Knowledge and Incentives in Policy: Using Public Choice and Market Process Theory to Analyze Public Policy Issues (Economy, Polity, and Society) - Hardcover

Hardcover

ISBN 10: 1786603977 ISBN 13: 9781786603975

Verlag: Rowman & Littlefield, 2018

Inhaltsangabe

The relative effectiveness of various institutions, such as the market or government, is based on the ability for individuals to access and use dispersed knowledge in society and the incentives that steer their actions. Market process theory emphasizes the effectiveness of the price system to consolidate and transmit knowledge in the marketplace.

Together this framework provides new insights on the capability of individuals to cooperate and improve society, and the limits to government interventions in society. The original research in each chapter uses this economic way of thinking to analyze a variety of public policy issues, examining the incentives responsible for and the factors that contribute to the creation and effectiveness of the policies. These chapters, authored by public policy practitioners and researchers, tackle such pressing issues as public education, the process for approving medical devices, tax policy, and land use regulation.

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Stefanie Haeffele is the Deputy Director of Academic and Student Programs and a Senior Fellow for the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University.

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Knowledge and Incentives in Policy

Using Public Choice and Market Process Theory to Analyze Public Policy Issues

By Stefanie Haeffele

Rowman & Littlefield International, Ltd.

Copyright © 2018 Stefanie Haeffele
All rights reserved.

ISBN: 978-1-78660-397-5

Contents

Introduction, vii, 
Part I: International Policy, 
1 Can Governments Create Bureaucratic Structures That Overcome Knowledge and Incentive Problems?: An Analysis of the Millennium Challenge Corporation Rosemarie Fike, 3, 
2 The Political Economy of Intervention in the Conflict against ISIS David Wille, 39, 
Part II: Federal Policy, 
3 FDA Effectiveness Standards: Helpful or Harmful? Anna Rivers, 79, 
4 Exit, Voice, and Incentives: An Institutional Analysis of Urban Public School Districts Rachel Reese, 97, 
Part III: State and Local Policy, 
5 Firm-Specific Tax Incentives: The Bad and the Ugly Adam N. Michel, 131, 
6 A Better Tomorrow: Policy Reform and the Limitations of State-Led Targeted Economic Development Courtney Michaluk, 167, 
7 The Political Economy of Casino Licensing: A Case Study on Maryland ' s Experience Candace McTeer Mottice, 187, 
8 The Political Economy of DC School Choice: An Institutional Analysis of the Opportunity Scholarship Program Allison Kasie, 207, 
9 Stifling Urban Development with Land-Use Regulation: A Case Study of Redevelopment in Tysons Corner, Virginia Emily Hamilton, 243, 
Index, 271, 
Editor and Contributors, 289, 

CHAPTER 1

Can Governments Create Bureaucratic Structures That Overcome Knowledge and Incentive Problems?

An Analysis of the Millennium Challenge Corporation

Rosemarie Fike

Since Adam Smith, economists have been fascinated with understanding what accounts for disparities in the levels of wealth of different nations. Smith ([1776] 1976) argues that the path to economic prosperity is through the increases in productivity that arise out of a highly specialized division of labor combined with trade openness and a government that does not burden its citizens with predatory taxation. P. T. Bauer (1984, 2000) echoes Smith's emphasis on engaging in both small- and large-scale trade, and both Smith and Bauer stress the importance of private property in order to accomplish this.

These ideas have fallen in and out of favor with the economics profession throughout the years. The growing prestige of the international development aid community has resulted in a massive amount of research for alternative causal explanations for the disparity in the wealth of nations. For instance, Sachs (2001, 2003) and Sachs and Warner (2001) argue that geographic location is a factor in why some nations remain poor. Alternatively, La Porta et al. (2004); La Porta, Lopez-de-Silanes, and Schleifer (2008); and Glaeser and Shleifer (2002) argue that the legal origin of a country determines the differing levels of economic development. Additionally, Acemoglu, Johnson, and Robinson (2001, 2002) argue that a nation's level of wealth today is a result of the types of institutions, either productive or extractive, that were set in place at the time of colonization.

