Questions for Robert Rotberg

1. According to Rotberg, why do nation-states exist? Does Rotberg see privatized education and health systems as an indicator of a strong state, or a failed or failing state? In failed states, do elites invest profits domestically or overseas? Questions for Robert Rotberg

2. Robert Rotberg “The New Nature of Nation-State Failure”

3. Consider a spectrum of ideal democracy to failed state. What are some of the normative conditions, positive conditions. • Robert Inglehart – life satisfaction, interpersonal trust, low support for radical change • Inability to “deliver positive political goods” leads to a loss of legitimacy. Positive liberty and negative liberty. • Nation-states exist to deliver political goods—security, education, health services, economic opportunity, environmental surveillance, a legal framework of order and a judicial system to administer it, and fundamental infrastructural requirements such as roads and communications facilities—to their citizens. Failed states honor these obligations in the breach. They increasingly forfeit their function as providers of political goods to warlords and other non-state actors. In other words, a failed state is no longer able or willing to perform the job of a nation-state in the modern world. Rotberg

4. “Standards of living massively deteriorate” “Infrastructure of ordinary life decays” “greed of rulers overwhelms their responsibilities to better their people and their surroundings.” Favor a “narrowly based elite.” – two Americas “Growth of criminal violence.” Private provision of public goods symptoms

5. Legislatures as rubber stamps • “Democratic debate is noticeably absent” • “Judiciary is derivative of the executive” • “The bureaucracy has long ago lost its sense of professional responsibility” • “Education and health systems privatized…or have slowly slumped to increasingly desperate levels of decrepitude.” symptoms

6. “Failed states provide unparalleled economic opportunity, but only for a privileged few. Those close to the ruler or the ruling oligarchy grow richer while their less-fortunate brethren starve. Immense profits can be made from currency speculation, arbitrage, and knowledge of regulatory advantages. But the privilege of making real money when everything else is deteriorating is confined to clients of the ruling elite or to especially favored external entrepreneurs. The responsibility of a nation-state to maximize the well-being and personal prosperity of all of its citizens is conspicuously absent, if it ever existed.” symptoms

7. “Corruption flourishes in failed states” “Corrupt ruling elites invest their gains overseas, not at home.” http://in.reuters.com/article/2012/07/22/offshore-wealth-idINL6E8IKF6120120722 $32 trillion offshore – effect of contractionary monetary policy (US GDP $14.99 trillion) “An indicator, but not a cause, of failure is declining real national and per capita levels of gross domestic product (GDP).” “greater disparities of income between the wealthiest and poorest fifths of the population.” (richest 400 people control more wealth than the bottom 150 million) symptoms

8. “High official deficits (Zimbabwe’s reached 30 percent of GDP in 2001) support lavish security spending and the siphoning of cash by elites. Inflation usually soars because the ruling elite raids the central bank and prints money. From the resulting economic insecurity, often engineered by rulers to maximize their own fortunes and their own political as well as economic power, entrepreneurs favored by the prevailing regime can reap great amounts of money.” Change to how GDP deflator (Real GDP) is calculated 1992 Change to how CPI (inflation) is calculated 1998 symptoms

9. “Once the state’s capacity deteriorates and what little capacity still remains is devoted largely to the fortunes of a few or to a favored ethnicity or community, then there is every reason to expect less and less loyalty to the state on the part of the excluded and the disenfranchised. When the rulers are seen to be working for themselves and their kin, and not for the state, their legitimacy, and the state’s legitimacy, plummets. The state increasingly is perceived as owned by an exclusive class or group, with all others pushed aside.” symptoms

10. “Many other modern states approach the brink of failure, some much more ominously than others. Others drift disastrously downward from weak to failing to failed.” symptoms

11. Most often, public policy and regulations are reactions to market failures and negative externalities. • Market failure is when the allocation of goods and services by a free market is not efficient. That is, there exists another conceivable outcome where a market participant may be made better-off without making someone else worse-off or that allocation can be improved upon from the societal point-of-view. • Negative externality: When the production or consumption of a good or service generates unintended costs and affects an otherwise uninvolved party who did not choose to incur that cost. • Policy options: • Use of the court system to allow those negatively affected to seek compensation. • Government alleviates the negative externalities and gives the bill to those who have created the externality • Create rules and regulations that prevent the negative externalities in the first place. Chapter 16 Domestic Policy

12. Public policy: “An intentional course of action or inaction followed by government in dealing with some problem or matter of concern.” Whether we choose to address a problem or simply maintain the status quo a decision was made and this becomes policy. “The impact or meaning of a policy depends on whether it is vigorously enforced, enforced only in some instances, or not enforced at all.” This statement links the effectiveness of legislation to bureaucratic responses of administrative law. This also demonstrates the potential veto power of the bureaucracy – the third leg of the iron triangle. “Where the laws cannot be executed it is all one as if there were no laws.” (John Locke) Public policy

