These are my personal, rough notes for the class: ADL 721: Policy Development. They are based on the textbook: Policy Choices and Public Action by Charles F. Bonser and published by Prentice-Hall.

What Does Government Do?

• Government is an official agent that acts on behalf of the public.
• It is a powerful social institution.
• The government is based on a set of relationships between members of the community and those who are authorized to act on behalf of the community through the rules that govern the community.
• Governments are empowered to make authoritative decisions for the public.
• Governments are constituted to enhance public welfare.
• Government is to make fundamental decisions and to make them effectively.
• Government promotes the public interest and creates conditions of public good.
• Government must implement their policies.
• Government's basic function is to govern or steer the public ship by making authoritative collective choices.
• Government's basic function is to provide for the production of public goods and the elimination of threats to public welfare.

• A series of actions taken by the government as it carries out its functions and to the intentions behind those actions.
• Stages
• Pre-policy development - define problem or issue
• Policy adoption - laws, executive orders and/or regulations as a result of debate
• Policy implementation - instruments that enforce policy
• Policy evaluation - assesses the creation and implementation of policy
• A framework for making policy choices
• Establish the Context - define the issue and related issues
• Formulate the Problem - what is the history, depth and breath of problem
• Specify Project Objectives - what will/can be accomplished
• Explore Alternative Solutions to the Problem - what are other possible solutions
• Set the Policy - follow proper course of action
• Develop an Implementation Plan - make policy operational
• Monitor and Evaluate - determine whether policy accomplished goals
• Recycle the Process - return to policy development/enhancement after evaluation

• Is a powerful policy tool of the government
• The way that government changes the behavior of businesses
• Government regulates where without its intervention, where if something was done it would not be in the best interest of society
• Iron Law - states that any regulatory action created both winners and losers within that regulated industry and that sector of the economy
• Comparative advantage - how a regulation alters costs compared to the cost of the other companies in the industry rather than how a regulation alters cost in absolute terms
• Problems resulting in regulations
• Monopoly
• Natural - a single company due to scale economics can produce more and lower cost
• Artificial - a single company that is able to keep other companies from entering into competition with it
• Externalities - when one's activity confers an unintended and uncompensated effect on another
• Inadequate information - government gives public assurance, information and protection from those who may provide inadequate information on their products, services, or abilities
• Common regulatory issues
• Monopoly
• Cost-of-service rate making - sets rates for the regulated monopoly
• Averch-Johnson effect - When the allowed rate of return is greater that the cost of borrowing, the monopoly will invest, thereby increasing the rate base which then will increase the profit
• Standard Setting
• Most common approach to govern behavior
• Generally set through lengthy processes of adversarial negotiation and appeal
• Concerns
• Standard can be aimed directly at the problem or at some substitute
• Degree of specificity
• Should standard be a design or performance standard
• Should standard be proactive, i.e., not currently able to be met
• Government rarely has the knowledge needed to set standards
• Nearly half of all standards are set by the private sector
• Five types of organizations that set standards
• Trade associations
• Professional societies
• General membership
• Consortia
• Third-part certifiers

• Benefits vs. ability to pay
• Benefit - Only those who benefit from the tax pay for the tax. The more they need the more that they pay. I.e., gasoline tax
• Ability to pay - Pay tax based on your ability. Those who have a greater ability pay more than those who have a lesser ability
• Horizontal and vertical equity
• Horizontal - Concerned with the relative taxes that are paid by people with the same capacity to pay
• Relative treatment of equals
• Vertical - Concerned with the relative taxes that are paid by people with different capacities to pay
• Relative treatment of unequals
• Progressive, proportional, or regressive
• Types of taxes
• Personal income tax
• Largest single source of revenue for the federal government
• Corporate income tax
• Same income is possibly taxed twice
• Sales and excise tax
• Tax on actual consumption
• Value-added tax
• Tax on actual consumption. Not used in the United States. Tax added at each stage of production
• Property tax
• Levied not on flow of money but on accumulation of wealth or stocks of wealth.
• Real property - land and improvements
• Personal property - Everything that can be owned except for real property
• Other
• User charges, license fees, state-run monopoly revenues, utility revenues, state lotteries
• Intergovernmental grants and mandates
• Intergovernmental grants
• Spillover of governmental activities
• Redress the fiscal imbalance among units of government
• Categorical grants - Provide assistance for a particular purpose
• Block grants - Finance activities in broad function areas
• General revenue sharing - provided funds based on formula (72 - 80's)
• Mandates - a constitutional provision, statue, administrative regulation, or judicial ruling that places an expenditure requirement on a government.
• Tax reform
• Flat tax - A single tax rate applied to all households and companies
• Consumption tax - replace corporate income tax with a percentage tax

