The Policy-Making Process

Chapter 17P. 468-490

Serve corporate interests◦ Marxist theory

Manage conflicts among groups◦ Pluralist theory

Sustain the bureaucracy◦ Weber

EXAMPLES◦ Oil companies

Got government to restrict imports—no longer Preferential tax treatment—been reduced

considerably Government allowed them to drill anywhere—now

restrictions offshore◦ Railroads

Regulation reduced their profitability◦ Autos

Once no controls—now many◦ Airlines

In the past regulations helped increase their profitability

No more◦ Electric utilities

Policies had no appreciable effect

Arguments on How Policies are Made

Two stages1. Placing an issue on the

political agenda2. Deciding what to do about

the issue

Policy Making

Issues that people believe require governmental action

Steadily expands as a result of1. Historical crises2. Interest group activity3. Competition for votes4. Operation of key institutions

◦ Courts◦ Bureaucracy◦ Mass media

Political Agenda

Setting the AgendaWhat is Legitimate for Government to do?Scope of Government ActionAction by the States

Political agenda◦ Issues that people believe require government action

Most important decision that affects policy making ◦ WHAT to make policy about

Current political agenda includes ◦ Taxes (Not till 16th Amendment 1913)◦ Energy (Not an issue till 1930s)◦ Welfare (Cities and towns should handle this)◦ Civil rights (Matter of private choice)

Shared beliefs determine what is legitimate for the government to do

Setting the Agenda

September 11, 2011, known ever after as 9/11, had a powerful effect on the agenda of American politics. This photo was taken one year after the disaster.

Political AGENDA

Comedians Jon Stewart (right) and Stephen Colbert (left) sing on the Washington Mall October 30, 2010

Rally to Restore Sanity and/or Fear

E.E. SchattschneiderThe Semisovereign People

1960

“He who decides what politics is about runs the country.”

1. Shared political beliefs◦ If poverty is caused by individual failure and not social

forces then no need for government involvement

2. Custom and tradition◦ People accept what’s been done but are◦ Leery of new proposals

3. Impact of events◦ Alter people’s sense of proper role of government

Wars—most rapid growth Depressions—unemployed, elderly, poor Mining (or other) disasters—safety requirements Hijackings—greater security measures

4. Changes in elites thinking

Forces that Determine Legitimacy

Government always gets larger◦ People generally believe that government should

continue to do what it is doing now◦ Changes in attitudes and events tend to increase

government activities Government growth cannot be attributed to

one political party “Big government”

◦ Sustained by expanded beliefs about legitimacy◦ Both Democrats and Republicans created bigness

Scope of Government Action

Gerald Ford—Slogan in Election of 1976◦ Government big enough to give everything was

also big enough to take away everything you have

◦ Thought he was criticizing Democrats HOWEVER Nixon

◦ Imposed peace time wage and price controls◦ Proposed guaranteed annual income for every

family Eisenhower

◦ Sent federal troops to Arkansas Reagan

◦ Federal payments to farmers grew to six times larger than in 1970s

Expansion of government is a result of a ◦ NONPARTISAN process

Bigness

Widespread public demand◦ Auto safety standards 1966◦ Occupational Safety and Health Act 1970

Passed at a time when industrial deaths had been dropping for twenty years

◦ Programs to combat poverty passed at a time when Number of persons below the poverty line was

declining◦ Affirmative action programs were introduced at a

time when Minorities were already making rapid progress

Government Can Enlarge Without any Crisis

Behavior of Groups◦ Corporations◦ Unions◦ Urban minorities

Workings of Institutions◦ Courts◦ Bureaucracy◦ The Senate

Opinions of Political Elites◦ Mass Media◦ Elite attitudes and government actions

Action of States

Reasons whyGovernment Adds Issues to the Agenda

Behavior of Groups◦May react to a sense of relative

deprivation◦Corporations

Organized interests May work quietly behind the scenes

◦Unions Federal safety laws governing factories

◦Urban minorities Black riots in cities in mid-1960s

Groups

Alexis de Tocqueville

Relative deprivation◦Citizens are most restless when

they’ve started to become better off

Influence of Institutions◦ Courts

Make decisions that force action by other branches Act as a tripwire setting off a chain reaction of events Alters the political agenda