There is also a constant back-and-forth in academia about the effect foreign aid assistance has on the development progress of recipient nations. Overwhelmingly, the failure of the aid community to achieve any significant results after 60 years and billions of dollars leads one to believe that, at best, their efforts are a wash.

While economists have come to somewhat understand what does not cause economic development, there has been little progress in finding a panacea for what will. Mostly, this is because a panacea does not exist. William Easterly (2002a, 2002b, 2003, 2006) pleads with the aid community to stop looking for such a "magic bullet." Each impoverished nation is unique in the factors responsible for their present conditions. What unites many of these nations in their plight, however, is an institutional context that is not conducive to economic development and that does not protect the institutions of private property that are praised by Smith and Bauer.

North (1990, 1991) notes that a society's institutions, both those that are formally codified and those norms and traditions that remain informal, provide the rules that govern human interaction. When these rules favor a specific group over another or are exogenously introduced in such a way that does not meld with the culture and attitudes of the indigenous people, as is often the case with foreign aid reform policies, the result is often worse (Boettke, Coyne, and Leeson 2008).

Certainly, there are some institutions that appear to be conducive to growth in almost every situation. The mantra of the Washington Consensus Era development community, "stabilize, privatize, and liberalize," was one of the aid community's coordinated attempts to provide a prescription for economic growth (Rodrik 2006). Formalized property rights, as emphasized by Hernando De Soto (2000), for example, have been widely recognized by aid agencies and policy makers as providing individuals with both the incentive to improve on their situations through investing time and labor into what they own and the means to access credit markets using their titles as collateral. In some underdeveloped nations, however, formal property rights may not align with local traditions, may allow for easier expropriation by the state, or at best may be unnecessary.

For much of the 1990s, academics analyzing the efforts of foreign aid agencies focused on empirical questions regarding the relationship between development aid and economic growth. Burnside and Dollar (2000, 2004) were among the first to study this relationship. Their initial analysis finds that foreign aid is positively correlated with economic growth in situations where there exist good institutions. This postulation spurred a series of replies over a decade of regression, attempting to either confirm or overturn their initial finding. Easterly, Levine, and Roodman (2004) took the first step toward challenging Burnside and Dollar's results. Using the same data set extended further into the future, their results show that, at its best, aid does nothing in the way of economic growth but, at its worst, can often impede economic progress. Other research examines the effectiveness of foreign aid, controlling for the quality of various sets of institutions (Gwartney, Holcombe, and Lawson 1999; Knack and Keefer 1999; Brautigam and Knack 2004; Knack 2001, 2004). For development aid policy, the major takeaway is that aid may have a slight positive effect when placed in the right institutional context.

The recognition in foreign aid policy of the importance of institutions in economic growth was a by-product of the empirical investigations and has indirectly led to a shift in the conversation concerning foreign aid. The focus on the institutional contexts in which aid is most effective has turned the conversation toward reforming aid distribution to improve results. This possibility has brought hope about aid's effect on its recipients and its usefulness for economic growth.

Still, researchers recognize that there have been few examples of what can be clearly labeled as aid success stories. Massive investment in development programs in Latin America in the 1990s brought disappointing levels of economic growth, while the Asian miracle that occurred during the same decade resulted from promoting economic freedom, not foreign aid assistance. The instances in which aid efforts have...

Details zur Ausgabe

• Verlag: Rowman & Littlefield
• Erscheinungsdatum: 2018
• Sprache: Englisch
• ISBN 10: 1786603977
• ISBN 13: 9781786603975
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 302
• Herausgeber: Haeffele Stefanie
• Kontakt zum Hersteller: Rowman & Littlefield; https://rowman.com/; ; 4501 Forbes Blvd, Suite 200; Lanham; MD; 20706; USA
• Verantwortliche Person: gpsr@libri.de; gpsr@libri.de; ; Europaallee 1; Bad Hersfeld; 36244; Deutschland