16.2 Categorizing Public Policy

The government plays a crucial role in providing different types of goods and services to society. From private goods efficiently allocated by the market to public goods that require government intervention, understanding these categories helps explain why certain policies are necessary.

Public policy domains in the US cover a wide range of issues, including economic, social welfare, foreign policy, education, and environmental concerns. These areas shape how resources are distributed and regulated, impacting the lives of citizens and the functioning of society as a whole.

Types of Goods and Public Policy Domains

Types of goods in society

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• Private goods
  • Excludable meaning access can be restricted to paying customers
  • Rival in consumption where one person's use diminishes availability for others
  • Efficiently allocated by free market forces of supply and demand (cars, clothing)
  • Limited government involvement needed as market incentives drive production
• Public goods
  • Non-excludable as it's difficult or impossible to prevent access (streetlights, clean air)
  • Non-rival since one person's consumption does not reduce availability for others
  • Free-rider problem leads to underproduction as people enjoy benefits without paying
  • Government provision necessary to ensure adequate supply for society
  • Examples: national defense, public parks, lighthouse navigation
• Common resources
  • Non-excludable as access is open to all and cannot easily be restricted (ocean fisheries)
  • Rival in consumption where one person's use reduces availability for others
  • Prone to overuse and depletion known as "tragedy of the commons"
  • Government regulation required to prevent exploitation and ensure sustainability
  • Examples: fisheries, forests, groundwater aquifers, grazing lands
• Club goods
  • Excludable as access can be limited to members who pay fees (golf clubs, gated communities)
  • Non-rival up to a point where congestion occurs but additional use has minimal cost
  • Can be provided by private entities or government depending on circumstances
  • Examples: cable television, toll roads, recreational facilities, internet platforms

Public policy domains in US government

• Economic policy
  • Fiscal policy involves government spending and taxation to influence economic conditions
  • Monetary policy conducted by the Federal Reserve to control money supply and interest rates
  • Trade policy sets tariffs, quotas, and trade agreements to govern international commerce (NAFTA, TPP)
• Social welfare policy
  • Social Security provides retirement, disability, and survivor benefits funded by payroll taxes
  • Medicare offers health insurance for elderly and disabled while Medicaid assists low-income families
  • Unemployment insurance temporarily supports workers who lose jobs through no fault of their own
  • Food stamps (SNAP) and housing assistance (Section 8) help low-income households meet basic needs
• Foreign policy and national security
  • Diplomacy and international relations to advance US interests and manage global challenges
  • Military and defense spending to protect the nation and project power abroad (Defense Department)
  • Intelligence gathering and counterterrorism efforts to prevent attacks and combat threats (CIA, FBI)
• Education policy
  • K-12 education funding and standards set primarily by state and local governments
  • Higher education funding includes research grants, student loans, and support for universities
  • Federal policies like No Child Left Behind and Common Core aim to improve outcomes
• Environmental policy
  • Air and water quality regulations under Clean Air Act and Clean Water Act
  • Climate change mitigation efforts to reduce greenhouse gas emissions (Paris Agreement)
  • Conservation and land management of national parks, forests, and wildlife refuges

Policy forms and resource distribution

• Redistributive policies
  • Transfer resources from one group to another, often from wealthy to disadvantaged
  • Examples include progressive taxation, welfare programs, social insurance
  • Aim to reduce income inequality and provide a social safety net
• Distributive policies
  • Allocate resources to specific groups, regions, or industries
  • Examples include farm subsidies, infrastructure projects, research grants
  • Can lead to an unequal distribution of benefits and concentrated costs
• Regulatory policies
  • Set rules and standards for private sector behavior to protect public interests
  • Examples include environmental regulations, consumer protection laws, financial regulations
  • Can impose compliance costs on businesses which may be passed on to consumers
• Constituent policies
  • Provide benefits to all members of society rather than specific groups
  • Examples include public education, national defense, public health services
  • Promote equal access to resources and opportunities considered basic rights

Policy Process and Analysis

• Policy cycle describes the stages of policymaking from problem identification to evaluation
• Policy typology categorizes policies based on their characteristics and impacts
• Policy instruments are tools used by governments to implement policies (e.g., taxes, subsidies)
• Policy implementation involves putting enacted policies into practice
• Policy evaluation assesses the effectiveness and outcomes of implemented policies
• Stakeholder analysis identifies groups affected by or influencing a policy