final Flashcards
A bill
draft law – a law in the making
the steps necessary for a bill to become law-the House
Introduced by a member or passed by Senate
Assigned to Committee, then subcommittee, or drafted there
Hearings
Mark up (writing)
Positive Report
Scheduled for debate by Rules Committee, “rule” assigned to limit debate and amendments
the steps necessary for a bill to become law-the Senate
Introduced by a member or passed by House
Assigned to Committee, then subcommittee, or drafted there
Hearings Mark up (writing) Positive Report Scheduled for debate by Majority Leader (in consultation with Minority Leader); no limit on debate or amendments (table in lecture 11)
A missed step, such as a negative vote by either house, means…
no law
pocket veto
occurs if Congress submits a bill for the President’s approval but goes out of session before the 10 days are up. A pocket veto cannot be overridden. Congress can avoid a pocket veto by staying in session as long as necessary to complete the 10 days.
discharge petition
If the committee and scheduling procedures fail to place the bill before Congress, a majority can bring it to the floor with a discharge petition followed by a vote to discharge. That rarely happens.
How Congress Spends Your Money
To spend your money Congress must do three things, which in our system requires three separate laws. So says Congressional procedure adopted by Congress, not the Constitution.
- Tax or Borrow
- Authorize government activity
- appropriate money year by year
- Another feature of the budget process concerns the role of the executive: Executive Budget Initiative
- Tax or borrow
Congress must first get the money needed to run the government. It does that by taxing or borrowing, by passing revenue or debt-ceiling bills.
- Authorize government activity
Congress must create administrative agencies and tell them what they can or must do. It does that by passing authorization bills - - bills that establish executive units, their programs, and their powers. (Conventionally, revenue and borrowing bills are classified as authorizations too.)
- appropriate money year by year
-Congress then must give money to the agencies and programs that it has authorized- by passing appropriations bills. Without money a program exists only on paper. (It is not uncommon for Congress to decide not to appropriate funds to authorized programs.) Appropriations are annual: they have to be renewed every year - - else the agencies and programs that they would have funded must shut down and furlough staff.
exception to money appropriation
- entitlements, or backdoor spending. The initial authorization law says that certain people are entitled to certain amounts of money (according to some formula) regardless of whether Congress has appropriated enough. Sometimes the law authorizes automatic increases no matter what the state of the budget is. Congress gives itself no choice but to appropriate the authorized money unless it changes or rescinds the original authorization law. It does not do that directly, case by case, but by allowing the treasury to borrow as need be. In all other areas, an agency or program would die a sudden death without its annual appropriation. Entitlements are classified as “non-discretionary spending” in the federal budget. Needless to say, they bear much of the responsibility for deficit spending.
- Examples of entitlements: Medicare, Social Security, VA Pensions, Pell Grants, and farm subsidies.
Executive Budget Initiative
-The Budget Act of 1921 requires executive budget initiative: each year the President must submit a single, comprehensive budget that says exactly how much will be spent and on what. Congress modifies this presidential baseline to make an overall decision on how much to tax and spend.
Prior to 1921, each department would ask for money, and Congress would decide piecemeal how much to spend. The current system makes it easier to assess the “big picture,” to know how much is spent overall.
The same act created the Budget Bureau, charged with consolidating the budget requests from executive departments into one comprehensive budget proposal.
-The Budget and Impoundment Control Act of 1974 came in response to President Nixon’s refusal to spend funds appropriated by Congress. It turned the Bureau of the Budget into the Office of Management and Budget, or OMB. Today the OMB is one of the most important executive agencies. It coordinates all executive-branch requests and submits the budget to Congress.
The Budget Process
-Executive budget initiative is one kind of centralization in the budget process. Since 1974 there has emerged a second kind, one involving Congress. Prescribed by the Budget and Impoundment Act of 1974, the mechanics of the budget process are as follows:
• Acting for the President, the OMB (Office of Management and Budget) prepares a comprehensive executive budget proposal in January.
• The Congressional Budget Office (CBO) prepares a report on the President’s proposal by Feb. 15. It questions the assumptions the President’s proposal makes about how fast the economy is projected to grow, how high unemployment is likely to be, how much revenue will be collected, etc. This office is made up of civil servants, supposedly nonpartisan professional economists.
If they wish, the various legislation-writing committees make reports on the aspects of the proposal pertaining to their jurisdictions by Feb. 25.
• The reports and proposals of these three groups are then submitted to the House and Senate Budget Committees. These committees must then report by April 1. They base their budget proposals on the President’s original proposal but always make some changes, large or small.
• The First Concurrent Budget Resolution in supposed to pass Congress by April 15th. This is not a bill, only a resolution that will never be submitted to the president for his signature. It is not a draft law but a guide for subsequent revenue, authorization, and appropriations bills.
• Throughout the summer, new bills – tax, authorizations, and appropriations - - are prepared in the various Congressional committees (e.g. agriculture, energy) pertaining to the agencies and programs under their jurisdiction. Each house has an Appropriations Committee, whose subcommittees correspond more or less to the substantive committees (e.g. Commerce, Education, Agriculture).
• In September comes the Second Concurrent Budget Resolution, reflecting the new laws generated by the bill-writing committees. Here the comprehensive budget is revised.
• Usually a reconciliation act is needed to revise the laws just passed so they conform to the new budget resolution. Such an act breaks the standard mold by addressing authorizations and appropriations and a multitude of committee jurisdictions all in one fell swoop, and it is treated as a single, must-vote, take-it-or-leave-it package, not subject to amendment or filibuster.