• The Government's Role in the Contemporary Economy
• Laissez-faire: minimal involvement in the economy
• In modern economy, government needs to intervene to keep economy running smooth
• Allocation Function
• Public/social good: those goods that one individual cannot exclude others from enjoying
• Clean air
• Merit good: Some benefit directly while others indirectly
• Public education
• Public monopoly: Prevents private monopoly of essential good and to control pricing
• Highway system
• Distribution Function
• Government is the only entity to distribute income in society
• Welfare and entitlements
• Done through regional transfers
• Stabilization and Economic Growth Function
• Fiscal policy
• Taxes and expenditures
• Monetary policy
• Interest rates and changes in the money supply
• The Structure and Measurement of the Economy
• National income accounts
• Gross Domestic Product (GDP)
• Most comprehensive measure of national output
• Measure of the value of all goods and services produced annually
• Measured in dollars per unit of time
• Should equal GDI
• Gross Domestic Income (GDI)
• Wages and salaries, interest income, rental income, corp. profits, unincorp. Business income, depreciation, and other
• Should equal GDP
• Measuring the Long-Term Growth of the Economy
• Productivity is the amount of output per labor-hour worked in the economy
• Productivity = output per labor-hour
• Productivity is calculated by dividing real dollar GDP during a particular period by the number of labor-hours worded in the same period
• Labor-force hours is available is determined by taking the size of the labor force and multiplying that number by the average number of hours worked per year per employee
• Not all worker are available due to:
• Between jobs - frictional unemployed
• No skills - structurally unemployed
• The economic policy actions of the government are designed to achieve the following:
• Improve the long term growth and performance of our economy
• Long term growth is determined by its full employment potential GDP
• Increase the labor force
• Immigration
• Work past 65
• Larger families
• Increase productivity
• Increase investment in technology to product more output per hour
• Education
• Reduce the short term economic fluctuations and instability
• Maintain price stability
• Decrease the budget deficit
• Industrial Policy
• Direct role of government in the influencing the development of specific industries
• Through tax incentives, direct incentives, direct assistance, research support, or other subsidies
• Short-term economic stabilization
• Fiscal Policy
• Government can stimulate demand by cutting taxes or increasing its own spending.
• Monetary Policy
• Federal government's management of money and debt
• Designed to change the level of interest rates and the amount of money in circulation in the economy
• Controlled by the Federal Reserve System
• Federal Reserve Policy Issues
• Members may not be removed over policy disagreements, they are virtually independent in their policy actions
• Most powerful organization in the US economic policy-making system
• Maintaining Price Stability
• Price inflation can be measured by:
• CPI - Consumer Price Index - measures the price of a fixed market basket of goods and services in seven major categories purchased by consumers
• WPI - Wholesale Price Index - measures average changes in selling prices charged by wholesalers to their retail customers
• PPI - Producers Price Index - measures average changes in selling prices received by domestic produces of goods
• Price inflation can occur in an economy for several reasons
• Actual GDP can crowd potential GDP
• External shocks
• Nations currency value
• Wage - price spiral
• International Economic Policy
• Forms of Protectionism
• Tariffs - taxes imposed on goods that enter a domestic economy from a foreign country
• Quotas - placing of limits on the amount of goods importers can bring into the country
• Regulatory barriers - protect the health and safety of the importing country
• Subsidies - offer government subsidies to the home producer
• Currency exchange controls - restrict the access of foreign money to buy foreign goods
• Arguments for government control
• Decrease nation's trade deficit / may actual make the economy worse
• Decrease unemployment / jobs saved would only be short term then jobs lost
• Increase industrialization / employment has declined but production has increased
• To force other countries to play fair / fair trade is the same as protectionism and more harm than good will result
• Cost of protectionism
• Tariffs and quotes cost US about 13 billion annually
• Low income families affected more
• Serves the goals of specific interest groups at the expense of the nation as a whole
• Institutions in the international trading environment
• International Monetary Fund (IMF) - Aid countries to cover their trade deficits so that the country does not need to take drastic measures
• World Bank - Makes long term loads to nations for the purpose of economic development projects
• Countries must meet following criteria:
• Sound macroeconomics policies
• Measures promoting microeconomic efficiency
• Liberal trade
• Social investment
• Group of Seven (G-7) - Organization composed of the heads of the seven major industrialized countries who meet to coordinate their economic policies
• World Trade Organization (formerly GATT) - organization to create and defend an open trading system
• Regional Trading Organizations
• European Community (EU) - Set up to bring political and economic stability to Western Europe
• European Free Trade Area (EFTA) - Dying alternative to the EU
• No UE or NAFTA counterparts in Asia-Pacific Region
• North America Free Trade Agreement (NAFTA) - North Americas answer to EU
• Currency Exchange Instability
• Bretton Woods Agreement - fixed exchange rate based on gold
• Ended with Nixon in the 70's
• European Monetary System (EMS) - similar to the Bretton Woods Agreement for the EC
• American dollar is the benchmark for other currency values
• Some argue for a fixed standard which would improve stability

