1. “Understanding Public Policy: A Primer” Daniel Griswold Cato University Annapolis, MD July 25, 2011
The Cato Institute Washington, D.C.

2. What is Public Policy?
Complex and dynamic process – not what you learned in high school civics class
What government does to and for society
Collective action through the government

3. Public Policies May: Regulate behavior Extract taxes
Distribute benefits
Organize bureaucracy
Make war
Some combination of the above

4. Why Care about Public Policy?
“Just because you do not take an interest in politics doesn't mean politics won't take an interest in you.” – Pericles
“The natural progress of things is for liberty to yield, and government to gain ground." – Thomas Jefferson
“I am interested in politics so that one day I will not have to be interested in politics.” – Ayn Rand

5. Analyzing Public Policy: a Framework
Michael Munger, Duke University, Analyzing Policy: Choices, Conflicts, and Practices (2000)
Problem formulation
Selection of criteria
Comparison of alternatives
Political and organizational constraints
Implementation and evaluation

6. Problem Formulation

7. Selection of Criteria What do we want to accomplish?
Test of a good policy
Moral argument
Incentives
Constitutionality

8. Comparison of Alternatives
Munger’s Criteria/Alternatives Matrix (CAM)

9. Political and Organizational Constraints
“The Overton Window”
Unthinkable
Radical
Acceptable
Sensible
Popular
Policy

10. Implementation and Evaluation
Did the program accomplish its goals?
Good intentions not enough.
Market outcomes, political acceptance, expert analysis
Charles Murray’s Losing Ground; immigration enforcement; government K-12 school spending

11. Education Spending vs. Performance

12. How is Public Policy Made?
“Laws are like sausages, it is better not to see them being made.”
– attributed to Otto von Bismarck

13. The Players: Politicians Think tanks Bureaucrats Interest groups
Voters
Politicians
Think tanks
Capitol hill
Bureaucrats
The courts
Researchers
Consultants
Academics
Interest groups
Administration
The media
Experts
Public opinion
Civil servants

14. Models of Policy Analysis
Institutionalism
Process model
Rationalist model: policy as maximum social gain
Incrementalism: policy as variations on the past
Group theory: policy as a group equilibrium
Elite theory: policy as elite preference
Public choice theory

15. Public Choice Theory “Politics without romance”
Public officials as self-interested actors
Rent seeking
Concentrated benefits, diffused costs

16. Arrow’s Impossibility Theorem
A rational individual who prefers Pepsi over Coke, and Coke over Dr. Pepper, will prefer Pepsi over Dr. Pepper.
Arrow showed there is no “fair” voting method for constructing social preferences from arbitrary individual preferences.
Society may not be a “rational chooser”

17. A ‘Fair’ Voting System
Each voter can have any set of rational preferences. This requirement is called “universal admissibility.”
If every voter prefers choice A to choice B, then the group prefers A to B. This is sometimes called the “unanimity” condition.
If every voter prefers A to B, then any change in preferences that does not affect this relationship must not affect the group preference for A over B.
There are no dictators.

18. Public Preferences: Trade Policy with China
Voter
Group
Unilateral Free Trade
Trade Agreement
Trade
War
Blues 1 2 3
Reds
Whites
Note: Rank order of preferences for each group

19. The Outcome: Collective Irrationality
Unilateral Free Trade > Trade Agreement
Trade Agreement > Trade War
Trade War > Unilateral Free Trade
Endless Loop! No transitive preferences.

20. What You Can Do Vote, or not Fund think tanks
Write letters to your congressmen
Blogging/social media
Take a career in ideas
Write op-eds and letters to the editor
Encourage other people to become engaged

21. Q&A & Discussion … www.cato.org www.freetrade.org dgriswold@cato.org
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