Policy Paradox - The Art of Political Decision Making Chapters 1-2

Policy Paradox: The Art of Political Decision Making Chapter One Summary The Market and the Polis The author begins with the statement “A theory of policy politics must start with a model of political society, that is, a model of the simplest version of society that retains the essential elements of politics.” She chooses the word Greek word “polis”, which means city-state. This word is fitting because it describes an entity small enough to have very simple forms of organization yet large enough to embody the elements of politics. In searching for the elements of politics, it is helpful to use the market model as a foil because of its predominance in contemporary policy discussions. The contrast between the models of political and market society will illuminate the ways the market model grossly distorts political life. A market can be defined as a social system in which individuals pursue their own welfare by exchanging things with others whenever trades are mutually beneficial. Participants in the market are in competition with each other for scarce resources; each person tries to acquire things at the least possible cost, and to convert raw materials into valuable things that can be sold at the highest possible price. In the market model, individuals act only to maximize their own self-interest (which might include the well-being of their friends and family). Maximizing one’s own welfare stimulates people to be resourceful, creative, clever and productive, and ultimately raises the level of economic well-being of the society as a whole. With this description of the market model, an alternative model of the polis can be constructed by contrasting more detailed features of the market model and a political community. Community Because politics and policy can only happen in communities, community must be the starting point of the polis. Public policy is about communities trying to achieve something as a community. This is true even when there are conflicts over what the goals should be and who the members of the community are. Unlike the market, which starts with individuals and assumes no goals, preferences, or intentions other than those held by individuals, a model of the polis must assume both collective will and collective effort. A community must have a membership and some way of defining who is a member of the community and who is not. Membership is in some sense the primary political issue, for membership definitions and rules determine who is allowed to participate in community activities and who is governed by community rules and authority. The author notes a significant distinction between residence and citizenship. She continues with a discussion of the difference between political community and cultural community. A political community is a group of people who live under the same political rules and structure of governance and share status as citizens. A cultural community is a group of people who share a culture and draw their identities from a common language, history, and traditions. The political community can include many diverse cultural communities, and policy politics is faced with the question how to integrate several cultural communities into a single political community without destroying or sacrificing their identity and integrity. Membership in a community defines social and economic rights as well as political rights. The author recognizes that there is a component of “mutual aid” among community members. Mutual aid is a good in itself that people create in order to foster and protect a community. Sharing burdens brings and holds people together. And in a larger sense, sharing caring, and maintaining relationships is at least as strong a motivator of human behavior as competition, separation, and promotion of one’s separate selfinterests. Public Interest The concept of “public interest” may mean any of several things. It could be individual interests held in common, individual goals for the community, program or policies favored by a majority, or things that are good for the community as a community. It’s important to note in regards to public interest that often people want things for their community that conflict with what they want for themselves (such as lower taxes and good schools) and that what people want usually changes over time. At the very least, every community has a general interest in having some governing process and some means for resolving disputes without violence, defending itself from outsiders, and perpetual existence. There is virtually never full agreement on the public interest, yet it is necessary to make it a defining characteristic of the polis because so much of politics is people fighting over what the public interest is and trying to realize their own definition of it. The concept of public interest is to the polis what self-interest is to the market. They are both abstractions whose specific contents we do not need to know in order to use them to explain and predict people’s behavior. We simply assume that people behave as if they were trying to realize the public interest or maximize their self-interest. Essentially within a market the empty box of public interest is filled as an afterthought with the side effects of other activities. In the polis, by contrast, people fill the box intentionally, with forethought, planning, and conscious effort. Common Problems Common problems are defined as situations where self-interest and public interest work against each other. There are two types of common problems: actions with private benefits entail a social cost (industrial waste into a lake); and social benefits require private sacrifices (school system requires taxes). Any situation can be described in both ways (clean lakes are