• Absolute poverty
• If family spent 1/3 of its cash on food
• Adjusted for inflation and household size
• Relative poverty
• No absolute definition of poverty
• Indexed by well being of everyone in society
• Who is poor
• Absolute numbers show whites
• Very young or very old
• Background and education
• Welfare
• Aid to Families with Dependent Children (AFDC) - meet cash needs of those women w/o husbands with children
• Unemployment Insurance (UI) - Cash to unemployed workers and is typically limited to toto 26 weeks
• Old Age Survivors Disability Insurance (OASDI) - a.k.a. Social Security - originally for income insecurity of older people
• System of legal entitlements comprised of civic claims on the public treasury mandated in public law
• Future Directions
• Minimal intervention involving laissez-faire policies
• National income maintenance policy - a minimum cash income would be guaranteed
• Includes the two above but also include services for those people
• Full-blown national welfare state
• Acts
• Family Support Act of 1988
• Designed to encourage responsibility in forming families and in having and bringing up children
• Family and Medical Leave Act of 1993
• Regulatory measure designed to require all employers with 50 or more workers to guarantee unpaid leave to employees burdened by illness or family illness
• 1993 Earned Income Tax Credit
• Originally passed in 1975 as a means of providing dollar-for-dollar reductions in payroll taxes owed by people with little income
• The heart of the poverty and welfare issues involves fundamental questions about equity. Government has the power and the instruments through which to distribute and redistribute the wealth and income generated by society. The Questions is not whether improvements in equity can be made, but whether adjustments ought to be made.

• Large numbers of people lack basic health care coverage and cannot get insurance under any circumstances
• Many people, who are currently covered by health insurance but change jobs, risk losing coverage if insurance procedures suggest pre-existent conditions
• Even fully insured persons, who are unlucky enough to encounter unusual health problems, can face financial ruin as insurance limits are reached and the price of attempting to pay for uninsured care exceeds personal income and assets.
• Uneven health care coverage
• Problem is that several health goals simultaneously interact.
• Access to health care services
• The quality of care
• Cost of care
• The health care sector is a huge agglomeration of many different professions, providers, insurers and regulators interacting in complicated ways
• Not a result of planed outcome of public policy making
• The organized interest consists of the providers, payers, and consumers of health care.
• Health care providers are largely unorganized by large bureaucracies, although patterns are changing
• U.S. health care is organized on a medical model in which doctors preside over the structures and decisions mage about care
• The U.S. is notable for its lack of government planning and management of health care delivery
• Options
• Tinker with the present system
• Regulate the current system
• Catastrophic Health Insurance
• National Health Insurance
• Restructuring
• National Health Service

