This chapter explains basic concepts used by the executive branch and Congress in requesting and allocating federal budget resources for national security. It provides a context for mandatory and discretionary budgeting and also defines some basic budget terms, such as “budget authority” and “outlays.” The chapter briefly explains the budgeting process, first within the executive branch (e.g., the White House and Departments of Defense and State) and then within the Congress, both the House of Representatives and the Senate. In addition, the chapter highlights some of the trade-offs that the executive branch and Congress must make in allocating federal budget resources to national security.
This article examines estimates of the damages of climate change in order to guide policies on greenhouse gases. It narrates three reason why climate damages are hard to measure: mitigation costs must begin immediately whereas many climate damages will occur in the distant future, we have little experience with climate change. Human beings did live through one ice age but recorded history has largely occurred in a period (the last 20,000 years) when climate has not changed, and the bulk of damages may be to non-market sectors, especially the ecosystem. The article also explains the significant advances over the original studies of damages that were brought by the recent analyses of the impact of climate change. Furthermore, this article states that although warming clearly does impose damages in some locations, there will also be substantial benefits.
David Harrison, Andrew Foss, Per Klevnas, and Daniel Radov
Economic instruments have played a major role in policies and proposals to address climate change in many countries and regions, with the European Union Emissions Trading Scheme (EU ETS) the most prominent example. This article considers the use of economic instruments to address climate change, including lessons from previous experience as well as a list of the key design elements. It focuses on the cap-and-trade approach and complementary credit-based programs because they have been most prominent in existing policies and proposals. It begins with an overview of the conceptual similarities and differences between cap-and-trade programs and carbon taxes. It then summarizes experiences with emissions trading and taxes that provide lessons on how the programs work in practice. Furthermore, it describes key policy issues that arise in designing a GHG cap-and-program, many of which apply to carbon taxes as well.
This chapter analyses the institutional, political, and economic determinants of the main dimensions of economic policy in contemporary Spain in the hands of domestic policy-makers: fiscal and regulatory policies. It describes its effects on redistribution, and analyses its variation across the ideological leanings of governments and across time, paying special attention to how the Spanish economy has coped with the Great Recession. The last sections advance an explanation for the main features of Spanish economic policy-making by analysing the supply-side (institutional) and demand-side (political-economy) constraints in which it operates, and suggests possible implications for how it will evolve in the near future.
Chris Carrigan and Cary Coglianese
This chapter discusses George Stigler’s “The Theory of Economic Regulation,” a stinging analysis of regulation from a political economy perspective. Published in 1971, Stigler’s paper challenged the idea that regulation is designed and operated primarily for the benefit of business, rather than solely to advance the overall public interest by correcting market failures. By offering a serious take on regulatory capture, “The Theory of Economic Regulation” changed the way economists analyze government regulation while exerting tremendous influence on a variety of disciplines such as public policy. Stigler’s chapter also sparked extensive research on business–government relations across a wide range of industries, from airlines and mining to banking and manufacturing.
J. J. Woo and Richard Higgott
In the aftermath of the global financial crisis (GFC), there has been much soul-searching in economics and those areas of the policy sciences that concern themselves with the study of finance and the economy. The purpose of this chapter is to look at international political economy (IPE) and (global) public policy (GPP) as areas of inquiry undergoing processes of transition in the wake of the GFC and ask how they might demonstrate greater policy influence. We suggest that there are important lessons that IPE can learn from GPP, in order to ensure its relevance in global policy debates. We highlight the relevance of three public policy tools that may benefit IPE: policy complexity; behavioural approaches; and strategic foresight.
This article studies the non-politics of monetary policy. It argues that there is an urgent need for a macro political economy, which is stuck with an impoverished understanding of political institutions. It looks at the life cycle of social choice, public choice, and political economy and presents an assessment of the contribution of macro political economy. The last two sections are concerned with total special interest gridlock and the poverty of international institutions.