a social benefit requiring private costs of nonpolluting waste disposal and a poor school system is the social cost of high private consumption). So whether a situation is labeled as “social benefits and private costs” or “social costs and private benefits” is strictly a matter of point of view. Common problems are also called collective action problems because it is hard to motivate people to undertake private costs or forgo private benefits for the collective good. (Think global warming!) In market theory, common problems are thought to be the exception rather than the rule. In the polis, by contrast, common problems are everything. Most significant policy problems are common problems. The major dilemma of policy in the polis is how to get people to give primacy to these broader consequences in their private calculus of choices, especially in an era when the dominant culture celebrates private consumption and personal gain. Influence Fortunately, the vast gap between self-interest and public interest is bridged in the polis by some potent forces: influence, cooperation, and loyalty. Actions, no less than ideas are influenced by others-through the choices others have made and the ones we expect them to make, by what they want us to do, and by what we think they expect us to do. More often than not, the author argues, our choices are conditional. (Striking worker, post office complaint) Influence also leads to interesting collective behavior, such as “bandwagon effects” in elections when a candidate’s initial lead cause more people to support him because they want to back a winner or when panics happen when people fear an economic collapse, rush out to cash out their bank accounts or sell their stocks, and in so doing bring about the collapse they feared. One cannot understate that influence-in all its varieties and degrees of strength-is one of the central elements in politics. Cooperation In the polis cooperation is as important as competition for the following reasons. First, politics involve seeking allies and organizing cooperation in order to compete with opponents. Every conflict unites some people as it divides others and politics has as much to do with how alliances are made and held together as with how people are divided. Secondly, cooperation is essential to power and is often a more effective form of subordination than coercion. (Prison guard and prisoners) In the market, cooperation is usually described negatively (collusion, oligarchy, pricefixing, insider trading) while in the polis it is described more positively (coalition, alliance, union, party, support). Loyalty Cooperation entails alliances, and alliances are at least somewhat enduring. In the ideal market, a buyer will switch suppliers in response to a price or quality change. In politics, relationships are not so fluid. They involve gifts, favors, support and most of all, future obligations. Political alliances bind people over time. In the market, people are “buyers” and “sellers”. In politics, they are “enemies” and “friends”. Friendships are forgiving in a way that pure commercial relationships are not, or should be. In the polis, history counts for a lot; in the market, it counts for nothing. (It’s business not personal) This does not mean that political alliances are perfectly stable or that people never abandon friends and join with former enemies. But it does mean that in the polis there’s a presumption of loyalty. It takes a major event-something that triggers a deep fear or offers a vast opportunity-to get them to switch their loyalties. There is a risk to breaking old alliances and people do not do it lightly. Groups Because of the powerful forces of influence, cooperation and loyalty, groups and organizations, rather than individuals are the building blocks of the polis. Groups are important in three ways: First, people belong to institutions and organizations, even when they are not formal members and their opinions are shaped by organizations and they depend on organizations to represent their needs. Second, the author asserts, policy making is not only about solving public problems, but about how groups are formed, split, and re-formed to achieve public purposes. Third, groups are important because decisions of the polis are collective. Information In the ideal market, information is perfect, meaning it is accurate, complete and available to everyone at no cost. In the polis, by contrast, information is interpretive, incomplete, and strategically withheld. Correct information does exist, but in the politics, the important thing is what people make of such reports. Interpretations are more powerful than facts. For this reason, much of political activity is an effort to control such interpretation. (Think spin control). In the polis, information is never complete. More importantly for a model of the polis is that crucial information is deliberately kept secret for the reason that one expects someone else to behave differently once the information is made public. (Think Fred Thompson joining the race for presidency) Secrecy and revelation are tools of political strategy and information by its very nature is valued and valuable. Passion One of the “Laws of Passion” is that passion feeds upon itself. Like passion, political resources are often enlarged or enhanced through use. Channels of influence and political connections grow by being used. Political skills and authority also grow with use. The more one makes certain types of decisions, the easier it is to continue in the same path, in part because repeated decisions require no new thought, and in part because people are less likely to resist or question orders and requests they have obeyed before. This phenomenon of resource expansion is ignored in the market model. Another law of passion governing the polis