• Evolution of transportation policy
• Promotion
• Late 18^th and early 19^th century
• Control of monopoly
• The government granted an exclusive franchise to a private company in exchange for the company agreeing to certain obligations
• Regulations to curb monopoly abuses developed
• Adequacy
• Addressed whether the revenues allowed were adequate
• Competition
• During the 1970's there was a move toward less regulation
• A move to reform transportation regulations
• Industries
• Airline Industry
• Issues
• Fares
• Service
• Safety
• Railroad Industry
• Over capacity of rail
• Trucking
• Highly segmented industry with government imposed barriers to into both the industry and into specific segments
• Urban transportation
• Change in policy due to the cumulative effect of decentralization of places of employment and residence and the increased auto ownership

• 1983 report of the National Commission on Excellence in Education
• Placed public school improvement on the front burner of the U.S. policy agenda
• Tied the fate and direction of public school reform to the nation's economic development and prosperity
• Formal intellectual achievement is significant in the promotion of economic well being.
• Routine services and manufacturing tasks have been automated.
• Human resources have become a capital asset to be nurtured and grown rather that operational cost to be minimized
• The result of public education created a compliant workforce able and willing to perform routine repetitive tasks for which economics of scale would pay relatively high wages to low skill workers producing standardized products
• The flaw in this showed up with international competition whose strategies were based on product innovation and quality produced by formally educated front-line workers.
• Federal policy making has concentrated on colleges and universities, not on setting educational standards or financing public education. K-12 level, federal influence has been marginal, limited to marrow categories of financial assistance
• Average U.S. children know less tan their foreign counterparts about matters requiring formal intellectual training
• Strategies and standards
• Improving public schools depend on the goals and operating standards by which public school performance can be judged
• Goals
• Creating general literacy and numeracy
• Socialization
• Integrated immigrants into a democratic civic culture
• Foster creativity and appreciation for the arts and culture
• Provide rudimentary mechanical and vocational training
• Schools have now become social service distribution centers
• So pervasive has the public school become in children's lives that current public policy discussions envision major expansion in the noneducational services provided by public schools
• Schools confront further public demands that both curriculum and student achievements match the requirements of a global marketplace that has been restructuring over the last several decades.
• High U.S. salaries can be maintained only when U.S. workers stay ahead of the development pace and establish themselves in the value added chain of economic activity that justifies high salaries
• Goals 2000
• Create a "world-class education for every child"
• Eight goals
• Goals achieved by:
• Set high standards
• Develop a process by which states and localities :buy into" the concept
• Finance competing models of education
• Allow students to transfer from more traditional models to the new and improved models
• Concept is driven by a venture capital notion of how to create and disseminate large-scale change w/o spending large dollars on old educational products that consume an infinity of resources without performing adequately
• Funding for Goals 2000 is uncertain
• Secretary of Labor's Commission on Achieving Necessary Skills (SCANS)
• Identified a series of skills defining the high-performance workplace competencies
• Policy alternatives
• Stay with present system
• Human resource Capitalism (HRC)
• Strategic use of performance standards to motivate excellence in learning and teaching
• Reduce the effects of poverty by strengthening family and community supports and institutions
• Coordinated, comprehensive, government led initiative
• Vouchers and Choice
• Voucher - consumer subsidies
• Consumers can acquire the mix of goods and services that best meets their needs
• Rely on the wisdom of educational markets in which consumers can use government-financed vouchers to pay for education in the public or private school of their choosing
• Charter
• Deregulating public schools by chartering competing public schools
• Designed to break the monopoly power of educational authorities by allowing more that one organization to offer public education in the community
• Public schools of the future will be expensive
• Education is better viewed as an investment in society's future security and well-being
• Human capital is an investment
• Problem in any plan of public school reform
• Enormous disparities in the ability to pay for public education based on the different fiscal capacities of the states and communities in which students happen to reside
• Public policy decision making is required to reduce the naturally occurring inequities found among districts and states
• Policy choice is simple: either meet and exceed a global standard of education, work, and productivity or accept economic decline