• Finally the fiscal year begins on October 1.
when the budget timeline breaks down
This is the nominal timeline of events. But it is rarely adhered to: delays occur. Rarely do both houses concur on budget resolutions. Rarely does Congress pass all required appropriations bills by October 1. If that deadline is not met and a final budget is not ready by October 1, Congress passes one or more continuing resolutions, constituting a temporary budget to keep the federal government running. Without them, the federal government, or part of it, shuts down.
Sometimes the schedule is followed closely enough but Congress underestimates needs. Then it must appropriate more money later in the year with supplemental and deficiencies acts.
Reagan and enhancing pres power through the budget
Although designed to curtail presidential power, the Congressional centralization mentioned earlier allowed President Ronald Reagan to enhance presidential power. In 1980, when R2 first came into office, instead of accepting the budget passed the previous year, he drafted a sweeping new budget and demanded that Congress pass it as a “reconciliation act.” In that way he acted rather like a prime minister in a parliamentary system, who annually demands a yes-or-no vote on a single, comprehensive “budget.” Later presidents emulated him. For example, President Obama’s controversial, 2,700-page health care bill was ultimately passed as a “reconciliation act.”
Aside: As I said, failure to appropriate enough money early enough prompts later Congressional action in the form of supplemental and deficiency bills to fill holes. This suggests that the budget numbers discussed in September do not mean all that much. Maybe politicians try to deceive us with low appropriations - - or maybe it is hard to guess how much money will be needed.
Congressional legislation obviously depends on…
- votes
- less obviously on procedural or agenda control
- Both reflect strategy, and strategy reflects congressmen’s goals.
- Apart from personal values, those goals are driven by the reelection incentive and by partisanship.
Votes
The former means that Congressmen want, above all, to hold onto their jobs. In Europe, members of parliament belong to disciplined parties that present platforms to the electorate, who vote mostly on the basis of party positions. In the US, parties are weaker, less disciplined, less committed to clear, comprehensive platforms. Therefore, getting reelected in the US requires pretty much that every Congressman watch out for himself. He must see himself as an agent of his constituency, as much as (maybe more than) his party. That leads him toward the following activities:
- Credit claiming
- position taking
- particularism
- universalism
credit claiming
A congressman wants his constituents to see him doing good things for them. So he tries to take credit for every good thing the government does for them. Among other things he is usually the first to announce any federal benefit for his district, such as a school-construction or transportation grant or a defense contract. The bureaucracy allows this in order to stay on his good side.
position taking
Each representative is one of 435 and often will not prevail in getting what his constituency wants. Even so he will try hard to show that he has at least fought for the “right” cause (or the “left” cause, if that’s what his constituents prefer). This involves voting for losing propositions, making public statements, etc.
particularism
Each representative tries to deliver locally targeted benefits of two sorts: Pork is money directly spent on separate, tangible projects in his district - roads, hospitals, levees, bridges, schools, and whatnot. Laws that authorize such projects are called pork-barrel legislation, especially when one wishes to deride them for inefficiency. Case work (or constituent service) involves acting as an intermediary to help constituents with the federal bureaucracy. A congressman’s staff might intervene with the post office, expedite the issuance of a passport, secure a veteran’s benefit, etc. Congressmen have local staff dedicated to this service. The bureaucracy is usually pretty responsive because Congress appropriates its budget. That may sound a bit shady, but it isn’t, or it need not be. A voteseeking congressman has an incentive to play ombudsman. Budget-seeking bureaucrats have an incentive to obey him with alacrity. It is surprising that not more citizens take advantage of this service.
universalism
This means that the shared incentive congressmen have to secure goodies for their own constituencies results in something for everyone. Congressmen scratch each other’s backs. In order to avoid fights over the benefits, everyone goes along with passing laws that are known to be fat with pork, hence inefficient. There is pork for all. For example, interstate highway funds bring roads to every state. Once in Honolulu I took special pleasure in driving down the Eisenhower Interstate Highway.
Beside the reelection incentive, congressmen are driven also by…
partisan and personal preferences. After all, congressmen are not just reelection machines but people who chose government as a calling. And they are not isolated individuals but team members, or partisans.
a key to understanding congressional behavior is to
…appreciate how the particular rules and institutions of Congress (its gears and levers) affect actors’ incentives and strategies.
Legislative Strategy
There are at least three possible kinds of voting:
- Sincere voting
- Strategic voting
- Cooperative voting
- Sincere voting
Here a congressman votes for his favorite option no matter what.
- Strategic voting
Here he may vote against an option he likes in order to accomplish something further or to avoid a greater evil: he looks ahead and bases his choice of how to vote on the consequences rather than the content of alternative actions.
- Cooperative voting
Here he makes a deal with others to trade votes, or logroll, and he sticks to the deal.
agenda-setting, or procedural manipulation: -
-deciding what the people think about?
Examples of Strategic vs. Sincere Voting and Agenda Control
(lecture 11-look in notes)
most of the executive branch is…
the bureaucracy – all the offices and civil servants who do most of the day-to-day work of regulating your behavior and providing you with services.
Constitutional Source of Executive Powers
Article II of the Constitution establishes the executive. It is remarkably short but for the lengthy statement about presidential election. The President is made Commander in Chief and given the power to enforce the law, appoint top subordinates and judges, negotiate treaties, receive foreign diplomats, commission officers, convene Congress, and veto legislation.
