to the bottom?" This issueis investigated by examining state welfare policy choices duringthe latter years of AFDC(1976–1994). Because each stateunder AFDC had the authority to set the level of its welfareguarantee for families that had no income, it is possible toestimate the effects of interstate competition on AFDC guaranteelevels. By estimating a spatial autocorrelation coefficientwhile controlling for theoretically relevant variables and statefixed effects, this study finds evidence that states are sensitiveto the welfare policies of their competitors.     

Engineering the Competition: Affirmative Action as Subsidized Mobility

Equality of opportunity, or equality of individuals in a competition to reach unequal positions, has emerged as a fundamental cultural value over the course of American history. However, the ability of individuals to achieve desired occupations and statuses is limited by the structure of available opportunities and by the social origins of individuals. Affirmative action is an effort to engineer equality of opportunity by government intervention to promote the upward mobility of individuals with disadvantaged backgrounds. In the past, this effort has been directed primarily at compensating for the historical consequences of slavery and racial discrimination, but more recently socio-economic affirmative action has taken on the task of compensating for all disadvantages of social origin. This attempt faces several serious problems, though. It assumes that government is capable of continually re-engineering the competition. Beyond that, it aims at directing everyone toward a relatively small number of socially desired positions, promoting chronic shortages in the less-desired but necessary occupations.     

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.     

Foreign policy as a socially divisive issue: the KORUS free-trade agreement

While the Korea–United States (KORUS) free-trade agreement negotiations were concluded in 2007, and ratified in 2011, the agreement has remained deeply controversial. Labor unions, civil society groups, and opposition politicians in South Korea have criticized the agreement as being unfair, and also in the United States have voices spoken out against the agreement. The process of negotiation by South Korea was deeply flawed, and the conclusion of the agreement, that included a unilateral ratification by the ruling party in National Assembly, was forcefully opposed by many groups in South Korean society with violent demonstrations leading almost to the collapse of the Lee Myung-bak government. This article argues that it was not only the perception of potential economic damage to, in particular agricultural, domestic interest that was the main cause of the public resistance to the agreement, but that the unique nature of the relationship with the United States, and how this influenced the progress of negotiating and ratifying the agreement in South Korea, was a leading course of the divisiveness of the agreement and the massive resistance it faced. This is also why while the conservative Park Geun-hye government has expressed its willingness to re-negotiate other free-trade agreements, it has remained adamant in its refusal to even consider reopening the KORUS agreement. It is not only the apparent trade benefits that accrued to South Korea that is behind this refusal. With the ruling party having lost the April 2016 National Assembly elections and presidential elections scheduled for December 2017, the conservative elite, concerned about its electoral fate, has no interest in re-opening such a divisive issue as the KORUS free-trade agreement.