• Central concept in understanding environmental issues is externalities
• When one person's actions confers an unintended and uncompensated effect on another person
• Can be positive of negative
• Economist call externalities a form of market failure
• Intervention in the form of regulation or some other approach is not costless.
• Takes time, effort and money
• In general, unless the benefits of intervention are greater than the cost to the government, to businesses and to households, intervention probably is not wise
• House much pollution to prevent - abatement - is difficult to answer
• Standards are set in order to have pollution reduced.
• Developing sound environmental policies requires a careful blending of science and policy skills
• Need understanding of the natural trends and variability of environmental conditions
• Need understanding of science and technology to monitor the environment and to interpret what we see properly
• Necessary to have a thorough scientific understanding of the nature of the environmental problem and the effects of a policy change to be able to estimate the benefits of the policy
• Principal environmental laws are organized around the type of pollution
• Clean Air Act
• Set of principles to guide states in controlling air pollution
• Clean Water Act
• Combined federal-state program
• Restore and maintain the chemical, physical, and biological integrity of the nation's waters
• Resource Conservation and Recovery Act
• Response to the improper disposal of hazardous substances
• Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
• Addressed what to do with the hazardous waste sites that previously existed
• Issues
• Global warming
• The issue is whether there are temperature changes, whether these changes are being caused by human activities, and whether altering these human activities might alter these temperature changes
• Radon
• A colorless, odorless, radioactive gas that van be found almost anywhere and is harmful to people
• Solid waste disposal
• US represents 5% of the world's population yet generates 70% of its solid waste
• The municipal solid waste disposal problems today has been aggravated by changes on environmental regulations
• It is difficult to get good information regarding the assessing of solid waste disposal problems
• Problems: disposable products, napkins, plates, cups, diapers, packaging
• The EPA has proposed a hierarchical approach to solid waste disposal
• Source reduction
• Recycling
• Incineration
• Landfill

• Criminal justice business is booming for both sides of the law
• Fed by media coverage
• Large crime fighting industry has arisen
• Scramble to covert military-industrial complex to peacetime conditions
• Unchecked crime threatens the existence of civilized society by destroying the code by which all agree to live
• Conviction issue
• Type I error: false positive - innocent people are wrongfully punished
• Type II error: false negative - guilty people escape conviction and punishment
• Must match punishment with crime
• The crime and punishment problem can be generally defined as a search for justice where the goal is that the guilty are caught, tried, convicted, and sent to an appropriate punishment, while the innocent are either undisturbed or quickly discharged from unjust custody
• All criminal justice systems operate on a basic logic: for law and public policy to worry about crime, there must be an official complaint charging criminal behavior
• Complaints set the criminal justice machinery in motion, but three institutional processes - the police, the courts, and the prison system - make up the heart of what might be referred to as the criminal justice system.
• U.S. constraints
• Presumption of innocence given all citizens
• Safeguards placed on the accumulation and use of evidence
• Safeguards to prevent the law from becoming to capricious
• Due process in the processing of judgements about guilt and innocence
• Criminal proceedings as defined by the Sixth Amendment
• Limits placed on punishments
• No analyst thinks that it is possible to achieve simultaneously all of the goals that might drive a criminal justice system
• Policy makers and managers have tended to react to public mood swings from liberal and conservative approaches based, on whether the aim was to attack to root cause of crime or to wage war against criminals
• Federal government waged two wars on crime
• 1967 - 1980
• War against poverty and the social conditions that produce crime
• 1980 - 1992
• Targeted criminals and emphasized punishment, deterrence, cost-effective incarceration and treatment, and intergovernmental cooperation
• A person committing a crime has only about a 5% chance of being charged and convicted and a 1% chance of going to jail
• Compared to other countries, the U.S. is unique in the extent of gun distribution in the population and the frequency of gun use
• Current policy discussions are focused on the end process in the form of "get tough" provisions aimed at sending more people to jail to serve longer sentences for committing serious crime - very expensive
• Another strategy is to narrow the beginning by crime prevention and control
• Brady Handgun Violence Prevention Act
• First federal attempt to regulate and control the sale of handguns