Article I of the Constitution establishes the Legislative branch. When making laws, this branch designs and finances the executive branch and delegates its own powers to that branch. Without such delegation, there would not be much of an executive branch.
Organization of the Executive Branch
Immediately below the President, the executive branch has 2 parts: the Executive Office of the President, and the Departments and Agencies.
Apart from these two parts there is the somewhat strange office of the Vice President, constitutionally a legislative office unless the Presidency becomes vacant. Historically, the VP did very little. He did not attend Cabinet meetings until the 1920s, under President Harding, and he was not treated as an executive officer at all until the 1950s, under President Eisenhower.
Executive Office of the President
This comprises people who work in or near the White House and have little or no legal authority but do have great proximity and access. They report directly to the president. Their role is advisory. They help the President do his job but have no operational authority: they cannot run the programs that provide you with services and regulate your lives.
The different components of the Executive Office of the President are the following:
- White House Staff
- Chief of Staff (runs the White House and helps the President run the Executive Office)
- Speech writers
- Counsel
- Legislative Liaison (helps the president coordinate relations with the legislative branch)
- Press Secretary, etc., etc.
Within the White House staff the top people are made “Counselors to the President.” Some of them sit in cabinet meetings, courtesy of the President. Some become more important than some cabinet members.
- The Rest of the Executive Office
- NSC (National Security Council), OMB (Office of Management and Budget), CEA (Council of Economic Advisors), The U.S. Trade Representative, etc., etc.
NSC (National Security Council)
The NSC helps the President coordinate the work of the State and Defense Departments and intelligence agencies.
OMB (Office of Management and Budget)
the OMB helps the President coordinate the budget requests of the various executive departments and prepare the comprehensive executive budget proposal. The head of the OMB is quite important, more important than the Secretary of Commerce, for example.
CEA (Council of Economic Advisors)
The CEA, despite its name, doesn’t really give the president advice on economic policy so much as measure and predict economic performance
The U.S. Trade Representative
the Trade Representative is also quite important. He negotiates trade agreements. Although an ambassador, he reports to the President, not the Secretary of State or Commerce.
Departments and Agencies
-executive departments
-independent executive agencies
-All these units have operational authority, established (and limited) by Congress.
The personnel, including the heads, of both the executive departments and of the independent executive agencies may be fired by the President.
-two other sets of executive bodies whose personnel may not be fired by the President: Independent Regulatory Commissions and Government Corporations.
executive departments
- (State, Defense, Treasury, etc.),-their heads make up the Cabinet.
- Usually the President adds the OMB Director, the White House Chief of Staff, and maybe others to the Cabinet.
independent executive agencies
Examples include the GSA (General Service Administration), EPA (Environmental Protection Agency), CIA (Central Intelligence Agency), FDA (Food and Drug Administration), NSF (National Science Foundation). The heads of these agencies are appointed by the president. These agencies are not in any executive department but are like executive departments, only narrower in scope. Their heads normally are not in the cabinet.
among the Independent Regulatory Commissions:
the Federal Reserve Board (Central Bank) and the SEC (Securities Exchange Commission). These are more politically independent by design than the departments and executive agencies.
Among Government Corporations is the US:
Postal Service (formerly a department) and the Federal Deposit Insurance Corporation. These are much like private corporations but are “owned” by Congress.
shift of influence/power
- Shift of Influence, cabinet → executive office
- In the 19th century cabinet officers were powerful people enjoying great proximity and access to the president. Until the 1930s, the President’s staff consisted of little more than a personal secretary. After WWII, Presidents expanded their staffs and relied less and less on the cabinet for advice. Now the President meets daily with staff, while some cabinet officers have a hard time ever seeing the President.
How can one explain this shift?
H1: Bigger government has meant a greater need for coordination among cabinet departments; the executive needs a small team to direct the vast government structure. For example, the OMB helps the president coordinate and consolidate the different department’s budgets in one comprehensive proposal. In managing relations with any given foreign country, the president relies on the NSC to help coordinate the various departments’ policies toward that country.
H2: Department heads (cabinet secretaries) are captured, by their clients and by civil service employees. For example, the Secretary of Defense speaks for the generals; the Secretary of Agriculture speaks for the farmers, etc. Therefore, the President cannot fully rely on cabinet secretaries to act on his agenda.
H3: Cabinet secretaries are bound by law - - by the authorizations that created and empowered their offices - - and by Congress’s power of the purse. They are not so easily controlled by the President because of their special dependence on Congress. By contrast, Executive Office staff do not have a special relationship with Congress; they are beholden to the President alone and are motivated to advance his goals.
It is hard to decide which of these three is the best explanation. They all have some validity. However, that the shift was gradual over a long period of time suggests that H1 provides the best explanation.
the president’s many jobs
• Chief of State
The president is in many ways like a king; he has ceremonial duties and is the figurehead embodying the state.
• Head of Government
The president is also like a prime minister in that he leads a government that administers acts of the legislature.
• Chief Executive
The president is like a corporate CEO too. He is the sole top executive: unlike a PM, he does not need to take a vote of the cabinet. In the US we often refer to the President, governors, and mayors as chief executives–a very American label–rather than heads of government.
• Commander-in-Chief
Though a civilian, the President is also like a general or flag officer. He commands all the armed forces, including state militias when in federal service.
• Party Leader
The President is like a Prime Minister in another way: he is the head of his party. But the President is weaker because he cannot always command a majority in Congress even if his party has a majority. In the US, parties are not so centralized or disciplined that the President can order party members to vote a particular way in the legislature.
