Search Results

This chapter expounds on another core argument of this book: given the paucity of universally accepted or empirically demonstrable truths, perceptions usually determine whether an individual views MNCs and FDI as being positive and desirable or negative and harmful phenomena. The first section is an overview analysis of economic ideology. It focuses on the important role that individual beliefs concerning the larger question of the virtues of free, unfettered markets versus government intervention in the economy shape attitudes towards multinational enterprises. In keeping with the eclectic, non-judgmental approach of this study, the second and third sections summarize valid intellectual arguments that can be made on behalf of, respectively, the wealth and efficiency-creating virtues of private enterprise and the need for government to protect the majority from the income-distorting avarice of big corporations. After a discussion of the roles of MNCs and FDI in the debate about the merits of globalization, a final section introduces yet another integrating theme of this study: the virtues of a middle-ground synthesis as opposed to an extreme government versus markets model of managing national economies and the international economic order.

This chapter describes two competing theories of special districts, emphasizing the features that differentiate them from other local public entities. The metropolitan reform theory emphasizes the importance of consolidating special districts with local governments to avoid wasteful duplication of costly services and to counter the problem of uncoordinated actions. Public choice theory, however, states the importance of special districts and claims that the districts create a competitive environment for local governments. This helps them perform more effectively and efficiently. Public choice theory offers the hope that districts will be more responsive toward water management for local needs. The chapter discusses the responsiveness of special districts to drinking water problems and their role in inter-local cooperation. Furthermore, it makes some assumptions about how developers may influence the governance of special districts.

The chapter is divided into two parts. The first part reviews various normative theories of the case for and against compensation or mitigation of transition costs. It briefly reviews efficiency theories, utilitarian theories, social contract theories, communitarian theories, corrective justice theories, and libertarian theories, pointing out the sharply divergent conclusions that many of these theories imply, from a strong presumption of no compensation or mitigation ever for transition costs associated with policy changes to a sweeping presumption in favour of compensation on the theory that most forms of government regulation should be viewed as ‘takings’ (and a variety of positions in between). The chapter then goes on to review various positive theories of the politics of transition policies, beginning with a review of public choice theories and extending these to incorporate as explanations of political behaviour structural, institutional, psychological, and ideational explanations. The chapter concludes that managing the politics of major policy transitions is likely to entail a complex interaction between normative and positive theories of the political process recognizing that many political constituencies will be motivated not only by narrow self-interest, but also broader notions of fairness captured in many of the normative perspectives on transition costs.

Public choice theory—the application of standard economics to the behavior of public officials and citizens—has long been criticized as mischaracterizing people’s motivations and behavior. The chapter analyzes how behavioral studies might contribute to a better understanding and developing of public law, including constitutional and administrative law. It critically discusses the behavioral analysis of governmental institutions and rule-making, citizens’ judgments and choices, and human rights (including issues in freedom of speech, the fight against terrorism, and affirmative action). Finally, the chapter critically examines recent behavioral analyses of public international law, the challenges they face, and the contributions they make.

This chapter describes the work of James M. Buchanan who received the Nobel Prize in 1986. Born in 1919, Buchanan received his doctorate from the University of Chicago in 1948. He was affiliated with several universities from 1948 until 1969 when he was appointed university distinguished professor at the Virginia Polytechnic Institute and State University. He was then a George Mason University emeritus professor until 2013. He was exposed to the teachings of Frank Knight, and contributed to the development of public choice theory. Public choice theory was seen as an extension of analysis on political alternatives to markets. Buchanan was considered to be a moral philosopher, constitutionalist, and economic analyst. His publications include Fiscal Theory and Political Economy, Economics: Between Predictive Science and Moral Philosophy and Explorations into Constitutional Economics.

In Kovacs v. Cooper, the Supreme Court permitted government to regulate the volume of sound trucks. One opinion stated that free speech does not include freedom “to drown out the natural speech of others.” Campaign speech of by interests drowns out all other campaign speech. This problem heavily distorts both the speaker’s right to speak and the listener’s right to know. The distortions disadvantage poorly financed candidates and mislead voters. What people think are the most important issues will be distorted; so will intensity of feelings on those issues. Such distortions will systematically skew electoral behavior based on false information. These distortions impair distributive autonomy of both listeners and speakers. In 2016, both presidential candidates overwhelmingly catered to wealthy donors. In this milieu, wealthy donors comprise the political “in” group; that is, the group who dominates government. Everyone else (the vast majority of voters) is a political “out.”

