Public Policy

Lecture 1

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Discussion of Upcoming Assessments

Plan for today

Proper acquaintance

Discussion of your upcoming projects

Some highlights of Public policy - what is the scope

Requirements for the final grade – presentation, working with the literature, format of the final project paper

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Please Introduce yourself and your project

1. Your name
2. Where are you from, why are you in CUA (tell something interesting)
3. Your current and previous majors and specializations
4. Your professional interests, goals and experience (maybe international?)

1. Specific developing country and/or region you have chosen for the project
2. What is the problem of poverty in this region? How long ago did it start? Is it related to globalization?
3. How did you know about it? Do you have any publications handy?
4. Why do you think that this problem is important in general and for the economy in particular?
5. What economic levers (policy) do you intend to use (recommend) to solve this problem?
6. Which countries for comparison do you choose (economically or politically similar or located in the same region) - two or three - in which, in your opinion, this problem has already been solved?

Dr. Olga Uritskaya

MSc Economic Cybernetics, State University, St. Petersburg, Russia

PhD in Mathematical Economics, Polytechnic University, St. Petersburg, Russia

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25+ years of teaching experience (Russia, Latvia, Canada, USA)

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Areas of expertise: Economic Risk and System Stability Evaluation, Macroeconomic Systems Analysis, Decision Making and Game Theory, Operations Research,Data Mining, Nonlinear Econometrics

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5 books, multiple university lecture courses and peer-reviewed scientific papers on nonlinear behavior and risk evaluation of catastrophic events in complex economics systems.

Website: QuantitativeDynamics.org

I am merit reviewer of Public Policy proposals at Office of solar technologies and Office of Energy Efficiency and Renewable Energy,US Department of Energy

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Dr. Olga Uritskaya

Research Associate, CUA at NASA, GSFC

Adjunct Professor,

Economics and Physics, CUA

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Research work is focused on developing quantitative methods for risk evaluation of catastrophic events in complex systems.

Applications include:

• cross-disciplinary projects on environmental and socio-economic impacts of space weather (NASA, terrestrial systems),
• assessment and evaluation of dynamic instabilities in economic (DOE, deregulated energy markets) and financial systems (IMF, floating currency exchange rates),
• elaboration of recommendations for macroeconomic stability and sustainable growth in developing countries (CUA, Integral Economic Development program).

• Macroeconomics
• Public Policy
• Mathematical Economics
• Socio-economic impact of Space Weather

What is the Public Policy ? Definitions

• Dictionary: the principles, often unwritten, on which social laws are based.

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• Public policy refers to the laws, the actions of the government, the funding priorities and the regulations that reflect given positions, attitudes, cultural ideals or accepted rules.

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• “Public policy is whatever governments choose to do or not to do" (Thomas Dye, 1972)

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• “Public policy is an institutionalized proposal to solve a central problem, guided by a conception" (Antonio Lassance, 2020)

So, What is the Public Policy ?

In the United States, this concept refers not only to the result of policies, but more broadly to the decision-making and analysis of governmental decisions.

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Public Policy may refer to:

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Policymaking categories

There are two broad areas in the public policy:

• regulatory policy

refers to government controls and restrictions on certain activities or behaviors. Regulation concerns not only the rules of management, but also the concept of management.

• social welfare policy

refers to the responsibilities that the government and the society have to each other. It builds on the idea that a government has a responsibility to protect its citizens from harm.

According to the principle, a society can thrive only when it provides safeguards for those who face risks to their well-being.

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Domestic affairs or

Global governance?

Regulatory policy

Examples of regulation:

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• setting fair prices for goods and services
• granting licenses and franchises
• establishing safety standards for the workplace and transportation
• providing resources (such as hydroelectric power from federal dams)
• setting rates for using those resources
• monitoring and enforcing compliance with statutes relating to discrimination
• protecting the environment.

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Criticism of regulation

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• regulation costs are usually borne by consumers and workers, not the government

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• policy decisions often respond to political considerations rather than technical ones, which may mean hurting businesses for no good reason, or it may give certain businesses the opportunity to manipulate regulations so that they make more profit.

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• policy changing is time consuming

Deregulation

In US deregulation began in the 1970s and was based on the notion that regulation was suppressing economic competition. But actual results has been mixed:

Deregulation does seem to produce greater product innovation and more new company startups, but it also leads to the ruin of small companies and the emergence of monopolies

• The deregulation of the airline industry decreased fares as numerous small carriers went into operation, but then most quickly failed, leading to greater consolidation.
• In the telephone industry, the deregulation that came with the breakup of AT&T has created a rash of confusing rate charges and services that many people feel are just too complicated to follow.
• In California, the deregulation of investor-owned utilities contributed to rolling blackouts, higher prices, and serious financial problems for major power companies.