• National Political Leader
The President leads the people and explains the government’s policies to them.
Now we turn to consider the balance of power between the executive and legislative branches.
Presidential Power and Congressional Checks-Army
-President’s Powers: Commander in Chief. The exact meaning of this is not clear in the Constitution, but it is understood, partly from British usage.
-Congress’s Checks:
Congress
• Raises forces,
• Regulates forces,
• Appropriates money to armed forces,
• Declares war.
Often Presidents have gone to war without really getting Congressional approval (e.g. Korea, Vietnam). In response Congress passed the War Powers Act (1973). Unless Congress has declared or otherwise authorized war, this requires that the President notify Congress within 48 hours of troop deployment overseas, and that after 60 days of troop deployment he either secure Congressional consent or bring the troops home. Absent consent, he has 30 days to bring them home. There are serious questions about the constitutionality of the War Powers Act. Both Bushes secured Congressional approval of their Middle East wars. Bush Sr. attacked Panama in 1990, and Clinton attacked Serbia in 1998, without Congressional authorization.
Presidential Power and Congressional Checks-foreign relations
-president’s powers:
Chief Diplomat
The president more or less runs the foreign relations of the country.
-congress’s checks:
Congress has legislative authority over commerce. Senate confirms diplomatic appointments and ratifies treaties.
It would be an exaggeration, but not too bad a one, to say that Congress mostly runs domestic affairs, “the inside stuff,” while the President mostly runs foreign affairs, “the outside stuff.” It would also not be wrong to say that most voters think that Republicans are more adept in managing foreign affairs while Democrats are more adept in managing domestic affairs. Some authors have used these two observations to explain voters’ preference historically for divided government in general and for a certain pattern of divided government in particular: since WWII, voters have often elected a Republican President and a Democratic Congress.
Two Types of International Agreements
- Treaty
2. Executive Agreements
- treaty
A treaty needs to be ratified by a 2/3 vote in the Senate and can be on any subject. It may even override state law. This last fact helps answer the question of why treaties require Senate approval and why they require such a high vote to pass. Those requirements are a safeguard against federal encroachment on states’ rights.
- Executive Agreements
Executive agreements are of two kinds: pure and congressional-executive. Unlike a treaty, neither one of these can violate state laws, and neither requires a 2/3 Senate majority.
pure
Pure: These are about issues within the President’s jurisdiction and, therefore, do not require a congressional vote. They are typically about things on which the President has to take quick action. An example is an armistice.
Congressional-Executive
These are about any issue within the federal government’s jurisdiction, so they are subject to ordinary Congressional law and require a congressional (majority) vote. An example is a trade agreement (to reduce tariffs, or whatnot).
How can you tell the difference between a treaty and a congressional-executive agreement? When do you call something a treaty or a congressional-executive agreement?
The Constitution, which mentions only treaties, does not say. Presidents have discretion in which route to take, depending on their needs. For example, in 1845, President Sam Houston wanted to rush Texas into the US. President John Tyler (who wanted to expand the US) found that he was short of the 2/3s Senate vote needed to ratify a treaty between the US and Texas. Instead, Tyler called the agreement between the US and Texas a law and got a simple majority in both the House and Senate to incorporate Texas into the Union. He invoked Congress’s power to admit new states.
Presidential Power and Congressional Checks-exec
President’s Power-Chief Executive
• Executes (enforces) the law
• May demand the opinion of his cabinet
• Appoints and fires executive branch employees, including cabinet members
Congress’s Checks and Balances
• Authorize programs
• Appropriates funds
• Confirms executive appointments
Oversight: Congress also monitors executive agencies’ performance.
Presidential Power and Congressional Checks-head of state
President’s Power-Head of State
• Pardons
• Commissions officers
Congress’s Checks and Balances
-no checks
• Confirms general and flag officers
Presidential Power and Congressional Checks-Legislative
President’s Power-legislative
• Convenes Congress (This is no big deal in modern times, since Congress stays in session for a long time.)
• Adjourns Congress if need be
• Recommends legislation (This too is no big deal.)
• Vetoes bills (This is a significant power.)
Apart from these formal powers the President has some more informal powers:
• Leads party (The President coordinates his party’s legislative moves.)
• Bargains with Capitol Hill (The President has considerable power to offer people inducements.)
• Bully (awesome sauce) pulpit (The President can use the salience of his office to capture the public’s ear on a particular issue.)
Congress's Checks and Balances • Legislates • Overrides vetoes • Must follow for leadership to work. • A pulpit too, but less bully.
Source of Presidential Power
Lowi, Ginsberg, Shepsle, and Ansolabehere argue that the US President is the world’s most powerful person. What, we may ask, is the source of that power?
H1: The President draws his power from the formal-legal structures of the US government.
H2: The President is responsible for the direction of the government and is not easily replaced, so most of us wish him well and follow his lead even if we did not vote for him.
H3: The President is the most salient policy coordinator. Potential coalition members face a coordination problem—they need the equivalent of a Santa Monica Pier where they can “meet.” The President is the equivalent of the Santa Monica Pier. There is no alternative to the President in terms of power and prominence: if circumstances make it desirable to follow someone’s lead, he becomes the focal leader. Also, thanks to this unique position, the President’s public pronouncements bind him to the commitments he makes. That makes his commitments especially credible.