1954 Brown Preferred vehicle for advocates of unpopular causes

Roe 1973

◦ Bureaucracy—source of policy proposals and innovation Professionalization of reform, Daniel Patrick Moynihan

LBJ’s Great Society Federal aid to education, manpower development, Medicare, Medicaid,

War on Poverty All developed, designed and advocated by government officials,

bureaucrats and political allies

◦ The Senate Chief among the political allies An incubator of new policies Source for political change rather than What Founders intended—a balance wheel designed to moderate

change Source of presidential candidates with new ideas

Institutions

Opinions of Political Elites◦ Media

Help place matters on the political agenda Publicize matters placed there by others May stimulate congressional interest or May merely report on what Congress decides to

pursue◦ Elite attitudes and government actions

More volatile and interdependent Change more quickly than popular attitudes

Media

Actions by the States National policy is increasingly being made by

actions of state governments◦ Congress passes and adopts ideas pioneered by the states

“Do Not Call” law to reduce calls from salespeople after states had taken the lead on this

Attorneys General of states may sue a business firm and settle the suit with an agreement that binds the industry throughout the country◦ 1998 tobacco agreement between cigarette companies

and some states◦ Companies raised prices◦ Agreed to pay states > $240 billion for states to use as they wished

States

Making a DecisionCostBenefit

Politics is a process of settling disputes over ◦Costs and Benefits of the new policy

Who benefits/pays and Who ought to benefit/pay

People prefer government programs that provide substantial benefits to them at low cost

What are the Costs and Benefits of a Particular Policy

Burden people believe they must bear if a policy is to be enacted

Money or not Taxes Foreign policy initiative that may lead to war

Widely distributed cost◦ Spread over many, most or all citizens

Income tax Social Security tax High rate of crime

Narrowly concentrated cost◦ Limited to a small number of citizens or

Some identifiable, organized group Expenditures by a factory to reduce pollution Government regulations on doctors, hospitals Restrictions on free speech to a dissident political group

Cost

Satisfaction people believe they will enjoy if a policy is adopted◦ Monetary or nonmonetary

Payments Subsidies Contracts

◦ Foreign policy Enhanced security of the nation Protection of a valued ally Vindication of some important principle

Human rights

Widely distributed benefit◦ Spread over many, most or all citizens

Clean air National security low crime rate

Narrowly concentrated benefit◦ Limited to a small number of citizens

Subsidies to farmers or merchant ship companies Enlarged freedom to speak and protest afforded a dissident group Protection against competition given to and industry because of favorable

government regulation

Benefit

Highway safety was always a problem, but it became a national issue after policy advocates, such as Mothers Against Drunk Driving (MADD)

emphasized it.

Policy Advocates

1. Perception of costs◦ Example—Auto emission controls

Paid by manufacturer or Passed on to consumer in higher prices

◦ Political conflict will depend on who the consumer thinks will pay for the change

2. Whether it is legitimate for the group to benefit

◦ Aid to women with dependent children Noncontroversial—widows and orphans Controversial—recipients thought to be sexually loose

women who had not married◦ Is beneficiary deserving?

Two Aspects of Costs and Benefits

Kinds of PoliticsFour Kinds of Coalitions

Majoritarian PoliticsInterest Groups PoliticsClient PoliticsEntrepreneurial Politics

1. Majoritarian politics◦Policy in which almost everybody benefits

and pays2. Interest group politics

◦Policy in which one small group benefits and another small group pays

3. Client politics◦Policy in which one small group benefits

and almost everybody pays4. Entrepreneurial politics

◦Policy in which almost everybody benefits and a small group pays the cost

Kinds of Politics (Coalitions)

A Way of Classifying and Explaining the Politics of Different Policy Issues

Large number of people bear cost and benefit◦ Distributed benefits, distributed costs