• Agricultural policy can be seen as a prime example of government programs that are horribly expensive and ineffective
• The average annual cost of U.S. agricultural amounts to about $400 per nonfarm family.
• Payment-in-Kind (PIK) - 1980's - gave farmers more that $10 billion worth of commodities
• The average number of farmers in the U.S. is declining steadily
• There has been an increase in the average size of farms
• Consolidation of small farms into large farms began in the 1930's
• Consolidation has improved productivity in both human and land terms
• Employment on farms has decreased
• Much of the rhetoric surrounding U.S. agricultural policy has been directed at the goal of saving the family farm and increasing economic returns to farming
• Agricultural policy seems to have three principal goals throughout the world
• Price stability
• Increase farm incomes and avoid loss of farm employment
• Guarantee supplies of food
• Instruments of Agricultural Policy
• Price supports enforced by purchases or loans
• Limitation of output
• Deficiency payments, a subsidy equal to the difference between the market price and some specific price
• Control over or influence on imports or exports
• U.S. farmers received in 1991 about 30% of their income in subsidies
• In the U.S., consumers and taxpayers pay $1.26 for every $1.00 received
• Policies
• Sugar Policy
• U.S. sugar consumption has been declining while sweeteners have increased
• Sugar imports quotas put in place
• U.S. consumers have paid higher sugar prices that have much of the rest of the world
• Foreign policy considerations have played a role in determining who gets a quota and how long it will be
• Sugar policies help to keep poor countries poor
• Dairy Policy
• State and local regulations that were designed to protect public health by assuring high-quality drinking milk were frequently used to limit the free flow of milk from low-cost to high-cost producing areas
• Supply control of dairy products at the national level has consisted largely of import quotas
• The government has set prices of milk at above market levels which provide incentive for increased production and concurrently at to consumer cost, thus reducing the quantity demanded
• Peanut Policy
• Congress has set price supports very high
• USDA maintains a price support of $615.85 a ton.
• Non compliant peanut growers can export peanuts at $325 a ton.
• Cost consumers $300 to $500 a year
• Honey Program
• Cost taxpayers $100 million in 1988, almost equal to the market value of all U.S. honey production
• Price supports are about 50% above world market prices
• The design of agricultural policy can greatly affect the environment
• Much of the agricultural policy in the U.S. has actually encouraged environmental degradation
• Agriculture can cause three basic categories of potentially adverse environmental impacts off the farm
• Pollution of surface water
• Pollution of groundwater
• Loss of wildlife habitat
• Environmental degradation is not the intent of these agricultural policies, but it has been the widespread result

• U.S. foreign policy has mostly been dominated by the desire to avoid the types of foreign entanglements that had plagued European countries for hundreds of years
• The dominance of isolation was until WWII
• Public opinion polls during the 40's supported international initiatives such as the United nations, enacting the Marshall Plan, North Atlantic Treaty Organization
• With the collapse of the Soviet Union and the Warsaw Pact, and the conversion of former U.S. adversaries into new friends, the U.S. is now in the process of redefining its foreign policy fundamentals
• Three primary purposes of U.S. foreign policy
• To advance U.S. influence over world affairs and improve the predictability of events
• Potential Regions of Instability
• The Middle East and North Africa
• Eastern and Central Europe
• Russia
• China
• North Korea
• Sub-Saharan Africa
• South Africa
• South and Central America
• Caribbean
• Mexico
• Institutions relevant to U.S. foreign policy response
• U.S. Agency for International Development
• The United Nations (UN)
• North Atlantic Treaty Organization (NATO)
• Organization for Security and Cooperation in Europe (OSCE)
• The Western European Union (WEU)
• Asian Development Bank
• The Association of Southeast Asian Nations (ASEAN)
• Asian-Pacific Economic Cooperation (APEC)
• The European Union (UN)
• To promote U.S. economic interest
• NAFTA
• GATT
• The current consensus among U.S. policy makers continues to support expanding free trade and opening markets
• Trend toward regional integration
• To preserve national security
• The end of the Cold War made the earlier U.S. military strategies obsolete
• As a result of recent changes, the U.S. needs to assess the national security component of its foreign policy with a view to what are the security threats facing it and the size and shape of the military needed to confront these threats
• Four competing visions of the future U.S. international role:
• Come Home, America
• Return to semi-isolationist view
• Pax America
• Protect its security, the security of its friends, and the stability of the entire world
• Regional and International Organization Reliance
• Rely on International Organizations to provide world stability
• Pragmatic Interventionism
• If the U.S. pulls out of the international arena, then no one would lead
• The Department of Defense view of the altered security situation facing the U.S. is based on the following considerations
• Planning for Uncertainly
• Must prepare for a future threat that it now cannot identify
• Shaping the Strategic Environment
• Must reduce potential threats to itself and the rest of the world
• Utilization Defense Technology
• Reduce the loss of U.S. human life through the advances of technology
• Reconstitution
• Must be able to rebuild the downsized military industry if the need arises
• Lessons learned from the Gulf War
• Unity of command was great
• Professional military fought the war
• Logistics were superb
• Investment in high tech military equipment paid off
• Some argue that the U.S. has already exceeded the safety level of defense budget cuts and has produced a military incapable of carrying out its duties and responsibilities in the world
• Some argue whether the U.S. could fight two simultaneous regional wars
• In spite of spending cuts, the U.S. still spends more on defense that the world combined
• Factors that will influence
• The adequacy of forces to meet regional threats
• Amounts and types of overseas presence
• U.S. defense industrial capability and the ability to reconstitute
• How much money can be saved without impairing its ability to protect
• Long term costs