This chapter considers the theoretical aims of information regulation and the arguments for and against regulatory intervention in the information production chain. It relates the conceptual framework that Fama’s efficient capital markets hypothesis and Gilson and Kraakman’s mechanisms of market efficiency provide policy makers in considering how to regulate information dissemination and informed trading in capital markets. It further describes how behavioral finance and market microstructure theory have challenged that framework. It then considers the common types of market failure that justify regulatory intervention—underinvestment in public goods, dominant market share, agency costs, asymmetry of sophistication and access—while also discussing how public choice theory and regulatory failures may counsel restraint. The chapter ends with a discussion of market failures and regulatory failures in information policy that contributed to the recent financial crisis.

One sector that has conspicuously resisted more general trends towards trade liberalization, in many countries, has been their agricultural sectors, where tariffs, quotas, domestic subsidies, and export subsidies have been widely invoked to support domestic agricultural sectors that might otherwise have been uncompetitive in a free trade environment. This chapter explores normative and positive rationales for why agriculture has been treated as an exceptional case, focusing by way of a concrete example on Canada’s dairy supply management regime, which has been largely capitalized in quota values that average about $2 million per farmer and $28 billion in total. Canada’s trading partners are increasingly insistent that Canada place trade liberalization in this and other agricultural sectors on the negotiating agenda, but unwinding this scheme is likely to entail very large and concentrated losses for dairy farmers. This chapter explores various transition cost mitigation strategies, including partial compensation of quota holders, credible political commitments enshrined in trade treaties to at least partial trade liberalization, and alternative modes of financing compensation of existing dairy farmers through, e.g., a special but time-limited consumer tax, or a special but time-limited tax on exports associated with liberalization commitments obtained from Canada’s trading partners in return for commitments on Canada’s part to begin unwinding this scheme.

The creation of independent agencies, starting with the Interstate Commerce Commission in 1887, reveals a considerable degree of pragmatic evolution and development. Independence was not an essential element of this commission’s creation. Rather, the prototypical multimember structure emerged as a default model following experimentation in both Britain and the United States, and political compromise in the nineteenth century. At the outset, the ideology buttressing the independent regulatory agency was a theory of expertise. Such expertise resulted in practical independence from executive direction. The notion of expertise faced considerable pushback toward the end of the New Deal. And, by the 1960s, scholars recognized that the theoretical underpinnings of administrative expertise had been largely undermined, replaced in part by public choice theory and the growth of “interest group pluralism.”

Three broad features characterise transitions in public services over some twenty-five years following the post-1948 welfare settlement and form the focus of discussion for this and successive chapters. The first, on which this chapter concentrates, is an ideological commitment to the superiority of markets as a model for improving efficiency and effectiveness in public services. The chapter considers the effects of both compliance and resistance among voluntary organisations in relation to outsourcing arrangements, drawing on. The experiences of small service providers working with young people during two key periods of transition, as initial outsourcing and subsequently, local area commissioning were introduced. The findings from these area-based studies raise questions about the extent to which service markets have contributed to the colonisation of what were previously perceived as the autonomous spaces of voluntary sector activities. As political commitment to marketisation grows, this chapter discusses the dilemmas for voluntary organisations between remaining responsive to local stakeholders and competing for service funding. It also highlights the limited evidence on the benefits for service users of competitive outsourcing; and the poor attention paid in contracting processes to differentiating the advantages that contractors from different sectors may offer to specific service needs.

This chapter presents and discusses the most influential argument in favor of a capitalist economy characterized by widespread economic freedom as opposed to central government planning. Capitalist ecnonomies, on this traditional view, are better than planning because they are efficient. Normatively this is important since human welfare is important. Capitalism delivers the goods better than the alternative in terms of both the goods that are produced and the welfare that it generates. This is argument relies on the importance markets and trade to produce price signals disperse private, often implicit knowledge through a public signal. Capitlist markets are, in this sense, spontaneous orders that work best when left alone. The chapter then examines some counterarguments that emphasize the limits of price signaling and other alleged cases of “market failure.”