American Government and Organization PS1301 Friday, 12 September

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Outline A Case for Reform? Causes and Consequences If we want reform, what exactly are we reforming? Constitution, Institutions, Laws…. Today - Concepts Collective action, Collective goods, Prisoner’s dilemma, Free-rider

Concepts Coordination Prisoner’s Dilemma Collective Action Free rider

The Logic of American Politics Choices are at the heart of American politics. Politics arises from the need to choose among alternatives when differences make it impossible for all people to get what they want. Thus choices breed conflict. Why? Conflicting interests. Conflicting interests. Conflicting values. Conflicting values. Conflicting ideas about how to allocate limited resources. Conflicting ideas about how to allocate limited resources.

The Logic of American Politics Politics is how people attempt to manage such conflict. What happens when politics fails? More formally, politics is the process through which individuals and groups reach agreement on a course of common or collective action – even as they continue to disagree on the goals that action is intended to achieve.

Collective Action Problems In democratic nations, which are generally large and complex in nature, every aspect of political choice presents a challenge. These may involve: Combining and ranking preferences. Combining and ranking preferences. Agreeing on a course of action. Agreeing on a course of action. Implementing and enforcing the collective choice. Implementing and enforcing the collective choice.

Collective Action Problems Two classes of challenges to efforts of a group to reach and implement agreements (collective action) are important to discuss: Coordination. Each member of the collectivity agrees on what it wants; each is prepared to contribute to the collective effort but must figure out how to coordinate his or her effort with those of others. Coordination. Each member of the collectivity agrees on what it wants; each is prepared to contribute to the collective effort but must figure out how to coordinate his or her effort with those of others. The Prisoner’s Dilemma. Arises whenever individuals decide that even though they support some collective undertaking, they are personally better off pursing an activity that rewards them individually while undermining the collective effort. The Prisoner’s Dilemma. Arises whenever individuals decide that even though they support some collective undertaking, they are personally better off pursing an activity that rewards them individually while undermining the collective effort.

Coordination Coordination problems increase with the size of the group. Examples: Quartet versus symphony orchestra. Quartet versus symphony orchestra. House versus Senate. House versus Senate.

The Prisoner’s Dilemma Every successful political exchange must tacitly solve the Prisoner’s Dilemma. Each side, to get something, must typically give up something of value in return. Exchanges occur because each side recognizes that it will be made better off. But each side also worries that its partner could renege on the agreement once the partner has gotten what it wants.

Prisoner’s Dilemma: What you Gain Your Choice CooperateDefect Cooperate Fairly good [+ 5] Good [+ 10] Defect Mediocre [0] Bad [ - 10]

What’s the Most Rational Thing to Do? Cooperate or Defect? If you know what the other person will do? If you don’t know what the other person will do?

The Prisoner’s Dilemma Unless each side can trust the other to abide by its commitments, they will not achieve a mutually profitable exchange. How is the dilemma solved? Make reneging and defection very expensive. Make reneging and defection very expensive. Create institutions that guarantee agreements are honored. Create institutions that guarantee agreements are honored.

Free Rider Problem Large groups must also contend with their members’ temptation to free ride – that is, to withhold their contribution to the group’s undertaking. Arises when citizens recognize that their small contribution to the collective enterprise will not affect its success or failure. What happens if many people react this way? Example: support for public television.

Free Rider Problem How does one get around free riding? Private inducements to perform those actions the collective effort requires if it is to succeed. Private inducements to perform those actions the collective effort requires if it is to succeed. Examples: direct benefits that come with membership; government can use force of law to induce participation or, more positively, a tax break. Examples: direct benefits that come with membership; government can use force of law to induce participation or, more positively, a tax break.

Tragedy of the Commons Another form of the Prisoner’s Dilemma is the Tragedy of the Commons. Community has a collective good that is in danger of being squandered unless members cooperate to preserve it. Common pasture and common practice of adding a cow here or there to increase own income. End result: eventually, overgrazing strips the pasture of its grass and the herdsmen go broke.

Collective Good The definition of a public good is such that “those who do not purchase or pay for any of the public or collective good cannot be excluded or kept from sharing in the consumption of the good.”

Tragedy of the Commons The trick to avoiding the dilemma lies in proper institutional design. The solution: link the individual’s personal interest to provision of the collective good. A decision to squander or conserve resources must affect personal wealth. Example of water: global shortage may lead to privatization. Example of water: global shortage may lead to privatization. Force: setting up regulations on use of a common resource and penalizing those who violate them.

The Costs of Collective Action Collective action offers participants benefits they cannot achieve on their own. One must weigh the potential benefits with the various costs. The key: design a system that will achieve the benefits of collective action while minimizing its costs. Costs: some may be material -- tax payments funding road construction or police salaries; overhead costs of enforcing agreements that accompany the judicial system or the IRS.