• Presently a considerable amount of ferment and change in public management at all three levels of government in the U.S.
• Result has been a search for new ways of doing things, both in terms of management performance and in terms of who does what in the implementation of public policy and the delivery of public policy
• Current movement to reinvent U.S. government
• Major governmental reorientations/reinventions in U.S. history
• President Andrew Jackson changed the political order and relationships among political parties, Congress, and the presidency
• President Abraham Lincoln crusaded on a "rebirth of freedom"
• President Theodore Roosevelt established the economic regulatory role of U.S. government and took major steps to strengthen the operation of the U.S. economy
• President Woodrow Wilson continued to professionalize the management of government and other steps to depoliticize the management of government
• President Franklin D. Roosevelt transformed the U.S. government from a passive to an active role in serving the everyday welfare of the citizens of the U.S.
• President Jimmy Carter plateformed on anti-Washington, antigovernment
• President Ronald Reagan plateformed that government was not the solution to the nation's problems but government was the problem
• The current trend has been to continue the movement toward greater decentralization of government service provision as a means of achieving better program productivity and success
• There have been numerous attempts to overhaul the management of the federal government due to public pressure and criticism
• Government agencies have often become a type of iron triangle
• The governmental organizational design situation is made more complex by the fact that many federal agencies are monopolies and have few incentives to innovate or improve
• The federal government has a short term mentality which has become ingrained in the way the government does business
• Congress has a tendency to micromanage which compounds the lock of management discretion by the agencies responsible for implementing the policies of the government and delivering public services
• Government structure inhibits results
• There is a lack of accountability for results
• There is an absence of a clearly stated, results-oriented organization vision in the responsible agencies and departments
• Civil Service Reform issues
• Merit principals
• Key features
• Fair and open competition for federal jobs
• Admission to the competitive service only on the basis of neutral examinations
• Protection of those in the civil service from political influence and coercion
• Noninvolvement in political activities by members of the civil service
• Critics argue that the civil service reform movement has been very successful in eliminating fraud and dishonesty from government services, but the result is a government that is slow, inefficient, and impersonal
• The 1978 Reform Act
• An attempt to deal with what many considered to be fundamental problems with the federal civil service
• There is major dissatisfaction among civil service workers
• Issues include pay, decentralization and deregulation
• One of the major obstacles to reform the government has been that measuring the performance of government is a complicated and difficult matter
• In order to truly measure the performance of government at any level, it is necessary to measure outcomes, or the broader result of the government program
• There has been numerous attempts to link performance with budget
• Government Performance Measure Example
• Elementary and secondary education
• Student days
• Student graduated
• Dropout rate
• The most recent major effort at performance was the Government Performance and Results Act of 1993
• The stated purpose was to "provide for the establishment, testing, and evaluation of strategic planning and performance measures in the Federal Government, and for other purposes."