H1 and H2 are somewhat plausible. But legal powers are less than real power, and there has to be a reason why it is the President who is held responsible for so much. H3 brings out the incentive we have to follow his lead.
enforcing or implementing policies
concerns how legislation translates into practice: –how, for example, the Department of Health and Human Services implements the Affordable Care Act. Earlier in the course we mentioned that the federal government (Congress) under the Articles of Confederation had this problem: it could not enforce its will.
problems with implementation-examples
A telling example of the problem of implementation is George Washington’s suggestion to Congress that cattle and grain be taken from the farmers in Long Island so that the British, who had just landed there, could not get them. Congress took his advice, but nothing happened: the farmers kept their cattle and grain.
A couple of other examples are Lincoln’s ordering General McClellan to attack Richmond, and his ordering General Meade to pursue Lee after Gettysburg. They failed to carry out Lincoln’s orders.
Similar examples involve Soviet leader Gorbachev’s initial efforts to reduce drinking and then to reform the economy in the USSR. His orders had scant effect.
-These examples are instances of the agency problem. How does someone, a principal, get someone else, an agent, to do something?
Political theory vs political science
Much of political theory is about how government should be organized to reach good decisions - - and what, for that matter, constitutes a good decision.
Much of political science, in contrast, is about what policies are made and how.
Our problem today is a third one: the problem of governance, or control - - the problem of how policies are enforced, or implemented, of how political decisions have effect.
How do you get bureaucrats to obey you?
This is not a trivial problem. Even Hobbes’s sovereign, the strongest guy around, cannot coerce everyone in society to obey him; physically it is not feasible. A bureaucracy big and strong enough to compel citizens to obey the law must itself be compelled to obey the law.
Principal-Agent Problem
- Principal: This is someone who wishes to delegate power to someone else to do something, to implement some policy. Examples include a king, an employer, Congress.
- Agent: This is someone who has been hired or charged by the principal to do something. Examples include lesser nobles, employees, the bureaucracy.
- How, having delegated power, can a principal control his agent to get the job done? It is not feasible to monitor the agent(s) all the time-PD:
- The agent can either work or shirk, either do the job or not. The principal can either monitor the agent’s behavior or not. For the principal, monitoring is costly: if you could monitor all your agents all the time, you could do most of this work yourself. His favorite outcome is for the agent to do the job without being monitored, while his least favored outcome is for the agent to shirk despite being monitored. If the principal knew for sure that the agent would shirk, he had rather not monitor. The agent’s preferences are obvious.
- No matter what the agent does, the principal is better off not monitoring. The principal will always play “don’t monitor.” The agent knows this. So he will always play “shirk.” Thus the outcome consists of the principal not monitoring and the agent shirking. Both suffer. Both would have fared better had they played “monitor” and “work.”
- The principal faces a choice of either delegating or not delegating power to an agent. In case the principal does delegate, the cost of doing so is that the principal must monitor the agent. If the principal does not delegate power, then the cost is that the principal must do the job himself. The principal’s problem is to minimize the cost while getting the job done.
how to tell if Congress is getting its way
- One way to tell whether Congress is getting its way is to look for compliance. One might read the law and look at bureaucrats’ actions. In theory this is possible but in practice it is very hard to do.
- to look for sanctions (Congressional punishment) as a measure of compliance. Presumably the greater the number of cases one observes of Congress punishing bureaucrats, the less bureaucratic compliance there is. But this logic is faulty.
So it may seem we have no good way to evaluate whether the federal bureaucracy is doing a good job, whether Congress is getting its will enforced. This general problem is aggravated when there are multiple agents. Then it is hard to distinguish between shirkers and workers even when looking.
observational equivalence
It is like driving into a town and looking to see if the jail is empty in order to evaluate the job the sheriff is doing. An empty jail is consistent with the sheriff’s doing a great job but also with the sheriff’s doing a terrible job. An empty jail represents the problem of observational equivalence. Two very different causes, a very good and a very bad sheriff (or very good monitoring and very bad monitoring), may give rise to the same outcome—an empty jail. Remember empty jails.
Agency Problem in a Complex Organization-examples
How to observe each agent’s contribution to a collective product? Example: Tug of war. How can you tell if an individual is actually pulling or just huffing and puffing? Example: (True story) A group of Chinese villagers had to pull barges up the Yangtse River with ropes. Because it is hard to tell how hard someone is pulling, everyone shirked a bit. As a result, all made less income than they could have. They solved this problem by hiring another villager to whip them. He whipped them all whenever the team fell short of some specified rate. (Oh, and the whipper himself was a reliable agent because he enjoyed the work. Or maybe the wives monitored him, but they enjoyed the show.)
Another example: Suppose you have hired two people to row you to Catalina (each person manning one of the two oars). When you tell them that the boat is moving too slowly, each one blames the other and says that he is rowing slowly in order to adjust to the other’s slowness (to keep the boat from going in circles). How do you know who is telling the truth? How can you isolate any one individual’s contribution?
Yet another example: Suppose, in a community’s school system, that test scores are declining. The teachers, administrators, and parents blame each other. It is hard to tell who is at fault.
Congress’s Problem
Congress needs to delegate power to the bureaucracy, and it needs to control the bureaucracy. The problem is that Congress is one principal monitoring a great number of agents.
Congress has some weapons it can use: appropriations and authorizations. Congress can cut funding to bureaucrats or rescind their legal authority.
The difficulty is that, with so many agents, Congress has a hard time telling where to aim its weapons. Because it is hard to isolate individual agents’ contributions, Congress cannot use rewards and punishments effectively.