Social Security benefits Military Defense protecting the nation against attack Government sponsored research for cures for cancer

Not dominated by pulling and hauling of rival interest groups

No incentive to join a group when you will benefit anyway◦ Free-rider problem

May be controversial but controversy is over ◦ Cost or ideology NOT rival groups

Everyone wanted to reduce drug use◦ Controversy over whether death penalty for drug

traffickers

Majoritarian Politics

Small identifiable group will get benefit Small equally identifiable group will bear cost Concentrated benefits, concentrated costs FOUGHT by Organized Interest Groups are powerful when

regulatory policies confer benefits on one organized group and costs on another equally organized group

Examples◦ Labor-Business

1935 labor unions sought government protection for their rights; business firms were in opposition

1988 bill gave labor 60 day notice before plant closings Labor unions benefitted Business firms paid cost

◦ Television broadcasters and cable companies Who may send what kind of signals to which homes

◦ Banks and insurance companies Struggle between over the right to sell insurance

◦ American Nazi Party wanting to march through Jewish neighborhoods carrying swastikas

Interest Group Politics

Small identifiable groups benefits◦ Group receiving the benefits organized and worked to get

the legislation Everyone pays the cost

◦ Most are usually unaware of costs and/or are indifferent to them because per capita they are small

Concentrated benefits, distributed costs Examples

◦ Farmers benefit from price supports Consumer pays but not aware of how much higher the grocery bill is National regulation of milk industry, sugar production,

merchant shipping◦ Cities/Localities benefit from a dam, harbor, improved

navigation Pork-barrel projects

Client Politics

Pork-barrel legislation◦ Gives tangible benefits to constituents

in several districts or states in the hope of winning their votes in return

Client politics◦ Small group benefits◦ Everyone pays

Logrolling/Reciprocity◦ Process in which a majority coalition is

formed by a Legislator supporting a proposal favored

by another in return for support of his/hers Trading votes attracts other members of

Congress

Pork-barrel LegislationLogrolling

Society as a whole benefits Small identifiable group pays substantial

costs Distributed benefits, concentrated costs Relies on entrepreneurs to galvanize public

opinion and mobilize congressional support Examples

◦ Consumer and environmental protection statutes passed Clean Air Act 1970 Toxic Substance Control Act 1976

◦ Brady Handgun Violence Prevention 1994 Background checks before purchase a gun

◦ Auto Safety

Entrepreneurial Politics

Activists in or out of government who pull together a political majority on behalf of unorganized interests

Work on behalf of an unorganized or indifferent majority◦ Ralph Nader

Consumer advocate Best known example

Policy Entrepreneurs

Can occur when large numbers become disgruntled◦ Price of oil goes up◦ Smog creating burning eyes◦ Toxic hazardous waste forced

people to leave homes Love Canal, New York 1977 Times Beach, Missouri 1980

◦ Superfund program 1980 Result of pressure in the wake of

these disasters Authorized EPA to identify and

clean up sites that posed imminent danger

> 30,000 toxic waste sites

Entrepreneurial Politics

Entrepreneurial politics more common and more visible because

1. Enlarged political role of the media2. Decentralization of Congress3. Change in the attitudes of many citizens

Entrepreneurial Politics

The Case of Business Regulation

Majoritarian PoliticsInterest Group PoliticsClient PoliticsEntrepreneurial Politics

Economic power will dominate political power because

1. Money to buy influence2. Politicians and businessmen similar class

and backgrounds thus similar beliefs on public policy

3. Elected officials must defer to preferences of business to keep economy growing

Karl Marx’s view◦ The state was nothing more than the executive

committee of the propertied class

Relationship between Wealth and Power One View

Politics is a threat to the very existence of a market economy and the values of ◦ Economic growth◦ Private property◦ Personal freedom

1. Politicians to get votes will side with the non-business majority

2. Heads of large corporations will be portrayed as a sinister elite who can be blamed for war, inflation, unemployment, pollution

3. Corporations worry they will be taxed excessively to pay for social programs

4. Belief that universities tend to inculcate antibusiness values in their students

Relationship between Wealth and Power Another View

Widespread bank failures in the 1930s helped pave the way for laws regulating and insuring financial institutions.