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Deregulation = free market = absence of protection for the customers

Social welfare policy

Issues:

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• Social Security uses the money paid by today's workers to cover the pensions received by today's elderly. Pensions shrink with time (inflation and quantity of the pensioners).
• Money is paid out of the pension program for disabled workers and for the survivors of deceased workers, they are not in proportion to the taxes (min cost-of-living is guaranteed). Social Security trust fund is running out of money.
• Americans are living longer, and healthcare costs continue to increase. Medical benefits for the poor are already by far the biggest drain on the national treasury of anything in the federal budget.

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Examples of social welfare:

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• Social Security policies in the United States introduced under the rubric of the New Deal 1933 -1935,
• Medicare provides basic health insurance and hospitalization coverage for people over the age of 65 and is paid for by payroll taxes on both employees and employers (enacted in 1965) .

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• Monetary policy.
• Fiscal policy.
• Supply-side policies.
• Microeconomic policies – tax, subsidies, price controls, housing market, regulation of monopolies.
• Labour market policies.
• Tariff/trade policies.

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Money

How much is enough?

Resources

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Economics

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Main types of economic policies.

How much do you think California spent annually on each homeless person before the covid epidemic?

1. 68 cents
2. $6.8
3. $68
4. $680
5. $6,800
6. $68,000

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Money

How much is enough?

Or not enough?

How much do you think California spends for each homeless person each year?

• 68 cents
• $6.8
• $68
• $680
• $6,800
• $68,000

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Goals, Methods, Directions

Different approaches to the Public Policy

• Harris School of Public Policy Studies (University of Chicago)- quantitative approach to Public policy analysis
• Heinz College (Carnegie Mellon University) - computational and empirical methods for policy evaluation
• John F. Kennedy School of Government (Harvard University) - political science and leadership
• School of Public and Environmental Policy (University of Indiana)- environmental sciences and the management of nonprofit organizations
• University of Illinois at Chicago - decision-making and cognitive constraints in the policy-making process
• University of Pennsylvania – globalization issues and philosophy of politics
• University of Oxford – Public Policy Economics
• University of New York – Economics of Public Policy

Here, in Catholic University, Public Policy course is the part of Integral Economic Development program

• Economic aspects of Public Policy in developing countries for poverty reduction

Course Scope - Social Security Programs for Developing Countries - Domestic and/or Global

• Other subject of interest is globalization – how it affects developing countries, economic growth and standards of living.

Course plan

• Lectures
• Seminars (discussions of your projects and related topics from lectures)

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• Presentation of project stages
• Seminars (discussions)
• Final presentation
• Final paper

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There is no official textbook for this course, however I would like to recommend:

• David Weimer and Aidan Vining. 2011. Policy Analysis. Edition Number 5. Longman

• Eugene Bardach. 2008 A Practical Guide for Policy Analysis. Third Edition. CQ Press

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• Deborah Stone. Policy Paradox: The Art of Political Decision Making. Any edition since 1997.

The presentation

• the nature of the policy problem selected and why the topic is important;
• the general context, including the macroeconomic background of the region, the social and political actors involved in the problem; historic and cultural scope of the problem
• Existing policy issues, as well as communication, coalition-building, and implementation problems associated with the policy
• Policy recommendations: possible policy alternatives, comparison with other countries and conclusions
• Please notice, that the final result of the course is a proposal paper, the presentation is not

Powerpoint presentation

~15 min, < 10 slides

Due Dec 1

Plan of the project (project paper)

• Abstract
• Introduction
• Macroeconomic background
• Historic and cultural context of the problem
• Existing policy
• Comparison with other countries
• Policy recommendations
• Conclusions
• Literature / references – Peer-reviewed journals

(Poverty & Public Policy)

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1. Region’ characteristics
2. Literature review
3. Macroeconomic analysis
4. Policy analysis
5. Model of reasoning

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Due

Dec 15 3:00 p.m.

Next time – your short presentation

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• Brief review of the country and region – most interesting facts
• Brief review of the problem – short history Historical, cultural, ethnical, religious, economic and political backgrounds of the problem
• What consequences of this problem you see for the society and economy (locally and globally)
• What kind of solution for the problem you expect to find (or what questions to answer)

Economic aspects of Public Policy in developing countries for poverty reduction