Congress’s task is the oversight of the federal bureaucracy. Oversight refers to legislative efforts to ensure bureaucratic compliance with legislative goals.
Has Congress lost control?
There are two conventional impressions: One is that Congress has delegated much of its authority. The other is that Congress has neglected its oversight obligation because there is a paucity of oversight hearings and sanctions (an “empty jail”).
The first impression is correct; the second is not. The second impression is based on faulty logic: the paucity of hearings and sanctions may or may not be the result of Congressional neglect.
Remember that empty jail.
Congress’s Solution: checks & balances inside the bureaucracy
One can distinguish between two kinds of oversight:
- Police Patrol
- Fire Alarm
- police patrol
Akin to real police patrols, this kind of oversight involves Congress’s selecting and examining a sample of bureaucratic actions to look for violations. The aim, of course, is to punish and deter violations. Police patrol oversight is comparatively centralized, active, and direct. Congress itself initiates and carries out the monitoring of the bureaucracy.
- fire alarm
Akin to real fire alarms, this kind of oversight involves Congress’s establishing rules and procedures for citizens to complain about the bureaucracy - - to ring an alarm - - and seek redress. It is less centralized, less active, and less direct than police patrol. Like the LAFD, Congress does not send out its hook-and-ladder looking for fires but waits for an alarm to ring. And except in the worst cases, alarms are usually answered by superior bureaucrats or courts or congressional staff, rarely by congressmen themselves (the book is wrong here).
Fire-alarm oversight gives the power to monitor bureaucrats’ behavior to those who have the greatest incentive to monitor it: the victims (potential and actual) of bureaucratic noncompliance.
As a matter of regular practice, Congress uses fire alarms quite a lot.
Private citizens, corporations, labor unions, and interest groups become the monitors of bureaucratic agencies; they sound the fire alarms to which other bureaucratic agencies, courts, or Congress itself responds.
It is important to note, however, that Congress cannot rely on the fire alarm model to monitor all government agencies. Some, such as the CIA, operate abroad and do not appear to have any domestic clients that can complain about their noncompliance - - except, of course, that we might all complain about the overall product.
Advantages of fire alarms
Police patrols:
- congress samples bureaucratic behavior
- congress wastes time monitoring actions that turns out to be nonviolations
- congressmen get little credit
- misses many violations
Fire Alarms:
- Citizens and interest groups complain
- There is no waste because olny violations are brought to notice
- Congressmen jump at the chance to claim credit for helping citizens
- rarely misses violations (although there are some “false alarms”
Fire Alarm Examples-five ways in which Congress uses fire alarms
- Subgovernments
- Organization of Interests
- Casework
- Administrative Procedures Act of 1946
- Direct Congressional Intervention
- Subgovernments
These are also known as iron triangles. A bureaucratic agency, its relevant congressional committee staff, and its clientele (industry, interest group, beneficiaries) work together. Example: The lumber industry, the Department of Agriculture, and the House Agriculture Subcommittee on Forestry. They are in constant touch and keep each other informed of problems.
- Organization of Interests
Congress initiates the effort to organize an otherwise unorganized group of people or industries so that they can monitor the activities of the bureaucracy regulating them. Congress creates an agency to act as the organizing force. Remember that individuals who share some interest nevertheless face a prisoners’ - dilemma problem in organizing. Congress can help them solve that PD. For example, the Departments of Agriculture and Commerce were created to help farmers and business interests to organize
- Casework
This, as I mentioned earlier, refers to Congressmen’s willingness to help their constituents deal with government bureaucracies. The system is set up so that everyone has an incentive to act in the right way: bureaucrats would like to please Congress (on which they depend for funding), Congressmen would like to take credit for having helped their constituents, and voters would like to have their problems solved. Example: A veteran who doesn’t receive his VA pension check calls his Congressman’s local office and the check arrives two days later.
- Administrative Procedures Act of 1946
This and later acts give citizens legal standing before agencies and courts to complain about noncompliance by government agencies. Congress has made it fairly easy for citizens or industries that are hurt by some bureaucrat’s action to complain to higher bureaucrats or to courts. Also Congress has required that before implementing new regulations or policies a federal agency must announce its intention to do so; this gives individuals and groups that expect to be affected by the new policy time to take action. With these acts, Congress has made various parts of government (courts etc.) more accessible to citizens’ fire alarms.
- Direct Congressional Intervention
Finally, Congress has made itself accessible to citizens’ complaints by reserving the power to intervene directly and limit or rescind an agency’s jurisdiction.
Example: The Federal Trade Commission (FTC) tried to regulate breakfast-cereal commercials aired during Saturday morning cartoon shows, and also funeral parlors. The industries involved complained to Congress. Congress agreed with the industries and said that the FTC could not regulate them.
Another example: A federal agency was trying to help West Virginia attract new businesses. Other states complained that businesses located in their territories were being drawn away, contrary to the authorizing law. Congress agreed and closed the agency.
completely hands-off style
The discussion so far, centering around fire alarms, involves Congress’s delegation of power and its decentralized style of management. One can also identify a completely hands-off style. One can imagine situations in which it would suit Congress to delegate power completely. In one such situation Congress wants to shift responsibility for tough choices (e.g. on abortion, to the courts). In another, only a complete delegation of power can ensure that Congress will resist the temptation to engage in “bad” behavior. Knowing itself to be vulnerable to political pressure, Congress may decide to take itself out of decision processes that are best isolated from politics
- ex: US money supply
- That explains the independent status of the Federal Reserve Board (the US central bank). Congress has taken its hands completely off the Fed.
completely hands-off style: example
A good example is the management of the US money supply. Remember that under the Articles of Confederation irresponsible management of individual states’ currencies (printing excessive amounts) ultimately ruined their systems of credit and with it their exchange economies. It is not hard to see how political pressures may tempt Congress to manipulate money in a similar way, with terrible consequences.
