Chapter Seven

Public Policy
 Learning Objectives
• 7.1 Distinguish between system goods, process goods, and policy
goods.
• 7.2 Define the four types of policy outputs and discuss how they are
shaped by a nation’s level of economic development.
• 7.3 Discuss the quality-of-life outcomes sought by domestic
government policy, with examples from various countries.
• 7.4 Discuss the international economic and security issues
addressed by government policies and explain how they are
affected by globalization.
• 7.5 Provide examples of the trade-offs that may be necessary
between desired policy outcomes.

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 Public Policy
• Public policy consists of all those
authoritative public decisions that
governments make.
• Outputs – decisions
• Outcomes – end results
• Political Goods – goals and values

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 Government and What It Does
• Governments do many things.
• Production of goods and services
• varies from country to country
• regulation of telecommunications and
air traffic
• provide defense, law enforcement,
roads, postal service
• may operate major industries

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 Political Goals and Political Goods
• Political goals motivate different policies.
• Political goods are organized around:
• System goods: Citizens are free and able
to act purposefully when environment is
stable, transparent, predictable
• Process goods: citizen participation and
free political participation; democratic
procedures, due process
• Policy goods: economic welfare, quality of
life, freedom, personal security

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© 2014 Pearson Education, Inc. All rights reserved.
 Public Policy Outputs
• Public policies may be summarized and
compared according to outputs classified into
four headings:
• Extraction of Resources – from domestic,
international environments
• Distribution – to citizens, residents
• Regulation – of human behavior
• Symbolic Outputs – exhort citizens to
engage in desired behavior

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 Extraction
• Direct extraction of services: compulsory
military service, jury duty, labor imposed on
convicts
• Direct resource extraction: taxation
• Direct taxes/Indirect taxes
• Progressive taxes/Regressive taxes
• Tax profiles of different countries vary:
• overall tax burden
• reliance on different types of taxes
• how they collect revenues

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© 2014 Pearson Education, Inc. All rights reserved.
 Distribution
• Transfers of money, goods, services - to citizens,
residents, clients of the state
• Distributive Policy Profiles
• Health, education, defense consume largest
proportion of government spending
• Developed countries allocate half to two thirds of
government expenditures to education, health,
welfare
• First modern welfare state in Germany in 1880s
• 1930s to 1970s most industrialized states adopted
and expanded welfare policies
• Mixture between social insurance and social
redistribution

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 Challenges to the Welfare State
• Welfare can be expensive
• Governments often have limited funds
• Committing future generations to pay
• Welfare states give citizens few incentives to
work

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 Regulation
• Regulation is exercise of political control over
behavior of individuals/groups in society
• Contemporary governments are welfare
states and regulatory states
• Governments regulate by:
• legal means
• material or financial inducements
• persuasion or moral exhortation
• Particularly important politically: government
control over political participation and
communication

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© 2014 Pearson Education, Inc. All rights reserved.
 Community Building and Symbolic
Outputs
• Intended to enhance people’s national
identity, civil pride, trust in government
• Enhance other areas of performance:
• make people pay their taxes more readily,
honestly
• comply with laws more faithfully
• accept sacrifice, danger, hardship

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 Domestic Policy Outcomes
• How do extractive, distributive,
regulative, symbolic policies affect lives
of citizens?
• Sometimes policies have unintended
and undesirable consequences
• To estimate effectiveness of public
policy, have to examine actual policy
outcomes as well as governmental
policies and implementation

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 Domestic Policy Outcomes
• Welfare:
• poverty, water quality, sanitation,
pollution
• Health:
• physicians, birth rate, life expectance,
infant mortality, malnutrition, fertility
• Education:
• skills, economic development,
secondary education, college education,
literacy rates, access to information
technology

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© 2014 Pearson Education, Inc. All rights reserved.
© 2014 Pearson Education, Inc. All rights reserved.
 Fairness Outcomes
• Promoting gender equality and empowering
women
• Modernizing status of women makes them
better informed and capable of making
choices that lead stable healthier
population
• Fairness in treatment of minority ethnic,
racial, religious groups also an issue
• Great income inequality violates standards of
fairness

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 Liberty and
Freedom Outcomes
• Political Rights:
opportunities for
citizens to participate
• Civil Liberties:
protection for
freedom of speech,
press, assembly,
religion, due process

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 Domestic Security Outcomes
• Crime rates increasing in many advanced
societies and in developing world
• High crime rates primarily found in urban areas
• migration increases diversity, conflict
• pace of urbanization explosive
• severe problems of poverty, infrastructure
• unemployment, drug abuse
• Crime rates have come down in U.S.
• stricter law enforcement, increased
incarceration time, decrease in youth

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© 2014 Pearson Education, Inc. All rights reserved.
 International Outcomes
• Economic, diplomatic, military, informational
• Outcomes of interaction among nations:
• prosperity or depression
• war or peace
• secularization or spread of religious beliefs
• Nationals economies more interdependent
• restrictions and trade barriers
• Environmental damage
• Cultural pressures
• Most costly outcome is warfare
• last decades of 20th century: three-quarters of war
deaths were civilians

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© 2014 Pearson Education, Inc. All rights reserved.
© 2014 Pearson Education, Inc. All rights reserved.
 The Complexity of Policy Choice
• Fact about political goods: cannot always
have them all simultaneously
• Political system often has to trade one
value to obtain another
• Opportunity costs: lose in one area by
committing resources to different good

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 The Complexity of Policy Choice
• Task of social science: discover conditions
under which positive and negative trade-
offs occur
• People do not share values, may be
serious conflicts
• Governments should provide means for
people to decide for themselves

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