Norrin M. Ripsman, Rosella Cappella Zielinski, and Kaija E. Schilde
National security has typically been studied as analytically separate and distinct from political economy. This chapter explores the economic underpinnings of national security and, in particular, the key economic dimensions of contemporary U.S. security policy dilemmas. It offers an overview of the problems associated with security policy in an era of austerity, the economic dimensions of power transition from unipolarity to multipolarity, and the security consequences of U.S. and global populist discontent. We then move beyond the traditional relationship between economics and security to discuss several important contemporary political economy dilemmas that face the U.S. security establishment. Finally, it discusses the economic dimensions of counterterrorism, counterproliferation strategies, and war mobilization.
Dustin Garrick and Jesper Svensson
This chapter examines the political economy of water markets. It traces key debates about water markets, and examines how and why these debates have evolved since the 1970s. Experiments with water markets over the past 40 years have generated lessons about the politics, institutional design and performance of reforms to water rights and river basin governance institutions. Drawing on contrasting experiences with water markets in Australia, the US and China, the analysis demonstrates that strong government and community roles are necessary for water markets to respond effectively and equitably to water scarcity.
The intergeneration aspect of climate change makes economic reasoning about it more problematic than one might think. Economic reasoning looks for ways more efficiently to allocate or exchange property rights and — sometimes by determining those rights — to resolve collective action dilemmas. This article reveals that economic theory cannot provide a useful way to think about climate change. Climate change is not a collective action problem because individuals today have no common interest that would lead them to believe they have more to gain overall as individuals from the restrictions placed on others than they have to lose from accepting those restrictions themselves. It argues that an efficient allocation of resources, since it depends on exhausting the benefits of trade among the people who can trade (the living), cannot in any direct way respond to the needs or interests of future generations. An efficient policy therefore cannot be a sustainable policy.
This article elaborates on the understanding of New York's public fiscal position. The choice of counting rules has a dramatic impact on the understanding of the size of government and interpretation of its fiscal health. The decentralized character of New York's public fiscal position derives from impacts of policy practices in four key areas: social welfare, education, public employee pensions, and collective bargaining. Debt is both a useful and respected tool of public finance and a dangerous temptation for elected officials. New York is among the most heavily indebted states in the nation. With respect to Medicaid and public assistance, the City of New York and virtually all counties favor increased state financing. The area with the greatest potential for change is the heavy decentralization of public fiscal matters in New York.
Kelley Lee and Julia Smith
The influence of for-profit businesses in collective action across countries to protect and promote population health dates from the first International Sanitary Conferences of the nineteenth century. The restructuring of the world economy since the late twentieth century and the growth of large transnational corporations have led the business sector to become a key feature of global health politics. The business sector has subsequently moved from being a commercial producer of health-related goods and services, contractor, and charitable donor, to being a major shaper of, and even participant in, global health policymaking bodies. This chapter discusses three sites where this has occurred: collective action to regulate health-harming industries, activities to provide for public interest needs, and participation in decision-making within global health institutions. These changing forms of engagement by the business sector have elicited scholarly and policy debate regarding the appropriate relationship between public and private interests in global health.
This chapter examines Politics, Economics and the Public: Policy Outcomes in the American States, a book by Thomas Dye that highlights the importance of politics in determining public policy. First published in 1966, Dye focuses on the extent to which political variables influenced policy in comparison with economic ones, in particular economic development. He analyzes the impact of economic development and political variables, such as party and electoral systems on five policy areas: education, welfare, highways, tax/revenue policy, and public regulatory policy. Dye also measures economic development in terms of urbanization, industrialization, wealth, and education. This chapter discusses the importance of Dye’s book in the political science literature on public policy by setting it in the context of the state of political science of the period.
Richard B. Norgaard
Climate change is a special case of the generic problem of sustainable development, but the valuation methods and analytics of economics were never adjusted for sustainable development. This article describes the early history of cost-benefit analysis and the concerns of economists with distributional issues, who benefits and who loses from a project, in the development happened in economic valuation of damages. It presents a brief history of climate economic analysis and some of the early controversies. It also describes a general equilibrium framework, which helps see the shortcomings of partial equilibrium analysis for a global problem such as climate change. Nevertheless, while critically important insights are highlighted through general equilibrium analysis, ‘answers’ to basic questions do not become clearer. In addition, the article covers the Stern Review and its impact on the economics of climate change. Furthermore, this article summarizes the key points while adding an institutional dimension to the arguments.