The Federal Reserve Board Controls the Money Supply
The Fed’s task of controlling the money supply is critical to the economy’s health. Too much or too little money leads to trouble.
Too much money in the system==>inflation (too many dollars chasing too few goods raises prices).
Too little money in the system==>unemployment (too few dollars chasing too many goods lead companies to produce less).
The Fed uses three tools to control the money supply:
- Lends money to banks and sets interest rates.
- Set Reserve Ratio
- Conducts Open Market Operations
- Lends money to banks and sets interest rates.
If it lowers interest rates or lends to banks liberally, then money becomes cheaper and is easier to find, and banks lend more to borrowers at lower rates. This generally spurs the economy but may create inflation. The reverse occurs if the Fed raises rates or cuts back on loans to banks.
- Sets Reserve Ratio
The Fed can change the amount of money it requires banks to keep in cash reserves. Increasing this “reserve ratio” reduces the amount of money the banks can lend. That reduces the money supply in the system.
- Conducts Open Market Operations
The Fed sells and buys government bonds. It thereby acts as a money sponge. By selling new bonds the Fed reduces the money supply (the purchasers give the Fed cash in exchange for a piece of paper; the Fed puts the cash in its vault). The Fed will sometimes wring itself out by buying back government bonds to increase the money supply. This they have been doing since 2008, calling it “quantitative easing.”
4th branch of gov:
the citizenry-voters, parties, interest groups-we affect policy
Political Participation by Citizens
There are many ways to participate in politics. One is to vote.
Voting has four steps:
- Register to vote. This once was a hard step; now it is easy
- Go to the polls. - Select a subject on which to vote – a particular office or ballot issue.
- Make a choice - - pick one of the options - - and record it as instructed.
other forms of Political Participation by Citizens
- Write to an office holder.
- Speak publicly.
- Persuade others privately.
- Join associations (Sierra Club, trade organizations, labor unions, NRA, etc.).
- Contribute money to political campaigns. (In most other countries campaigns are publicly financed.)
- Join a party.
- Work for a party or candidate organization.
- Run for office.
Why Vote?
It is hard to explain who votes and how, because it is hard to explain why people vote at all. The paradox of not voting is that one vote makes no difference, so why bother to vote? - - but people do. In other words, because a single vote never makes a difference, it is hard to explain voting the same way we explain other acts. The act of voting is a puzzle.
When is it rational to vote?
Compare this question with another: When is it rational to gamble? Is it rational to carry an umbrella?
PD-lecture 15-3 diff
- Judged as usual, it is rational for a voter to vote for f if and only if the probability that his vote will make a difference (p) multiplied by how much he stands to gain by f’s victory equals or exceeds the cost of voting, that is,
p x value of f ≥ cost of voting
Suppose that
cost of voting = $1
value to voter of having f win = $90,000
and
p = 1/100,000.
With these values, which are unrealistically favorable to the voter’s calculus, the inequality is not satisfied. It is irrational to vote.
At least according to this way of assessing the rationality of actions, voting seems irrational. If anything, the probability that a person’s vote will be pivotal or decisive is generally much smaller than 1/100,000.
[Hitler was elected head of the Nazi Party by one vote, and President Andrew Johnson escaped impeachment conviction by one vote. But the voters were a small group, not a public electorate.]
the cost of voting is…
the opportunity cost - - the value of forgone benefits, such as sleeping, watching T.V., or (best of all) studying political science.
Why, then, do people vote?
Several hypotheses have been entertained: - -
- the election is close
- voters make a mistake
- voting is not very costly
- links voting to acts of charity-we are inclined to be altruistic
- A better hypothesis is that we are disinclined to free ride
- voting=duty
- investment and consumption value
- the election is close
One is that the election is close. But not all elections are close, and even unusually close ones are never decided by one vote. It is true that a voter is more likely to be pivotal in a close election than in a not-so-close election. But that is like saying a tall man is more likely than a short man to bump his head on the moon.
- voters make a mistake
Another hypothesis is that voters make a mistake, believing their act is efficacious although it really is not—a belief encouraged by turnout propaganda. But it is hard to believe that such a simple error would be so popular for so long.
- voting is not very costly
A third hypothesis is that voting is not very costly - - or most people don’t find it so. True, we are a lazy species: we prize leisure. But for that very reason we forego little of value by voting. Besides, we are also a restless and gregarious species: sitting still in solitude often fails to please, however inconsequential the alternatives. Even so, this hypothesis identifies no positive payoff from voting. At most it helps explain voting.
- links voting to acts of charity-we are inclined to be altruistic
A fourth hypothesis links voting to acts of charity: we are inclined to be altruistic, to help our fellows, to benefit society and not merely ourselves. True, but an inconsequential act benefits no one
- disinclined to free ride
- A better hypothesis is that we are disinclined to free ride: we feel it is unfair to profit from the efforts of others (those who share our political ideals) without pitching in ourselves.
- voting=duty
popular hypothesis is that citizens see voting as their duty and receive some gratification from doing their duty. This hypothesis modifies the above rationality condition to say that voting is rational if and only if p x value of winning + D ≥ cost, where D is the gratification that comes from doing one’s duty.