is “the whole is greater than the sum of its parts”. A protest march means something more than a few thousand people walking down the street. Most human actions change their meaning and impact when done in concert or in quantity. Another is “things can mean (and therefore be) more than one thing at once.” (Health care expenditures) Ambiguity and symbolic meanings have no home in the market model of society, where everything has its precise value or cost. Power Power is the primary defining characteristic of a political society and is derived from all the other elements. It is a phenomenon of communities. Its purpose is always to subordinate individual self-interest to other interests-sometimes to other individual or group interests, sometimes to the public interest. It operates through influence, cooperation, and loyalty. It is based also on the strategic control of information. And finally, it is a resource that obeys the laws of passion rather than the laws of matter. Any model of society must specify its source of energy, the force or forces that drive change. In the market model, change is driven by exchange, which is in turn motivated by self-interest. Through exchanges, the use and distribution of resources is changed. In the polis, change occurs through the interaction of mutually defining ideas and alliances. Ideas about politics shape political alliances, and strategic considerations of building and maintaining alliances in turn shape the ideas people espouse and seek to implement. Stone, Chap. 1 To show how market models distort political life and to design an alternative model, the author contrast the political community and a market model based society. The Greek term, Polis, meaning city-state is used to embody the essence of the political society. It describes an entity small enough to have simple forms of organization, yet large enough to embody the elements of politics… In a market, the participants are competing for scarce resources and their goal is to make a profit by: 1. Acquire goods at the lowest cost 2. Convert raw goods to profitable finished goods The market model is used because of the prevalence in contemporary policy discussions. In the market model, the participants, 1. strive to maximize their own self-interest a. Self-interest is described as one’s own welfare as perceived by them This maximizing of welfare stimulates people to be resourceful, creative, clever and productive, and ultimately raises the level of economic well-being of the society as a whole and this is assumed to be benefits to all of society. The author discusses the difference between political community and cultural community. A political community is a group of people who live under the same political rules and structure of governance and share status as citizens. A cultural community is a group of people who share a culture and draw their identities from a common language, history, and traditions. The political community can include many diverse cultural communities, and policy politics is faced with the question how to integrate several cultural communities into a single political community without destroying or sacrificing their identity and integrity. In the construction of a new polis model the author looks at the concepts of society to contrast political community and the market model. 1. Unit of analysis, or who makes the determinations a. Under market it is the individual Unlike the market, which starts with individuals and assumes no goals, preferences, or intentions other than those held by individuals, a model of the polis must assume both collective will and collective effort. b. And in the polis, the community makes the determination 2. What are the motivations? a. In market model, it is self-interest which drives the motivation The author said, It’s important to note in regards to public interest that often people want things for their community that conflict with what they want for themselves (such as lower taxes and good schools) b. So In polis, it is the public interest which serves self-interest. 3. Chief conflict a. Individuals perceived welfare versus another’s Individuals perceived welfare b. In the polis it is Self-interest vs public interest (cost of externalities, use of commons) Common problems are defined as situations where self-interest and public interest work against each other. There are two types of common problems: actions with private benefits entail a social cost (industrial waste into a lake); and social benefits require private sacrifices (school system requires taxes). Fortunately, the vast gap between selfinterest and public interest is bridged in the polis by some potent forces: influence, cooperation, and loyalty. Actions, no less than ideas are influenced by others-through the choices others have made and the ones we expect them to make, by what they want us to do, and by what we think they expect us to do. More often than not, the author argues, our choices are conditional. (Striking worker, post office complaint) 4. Peoples ideas and preferences a. From the self-interest individual b. Strong Influence from the community 5. Nature of collective activity a. MM competition b. PM cooperation and competition In the polis model, cooperation is as important as competition for the following reasons. First, politics involve seeking allies and organizing cooperation in order to compete with opponents. Secondly, cooperation is essential to power In the market, cooperation is usually described negatively (collusion, price-fixing, insider trading) while in the polis it is described more positively (coalition, alliance, union, party, support). 