Key Terms
Public policy
Stable, purposive government actions addressing societal concerns Private goods: excludable, finite; can be owned and tr
Economists classify goods based on two questions
Can they be owned? Can they run out?
Tragedy of the commons
When individuals exhaust a shared resource by acting in their own immediate self-interest. Fisheries collapse; air gets
Free-market economics
Supply and demand, without government interference, is the most efficient system. Private goods self-regulate; producers
Libertarians take this furthest
Government almost always operates less efficiently than the private sector; its role should be minimal.
Distributive policy
Society broadly funds benefits for specific groups or activities. Rationale: the activity provides long-term benefit to
Regulatory policy
Imposes costs on a specific industry or sector to protect the broader public. Muckraker journalism in the early 1900s -
Redistributive policy
Transfers resources from one group to another.
Robin Hood logic
Those with more pay in; those with less receive benefits. Goal is a minimum standard of living for everyone.
Origins
Great Depression, 1930s. Purpose: create a safety net that prevents economic hardship from destabilizing democracy.
Two core functions
1. Equity: ensure democratic participation isn't undermined by extreme poverty 2.
Government must balance two competing interests
Helping businesses grow and protecting the public from unfair or unsafe practices.
Major subsidy recipients
Agriculture and energy. Rationale: unpredictable weather and commodity prices create risks that private markets alone ca
Policy advocates
Hold a normative position (what SHOULD happen); work to shape or create proposals that achieve a specific goal. Start wi
Policy analysts
Aim for objectivity; identify all possible options available to decision makers and assess the likely impact of each. St