Majoritarian Politics

Antitrust movement◦ Result of broadly based criticism of business

monopolies◦ Anti-trust feeling was strong but unfocused◦ During the reform era, politicians and business

leaders committed to a strong antitrust policy however

◦ Laws were vague and no agency was created to enforce it so it passed easily

Sherman Anti-Trust Act 1890◦ Vague with no specific enforcement agency

Federal Trade Commission Act 1914 Clayton Anti-Trust Act 1914

Majoritarian Politics

Antitrust Movement Vague laws lie dormant unless enforced Enforcement is determined primarily by the

ideology and personal convictions of the current presidential administration

Teddy Roosevelt 1904 (enforcement)◦ Hired five lawyers to prosecute about seven cases

per year Franklin Roosevelt 1938 (enforcement)

◦ Appointed Thurmond Arnold Head up the Antitrust Division of the Justice

Department Vigorous lawyer filed about 50 cases/year

Majoritarian Politics

Antitrust movement◦ Not interest group politics because laws don’t

divide society into permanent and identifiable blocs of people for or against RATHER

◦ Enforcement is driven by the administration in power

◦ Ronald Reagan 1983-84 Break up AT&T Not worth it to break up IBM

◦ Bill Clinton 1998 Suit against Microsoft

Majoritarian Politics

Interest Group Politics

Labor Management

Sought government protection

Wagner Act (NLRB) 1935◦ Right to organize◦ Bargain collectively◦ Hear complaints of unfair

labor practices

Sought to reverse gains of labor

Taft-Hartley Act 1947◦ Made closed shops and

secondary strikes illegal◦ Authorized president to

obtain a court order to block for up to 80 days any strike that imperiled “national health and safety”

Struggle highly publicized Winners/losers determined by the partisan

composition of Congress◦ Republicans and southern Democrats— pro business◦ Democrats— pro labor

Public opinion determined by◦ 1930s Depression◦ 1950s Labor racketeering

1959 Landrum-Griffin Act To prevent corruption in unions Changed way in which organizing drives were carried out Prohibited certain strikes and picketing

Interest Group PoliticsLabor/Management

In spite of laws struggle continued NLRB adjudicated countless disputes

◦Five members/Five year terms Presidents sought to tilt membership in one direction or another

Democrats—Labor Republicans—Business

Interest Group PoliticsLabor/Management

Similar pattern of interest group behavior to labor/management struggle

Labor wanted strict bill with tough standards Business wanted more flexible bill OSHA 1970 (Labor won)

◦ Single administrator inside Labor Department OSHA decisions often appealed in the courts Safe limits for exposure to chemicals Inspects tens of thousands workplaces Carter OSHA Head sympathetic to labor Reagan OSHA Head sympathetic to business

Interest Group PoliticsOccupational Safety and Health

When a policy confers a benefit on one group at the expense of many other people

“Agency capture” ◦ Is likely when benefits are focused and costs are

dispersed◦ The agency created serves the client

1935 dairy farmers declining prices◦ AAA authorized Department of Agriculture to

Regulate the milk industry Consumers end up paying more for milk however Consumers have little incentive to organize

Similar system with sugar◦ Protect Louisiana producers from Brazil and the

Philippines Farm subsidies are a result of history and politics Thought to be a deserving client Struggle relies on “insider politics”

Client Politics

Devastating flood, tornado, earthquake, hurricane

Community and victims deemed deserving of help

Not their fault However, built homes in areas known to be

at high risk for floods or hurricanes They receive client benefits

Client Politics

Different form of client politics uses◦ Regulations instead of money to help groups

Radio broadcasters wanted FCC to bring order and stability BUT

FCC started to review mergers and extracted concessions from the companies◦ Agency had so much freedom that it became a

burden to the client

Client Politics

Policy entrepreneurs ◦ Dramatize an issue◦ Galvanize public opinion◦ Mobilize congressional support◦ In government