- investment and consumption value
A more general hypothesis is that the act of voting has not only investment value but also consumption value. This means that the act of voting is important not only because it helps the voter further his aims but also because he finds the act itself gratifying. Most of our acts have both investment and consumption value. Think of eating, sleeping, drinking, and procreating. A good job has both kinds of value: it supports you but you enjoy it too. Still this is a weak hypothesis because D is hard to measure, because it is hard to predict in advance whether D is great enough to spur voting, and because it is hard to tell thereby why some people vote while others do not.
Why would anyone spend time learning about the issues and candidates
In response, one might focus on the consumption value of learning about politics. This would suggest that newspaper editors who are interested in increasing their publications’ readership often have to resort to including juicy tidbits of gossip in articles about politics. Sensationalism is often the only way of getting people to read. It gives the act of reading more consumption value.
Similar Problems of Participation
One can also ask, Why contribute money? or Why join a party or interest group?
In both of these problems the logic is similar. You have to choose between participating and not participating (contributing money, joining a group, etc.). Your payoff from participating depends on what everyone else does. You are playing a game with everyone else who shares your interests. The game is a multi-player PD.
(see diagram-lecture 15)
This prisoner’s dilemma is in essence the septic-tank problem discussed in Hunk One.
The problem is that your action makes no difference. No matter what “everyone else” does – participate or not – you are always better off not participating, not contributing to the shared goal. Your incentive is to free-ride on the effort of others.
why it’s hard to explain participation
- participation is not like most other behavior: a single vote makes no difference. Yet a good explanation cannot imply that no one votes.
- participation varies: some people participate and others do not. A good explanation of participation has to be able to account for variation: it cannot imply that everyone votes.
Who Votes?
Let us now take a different tack. Instead of asking why, let us ask who and examine the variation just remarked.
Initial studies of voting found that the rich were more likely to vote. Why would richer people vote more? Plausible reasons:
• They are more knowledgeable about politics.
• They have more time.
• They are more likely to have personal acquaintances running for office.
• They stand to lose more if election outcomes go against their preferences.
• They are less likely than poor people to feel alienated from the system.
• They feel more efficacious, or potent.
All these reasons were suggested, at one time or another, by students. Note that none mentions cost. Maybe that is as it should be: voting is not that costly. People like going out and doing things. They are generally not so lazy that the act of voting proves too cumbersome. Instead, people are gregarious and restless. They also like to talk about having done things. This observation, in combination with the fact that people do have a sense of civic duty, is a nice potential explanation.
who votes? according to political scientists
At first, political scientists thought along similar lines. They found that wealth or income was positively correlated with voting, thought that wealth drove (caused) voting, and considered some of the explanations just surveyed.
They were wrong. It was education, not income, that was the real cause of voting.
It turned out that the observed correlation between income and voting was spurious. Educated people voted more, and educated people tended to be richer. Therefore, income appeared to drive voting. In reality, when people with the same educational level were compared, their differences in income had scant effect on their likelihood of voting. Differences in income mattered only to the extent that they were associated with differences in education. But when people with the same income were compared, their likelihood of voting increased with their level of education.
Another example of spurious correlation:
When people wear warmer clothes, they catch more colds. Of course, it is not the wearing of warm clothes that’s causing the colds but of a third factor, cold weather, that’s causing both the colds and the wearing of warm clothes. Again, the more frequently people hire lawyers the more likely they are to go to prison. Are criminal suspects better off not hiring lawyers?
spurious correlation
A spurious correlation arises when two factors (such as income and voting) appear to be causally related but in fact are both caused by a third factor (education).
Although income may in some sense be an acceptable “explanation” – that is, knowing a persons’ income would help us to predict his likelihood of voting – education is a superior explanation. Education explains more of the variance we observe; if nothing else, it explains the differences we observe in the likelihood of voting among people who have the same income.
Thanks to various studies, we now know the following things about who is more likely to vote:
- Income. We already discussed this. Greater income is associated with greater likelihood of
voting. BUT: the correlation is spurious, or noncausal. - Education. More educated people vote more than less educated people. Someone who has
completed grade school is about 8 percent more likely to vote someone who has not.
Someone who has completed high school is about 22 percent more like to vote than someone who has not. The difference in the likelihood of voting for a college graduate and someone with a graduate degree is not so great. - Age. The likelihood of voting is highest for people around 40 to 50 years old. It declines
on both sides of this peak: the very young and the very old are the least likely to vote. - Sex. When it comes to voting, men and women are similar until they reach 65 or so. After that, men are less likely to vote. Maybe men are less healthy - less mobile and more senile.
- Marriage. Married people are more likely to vote than single people.
- Mobility. The more mobile the person, the less likely he is to vote. This makes sense:
someone who moves knows less than others about local office holders and issues and the
jurisdiction in which he lives and must register, and every time he moves he cancels his
previous registration. - At first blush, race appears to have an effect on voting, but when one controls for such
other factors as education, its effect vanishes. A person’s race does not affect how likely he is
to vote. - Employment in the Public Sector. This makes quite a difference for voting. Public
employees are much more likely to vote than others, (83 vs. 65 percent). Maybe they know
more about public issues. Maybe they have a bigger stake in electoral outcomes. Or maybe
they more often get time off to vote.
Key points to remember:
: turnout (voting) is boosted by education, marriage, public
employment, and age, whereas race and income are spuriously correlated with voting.
