Why do we need Public Policies? Private Interests vs. Public Interests

Questions: Why do we need public policies? What is good public policy?

Concepts Markets Polis (Political Community) Private Interest Public Interest Public Policy Public Policy Decision- making Market failure Externalities Commons Problem Politics Collective Action

Fish Banks Simulation – What did We See? Market decision-making –Individual action to maximize individual welfare Some winners & Some losers Willing risk-takers & Unwilling risk-takers –Uncoordinated aggregate effects that affect others – Externalities Private interests Public interests

Fish Banks Simulation – What did We See? Commons Problem –Actions with private benefits social costs –Actions with social benefits private costs Collective Action Failure –No Community (Collective) Decision-making for common good –Unwillingness to forsake private benefits or accept private costs for the collective good

Fish Banks Simulation – What did We See? Government Intervention in the Public Interest –Actions with Positive Public Benefits may Impose Private Costs Create Inefficiencies –Unrelated policy actions Serving Some Public Interest may affect both private and public interests –Actions with social benefits social costs (public interest tradeoffs) –Actions with social benefits for one group social costs for another group (equity problems)

Collective Decisions & Public Decisions Individual Decisions I can choose, alone & without interference Collective Decisions Choices are made by a group & are binding on all Private Decisions My choice has no consequence for your welfare Liberty of the Individual: What socks should I wear? Whom should I marry? Tyranny of the Majority: Should we have a right to die? Should we restrict what people can read? Public Decisions My choices affect your welfare Theft by the Minority: Pollution & Energy Use Smoking in public places Liberty of the Group: How much should we spend on defense? How do we take care of the poor?

Political Community – Polis People living under the same political rules and structures of governance –Address shared problems and resolve political disputes within an agreed framework –Share status as citizens

Glue of the Polis Bridging the Gap between private and public interests –Influence (socialization) –Cooperation –Loyalty Foundation for groups in the Polis Did these play a role in Fish Banks?

Public Policy …communities trying to decide something as a community. – Stone(2001) Pattern of government decisions and actions to solve public problems – serving the public interest – Laws & Meyer(1999)

Politics: What is the relevant community & government? –What about fishers from outside the local community? –What about non-fishers from outside the local community? –Would the local governments of the various fishing communities have limited the catch? –How does including/excluding people from the relevant community affect policy making? How does a community determine that something is a problem? What or who defines the public interest? What is good public policy?

Public Interest as the Aggregate of Individual Preferences Uncoordinated (non-deliberative) choice Σ individual preferences –Is this the same as collective (social) preferences = Advantage: efficient Welfare Economics Model of Public Interest

Public Interest as Deliberated Interests Consensus orientation –Community knows what is good for it Universally subscribed collective choices Majoritarian subscribed collective choices

Public Interest as Prescribed Community Interests Experts determine community needs and proper level of government response –Professional/scientific analysis Public is rationally ignorant –Its preferences are uninformed And with good reason

What is good public policy? Is it what the people want? –Claimants are satisfied Is it what the government experts tell us we need? –Solving the most serious problems As the experts see them effectively Is it what the economists say maximizes the efficient use of resources? –Societal net benefits

End

Market Social system –individuals pursue their own welfare –Mutually beneficial exchanges –Competition for scarce resources –Efficiency is a major goal

Politics Clash of ideas, values, and interests in determining how things ought to be in society –Competing visions of the future of the community –Passion matters