Senator Outspoken bureaucrat

◦ Outside government Private person Muckraker Scientist Journalist

Entrepreneurial Politics

Inside government Dr. Harvey Wiley

◦ Department of Agriculture—chemist◦ Actively campaigned for Pure Food and Drug

Act 1906 Senator Estes Kefauver

◦ Held hearings that built support for 1962 drug laws

Senator Edmund Muskie◦ Called attention to need for air and water

pollution control legislation in 1972 Senator Abraham Ribicoff and Senator Warren Magnuson

◦ Approached by Nader on the issue of auto safety Unsafe at Any Speed

Entrepreneurial Politics

Crisis or scandal help the policy entrepreneur focus attention on the problem

Upton Sinclair—The Jungle◦ Meat Inspection Act 1906

Stock market collapse 1929 developed support for the ◦ Securities and Exchange Act 1934

Oil spill 1969 in Santa Barbara, California◦ Water Quality Improvement Act 1970

Entrepreneurial Politics

Upton Sinclair’s book The Jungle shocked readers with its description of conditions in the meat packing industry and helped bring about the

Meat Inspection Act of 1906

Entrepreneurial Politics

Policy Entrepreneurs face risk of “Agency capture”

FDA◦ Fallen victim during much of its history to capture◦ Cozy relationship with drug companies

EPA◦ Environmentalists concerned during Reagan years

that the agency was unduly sympathetic to polluters

Entrepreneurial Politics

Reasons why consumer and environmental agencies are not as vulnerable to capture

1. Enforce laws with specific standards2. Regulate many industries and so no one unified

group3. Very existence strengthens the hand of public

interest4. Lobbies can call on allies in the media who will

attack the agencies thought to have a probusiness bias

5. Easier for groups to use federal courts to put pressure on regulatory agencies

Agency CaptureConsumer and Environment

Perceptions, Beliefs, Interests and Values

Political ConflictDeregulation

Decisive forces in political conflict1. Perceptions

◦ Costs/benefits

2. Beliefs◦ Where a person’s interests lie

3. Values ◦ Conceptions of what is good for the country

Policies

Struggle to make one definition of the costs and benefits of a proposal prevail over others

Struggle to alter perceptions and beliefs Arguments

◦ Here and now argument What happens here and now is more important than

the future A natural advantage

◦ Cost argument People react more sharply to what they will lose if a

policy if adopted than to what they may gain

Political Conflict

Airline fares◦ Deregulated in 1980s◦ Once set by the Civil Aeronautics Board◦ Today are set by the market

Long distance telephone service◦ Provided by AT&T monopoly ◦ Prices set by Federal Communications Commission◦ Today several long-distance carriers

Prices influenced by the competitive market MCI, Sprint, Verizon, AT&T

Trucking companies◦ Prices set by Interstate Commerce Commission◦ 1996 ICC was abolished

Deregulation

Deregulation

Key political leaders acted on new beliefs◦ President Ford 1974

Ordered all regulatory agencies to assess the inflationary impact of their decisions

◦ President Carter 1978 Directed agencies to consider

alternative ways of achieving the goals of regulation

◦ President Reagan 1981 Created the Task Force on Regulatory

Relief Instructed agencies not to issue a

regulation if the OMB judged its potential benefits to society did not outweigh its costs

Power of Ideas Changed

Deregulation Deregulation

◦ Challenge to iron triangles and client politics◦ Based on the idea that governmental regulation

was bad in industries that could be competitive◦ Opposed by many groups◦ Controversial in two ways1. World becomes more complicated when relying

on the market2. Some people who favor deregulating prices

oppose deregulating process

Process regulation or social regulation

Rules governing commercial activities designed to improve◦Consumer◦Worker or◦Environmental conditions

Process Regulation

Interest Grouppolitics

Majoritarian politics

Entrepreneurial politics

Client politics

Widely distributed Narrowly concentrated

Costs

Benefits

Widely distributed

Narrowly concentrated

Theory of Politics