6. criteria for decision-making a. mm Max self interest and min cost In the ideal market, a buyer will switch suppliers in response to a price or quality change. b. Loyalty, max self-interest, promote public interest In the polis, history counts for a lot; in the market, it counts for nothing. (It’s business not personal) 7. Building blocks of social action a. Mm individuals b. Pm groups Because of the powerful forces of influence, cooperation and loyalty, the groups and organizations, rather than individuals are the building blocks of the polis. Groups are important in three ways: First, people belong to institutions and organizations, their opinions are shaped by organizations and they depend on organizations to represent their needs. Second, the author asserts, policy making is not only about solving public problems, but about how groups are formed, split, and re-formed to achieve public purposes. Third, groups are important because decisions of the polis are collective. 8. nature of information a. accurate, complete, available b. where polis, tends to be, ambiguous, interpretive, incomplete, manipulated In the ideal market, information is perfect, meaning it is accurate, complete and available to everyone at no cost. In the polis, by contrast, information is interpretive, incomplete, and strategically withheld. Correct information does exist, but in the politics, the important thing is what people make of such reports. Interpretations are more powerful than facts. For this reason, much of political activity is an effort to control such interpretation. (Think spin control). In the polis, information is never complete. Secrecy and revelation are tools of political strategy and information by its very nature is valued and valuable. 9. How things work, a. Law of matter, resources are finite and diminish with use b. Law of passion, One of the “Laws of Passion” is that passion feeds upon itself. Like passion, political resources are often enlarged or enhanced through use. Political skills and authority also grow with use. The more one makes certain types of decisions, the easier it is to continue in the same path, in part because repeated decisions require no new thought, and in part because people are less likely to resist or question orders and requests they have obeyed before. This phenomenon of resource expansion is ignored in the market model. Another law of passion governing the polis is “the whole is greater than the sum of its parts”. A protest march means something more than a few thousand people walking down the street. Most human actions change their meaning and impact when done in concert or in quantity. Another is “things can mean (and therefore be) more than one thing at once.” (Health care expenditures) Ambiguity and symbolic meanings have no home in the market model of society, where everything has its precise value or cost. 10. source of change a. material exchange and quest to maximize own welfare b. ideas, persuasion, and alliances and pursuit of power, own welfare, and public interest. Control & Power is the primary defining characteristic of a political society and is derived from all the other elements. 1. Its purpose is always to subordinate individual self-interest to others. 2. It operates through influence, cooperation, and loyalty. 3. It is based also on the strategic control of information. 4. It is a resource that obeys the laws of passion rather than the laws of matter. Any model of society must specify its source of energy, the force or forces that drive change. In the market model, change is driven by exchange, which is in turn motivated by self-interest. Through exchanges, the use and distribution of resources is changed. In the polis, change occurs through the interaction of mutually defining ideas and alliances. Ideas about politics shape political alliances, and strategic considerations of building and maintaining alliances in turn shape the ideas people espouse and seek to implement. Chapter 2- Equity “Every policy issue involves the distribution of something.” A distributive conflict is any conflict where equity is the goal. The paradox of distributive problems: “Equality may in fact mean inequality; equal treatment may require unequal treatment; and the same distribution may be seen as equal or unequal, depending on one’s point of view.” (see cake in class distribution pps. 40-41) Equality = uniformity in distribution, sameness Equity = “distributions regarded as fair, even though they contain both equalities and inequalities” Three important dimensions to any distribution: 1) Recipients (i.e. Who gets something) 2) Item (i.e. What is being distributed) 3) Process (i.e. How is the distribution being decided upon and carried out) Horizontal equity- equal treatment of people of the same rank. Vertical equity- unequal treatment of people in different ranks. -rank/merit based distribution -group based distributions (e.g. quotas, affirmative action, etc.) In some instances (e.g. lottery, athletic competition) people accept unequal outcomes as long as there is a fair process in place for deciding the outcome. (many things of value are indivisible). Two views of equality1) criteria of the process: fairness in process 2) criteria of the recipients and items: the “end-result” People do not “always agree on the relevant characteristics of recipients and items.” That is where conflicts arise, in the descriptive and categorization process. Liberty: 1) freedom from constraints 2) “having enough basic resources to choose out of desire than necessity” -“fair shares” – everyone has at least a bare minimum to survive Discussion of liberalism vs. conservatism, which continues throughout the book. Equality – Deborah Stone 1. Political Science defined- “who gets what, when, and how” a. Distributions are at the heart of public policy controversies 2. Distributive conflict a. Equity is the goal for all sides, the conflict comes over how the sides envision the distribution of whatever is at issue 3. Paradox - Equality may in fact mean inequality; equal treatment may require unequal treatment; and the same distribution may be seen as equal or unequal, depending on one’s point of view. Equality - uniformity in distribution Equity - distributions regarded as fair, even though they contain both equalities and inequalities 4. In any distribution, there are three important dimensions a. The recipients b. The item c. The process 5. Challenges to distributive conflict a. Who should count as a member of the class of recipients b. Relevant internal divisions for distributing something and that these divisions have been ignored c. Some major divisions in society are relevant to distributive equity and that membership in a group based on these divisions should sometimes outweigh individual characteristics in determining distribution d. Expanding the definitional boundaries of the item is always a redistributive strategy, because it calls for using the more narrowly defined item to compensate for inequalities in a larger sphere e. The switch from a standardized value of the item to a more customized value f. For many things in life, we are willing to accept an unequal outcome so long as we know that the process was fair 6. The argument for Equality a. Criteria of Process i. Acquired fairly if: 1. Created newly or not formally held as property (inventions or rights to own) 2. Acquired by transfer (sale, gift, or inheritance) b. End-result concept i. Assumes that a just distribution is one in which both the recipients and items are correctly defined and each qualified recipient receives an equal share of each correctly defined item c. End-results look only at the end result and do not need any historical information as to how the distribution came about 7. Rawls defines the relevant class if recipients as all citizens, and he defines the relevant items as social primary goods a. Social primary goods are things that are very important to people but are created, shaped, and affected by social structure and political institutions (I.e. power, opportunity, wealth, income, civil rights, and liberties b. Natural primary goods are things very important to people but which, while affected by society, are less directly under its control (I.e. intelligence, strength, imagination, talent and good health 8. Rawls approach looks to our innate sense of justice as well as our fundamental rationality and then derives principles of equity by asking us to deliberate about rules for a just society without being biased by knowing our own situation (veil of ignorance) Stone: Policy Paradox Chapter 3 Efficiency: Getting the most out of a given input Achieving an objective for the lowest cost The ratio between input and output, effort and results, expenditure and income or cost and resulting benefit Conflicts with Efficiency: Who gets the benefits and bears the burdens of a policy? How should we measure the values and costs of a policy? What mode of organizing human activity is likely to yield the most efficient results? Trying to measure efficiency is like trying to pull oneself out of quicksand without a rope. There is no firm ground. Objectives for public policy are forged in political conflict and are constantly changing not handed down on a stone tablet. At the societal level, efficiency is an ideal meant to guide how society chooses to spend its money or allocate its resources in order to get the most value. Efficiency is always a contestable concept. Markets and Efficiency: The theory of markets says that as long as exchanges are both voluntary and fully informed, they lead to the goal of allocative efficiency: Resources always move in a direction that make people better off. o Every exchange should lead to a situation in which the new holders get more value out of the resources than the old holders. Challenges from the Market: In order for efficiency, there must be numerous buyers and sellers of any resource, so that no one person or firm can influence the market price. There must be full information about the available alternatives, so that exchanges truly result in the best situation for everyone. Decisions and actions of parties to an exchange must not affect the welfare of people who are not part of the exchange. Resources involved in exchanges must be used individually and used up if they are used at all. Challenges from the Polis: One can question the possibility of purely voluntary exchanges due to the vastly unequal distribution of income and wealth. The market model requires accurate and complete information. But information is always incomplete, interpretive and deliberately controlled. Individual actions have side effects on others. To ignore side effects, or to pretend that externalities are a defect in a miniscule area of human affairs, is to undermine the ability of public policy to achieve efficiency in any important sense. The Equality-Efficiency Trade-off: Equality eliminates the differential rewards necessary to motivate people to be productive. To maintain equality government must continuously interfere with individual choices about how to use resources, and in doing so, it curbs useful experimentation and productive innovation. To maintain equality requires a large administrative machinery that uses up resources but is not itself productive. Cartoon (pg 83) “Welfare doesn’t work, because it gives poor people an incentive to stay poor!” “Instead, let’s give the wealthy a huge tax cut. Then the poor will have an incentive to become millionaires.” Where labor is well organized and shares significant political power, where in other words, there is someone to “articulate the self-interest of the non-rich,” economic polices tend to reconcile equality with efficiency. The idea that the two are incompatible is a politically useful myth for the rich and powerful.