• The types of fundamental changes in government currently being discussed will require the approach to the management of the nation's public organization to undergo substantial transformation, or frame-breaking change
• Three important interrelated approaches to public management are currently attracting considerable attention among those interested in inducing governmental transformation in society:
• Privatization of public functions; i.e. Vouchers
• Factors affecting whether and how a particular public good or service can successfully be privatized
• The nature of the good
• Service specificity
• Availability of producers
• Efficiency and effectiveness
• Scale
• Benefit-cost relationships
• Responsiveness to consumers
• Susceptibility to fraud
• Economic equity
• Equity for minorities
• Responsiveness to other public priorities
• Must consider nongovernmental organizations (NGO which include those organizations sometimes known as private voluntary organizations (PVO) and sometimes simply as not for profit, i.e. United Way
• Private sector quality management applications to government functions
• An important force now having a considerable impact on the management of public affairs in the U.S. has grown out of the total quality management (TQM) movement that originated in the manufacturing sector of the economy in the early 80's
• Major players
• J.M. Juran
• Juran Trilogy
• Quality planning
• Quality control
• Quality improvement
• Kaoru Ishikawa
• Describe the essence of quality control as:
• Knowing the requirements of the consumer
• Knowing what the consumers will buy
• Knowing the cost in order to define quality
• Anticipating potential defects and complaints
• Accompanying quality control by action
• Achieving an ideal state of quality control where inspection is no longer needed
• W. Edwards Deming
• His approach to quality management is preferred by many in government circles because it focuses more on the cultural and leadership dimensions of TQM and integrates process improvement methods with new methods of leading people
• 14 strategic points that organizations must accept as basic management philosophy
• Create constancy of purpose
• Adopt the new philosophy
• Cease dependency on inspection
• Do not award business on the basis of price, but concentrate on minimizing total cost
• Improve production and service systems constantly and forever. This will improve quality and productivity and will decrease cost
• Institute on the job training for all employees
• Institute leadership
• Drive out fear
• Break down barriers
• Eliminate slogans and targets
• Eliminate work standards and quotas. Stop management by objective. Eliminate management by numbers
• Remove barriers that rob people of their right to pride of workmanship
• Institute a vigorous program of education and self improvement
• The transformation is everybody's job. All must be involved
• It is essential that all understand that TQM is a "journey, not a destination," and that it is naïve to expect quick results
• TQM key concepts are also evolving into new generations of management thinking under such themes as organization re-engineering and the development of the virtual organization
• Set of market-based approaches to public service delivery
• New approaches are based on the work of microeconomic theorists and so-called rational choice political scientists
• To achieve change within government, officials "must promote…a culture that values a proactive, problem-solving attitude to replace the reactive, problem avoiding attitude that too often dominates the federal bureaucracy
• Government much search constantly for new ways to improve services and heighten productivity
• The central failure of government today is one of means, not ends.
• Principles that may be necessary for moving government to a new approach to public affairs
• Catalytic government
• Community-owned government
• Competitive government
• Mission-driven government
• Results-oriented government
• Customer-driven government
• Enterprising government
• Anticipatory government
• Decentralized government
• Marker-oriented government
• The National Performance Review (NPR)
• Goal is to make the federal government both less expensive and more efficient, and to change the culture of our national bureaucracy from complacency and entitlements toward initiative and empowerment.
• Report had four chapters
• Cutting Red Tape
• Putting customers first
• Empowering employees to get results
• Getting back to basics
• Implementation
• Many are concerned about whether and how they it is going to be implemented
• Will depend on the administration's forging "a strong coordinated partnership with Congress to develop these strategies"
• Winter Commission Report
• There is a growing consensus among both citizens and public officials that state and local institutions of government need to drastically improve their capacity and performance if we are to meet the challenges of our rapidly changing economic and social systems
• Not all are in agreement to TQM
• Two categories
• Those who do not support the fundamental ideas of TQM, privatization, of the use of the market principles
• Those who believe the NPR and are similar implementation efforts are mistaken or will be ineffective