Regulatory Policy Making April 27, 1999

Defining an issue will control the final outcome: The more people are involved, the higher the level of conflict and the lower is the probability of change.

Symbolic Issues are the most difficult to change: n Issues do not have an intrinsic definition n Symbolic issues involve the most people and the highest level of conflict n Distributive issues involve the fewest people and the lowest level of conflict n If you want to defeat a proposal, get it define symbolically.

Examples of Symbolic Agenda Setting n Equal Rights Amendment n The abortion debate n Gun control n Kosovo and refugees n Daylight Savings Time?

Regulatory Agencies are Needed n Medical Licensing n Restaurant Inspections n Building Codes n Food Purity Regulations n FCC channel regulations

Mechanisms to Regulate n Price Controls –taxi fares –US Postal Service universal pricing

Mechanisms to Regulate n Exit-Entry Controls –FCC licenses

Mechanisms to Regulate n Standard Setting –OSHA –FDA

Mechanisms to Regulate n Allocate scarce resources –electromagnetic spectrum –fishing, logging and mining n Incentives –home mortgage insurance deduction –flood plain insurance

Historical Periods n Progressive period n New Deal n Great Society n Deregulation

Regulation is often a result from market failure n Monopolies n high information costs (e.g. drugs) n Actions hurt non- participants (e.g. passive smoking, pollution

Equity is an important value in regulatory policy n Rural vs Urban –RFD –Telephone service –Rural electrification n Wealthy vs Poor –heating oil –medicaid

Administration of Regulatory Policy n Protective regulatory n Competitive regulatory policy n Independent regulatory agencies –FCC, FTC, FDA n Cabinet agencies –OSHA, HUD

Deregulation in many industries n Telecommunications n air line n trucking n banking

Criticisms of Regulatory Policy n Ineffective (government is too clumsy) n Government is taken over by regulatee n Regulatory Action corrupts government n Intrusiveness by government n Increased size of government n Increased costs of doing business.

Deregulation in Electricity Deregulation of California's electricity is now almost a year old, but homeowners have yet to see any significant savings beyond a 10 percent rate cut mandated by the state, according to a San Francisco-based consumer group. And if the electric customer chooses a company that provides "green power,'' which is generated from solar, steam, wind or small hydroelectric dams, the monthly bill could be substantially more.

Passions over Deregulation - Against Nader characterized the battle ahead at the Capitol news conference. "Billions of dollars are at stake as big energy companies lobby Congress to deregulate the electric utility industry," he said. "Powerful economic and political interests are clashing at both the state and national levels in an effort to profit. If these vested interests succeed, we will be left with a few energy companies who control our energy future and who will weaken our democracy by their collateral political powers. Only a citizens movement with its own legislative agenda can counterbalance the forces of greed."

Business for Deregulation - Pro