13. Is there a problem? If there is a problem, is it something that the government can and should address? What are the causes of the problem (framing)? Income inequality: Is it a problem? Not for the well off, but definitely for the growing number of Americans slipping into poverty. Whether the government can and should address the problem depends on what you believe to be the cause. If you believe that poverty is increasing because those falling into poverty are incompetent or lazy, then government cannot fix the problem. If, on the other hand, you believe that concentrated economic power is forcing Americans to accept less and less, reducing their ability to stimulate the economy through consumption and investment, then you would believe that government can (and should) do something about the problem. Step 1 problem recognition and definition

14. Agenda setting: “The constant process of forming the list of issues to be addressed by government.” The government has literally hundreds of issues to deal with. If we see 5000 bills introduced per year in Congress, is the problem of sufficient salience to be moved up the ladder as a priority? Issues are regularly added to and removed from the agenda. Often, interest groups play a significant role in this process. Seniors, struggling to afford medications were able to get drug prices on the agenda through AARP and other groups. Focusing events that highlight a specific problem can move an acknowledged problem that was on the back burner to a priority position on the agenda. Politicians with power can move their own agendas up in priority. The President has this power, so does the Speaker of the House and the Senate Majority leader. Committee chairman also influence the agenda. Do the Koch Brothers and the Chamber of Commerce have this power? Interest groups find it easier to keep things off the agenda (veto power) than to necessarily advance an agenda. Step 2 agenda setting

15. Salience: The importance of a particular policy issue in relationship to other issues on the policy agenda. Step 2 agenda setting

16. “The crafting of proposed courses of action to resolve public problems.” • Routine formulation: regular and routine marginal changes in existing policies. • Analogous formulation: what has been done before with the same problem in other places or a similar problem? How have states handled this problem? The development of SCHIP came out this way, a state policy that became a national policy. • Creative formulation: The New Deal and The Great Society were both examples of thinking outside the box and implementing policies that did not exist elsewhere. • Policy formulation takes into consideration the various stakeholders in an issue area and the political feasibility of a given proposal. For example: Barack Obama first negotiated with PhRMA in order to get their support prior to working to get something passed. The result was the abandonment of a public option, government negotiation, and parallel importation as possible cost controls for drug prices. Step 3 Policy formulation

17. stakeholders

18. “The approval of a policy proposal by the people with the requisite authority, such as a legislature.” Congress can pass a law or the president can issue an executive order. During this process, the bill can be amended to either water it down or make it stronger. The form of amendments added are often influenced by party leadership and committee chairs. Max Baucus either allowed healthcare reform to be watered down or negotiated for the best deal he could get. Nobody knows for sure except Max Baucus. Step 4 Policy adoption

19. “Whether a policy is well funded, poorly funded, or funded at all has a significant effect on its scope, impact, and effectiveness.” Autonomy and capacity Many social programs are seriously underfunded. The textbook gives the example of OSHA and HUD. Add to this list No Child Left Behind, the EPA, and the SEC. At the same time, we have no problems in finding funding for oil and agricultural subsidies. These are the priorities established by our system of governance when there is no limit to capital accumulation and industries show a willingness to deploy economic resources in the political arena. “The average monthly number of TANF families was 1,847,155 in FY 2010. The estimated average monthly number of TANF recipients was 1,084,828 adults and 3,280,153 children.” (USDHHS) TANF nationwide costs the same as a 10% tax break for the top 10 corporations. “In the great bailout of the Great Recession, one corporation alone, AIG, got more than $150 billion-more than was spent on welfare to the poor from 1990 to 2006.” (Stiglitz, J. 2012. The Price of Inequality) Step 5 budgeting

20. “The actual administration or application of public policies to their targets.” • Voluntary compliance: paying taxes, not smoking in businesses. • Courts: May rule on whether the legislation can be enforced in a constitutional manner • Administrative agencies: Through the making of rules and regulations. (don’t worry about the names of techniques, but understand what they do) Administrative agencies can use a system of sticks and carrots to coerce and incentivize the desired behavior of businesses and individuals. Step 6 Policy implementation

21. “The process of determining whether a course of action is achieving its intended goals.” It is in this step that we see a clear difference between pragmatism and ideology. If a policy clearly is not working it should be scrapped. If there are flaws in the policy preventing it from working effectively, it should be reformed and reevaluated until it does work. Ideologues deny the failure of their own policies while denying the success of policies they oppose. Pragmatists have no attachment to a policy and are willing to get rid of it, but are also disinclined to “throw the baby out with the bath water.” Step 7 policy evaluation

22. Example: Welfare as originally passed did develop a subculture of women dependent on the state for assistance. Ideological conservatives advocated for ending the program while the more socialist among the Democrats denied a need for reform. The Earned Income Tax Credit (EITC) and the State Children's Health Insurance Program (SCHIP) gave welfare recipients a pathway to gainful employment without posing a threat to their children’s health and welfare. Those to the far left see the reforms as throwing the poor under a bus, but the reforms reduced welfare rolls by 60% and affected families increased income by 35%. Example: welfare

23. Medicaid: “A government program that subsidizes medical care for the poor.” • Medicare: “The federal program established during the Lyndon B. Johnson administration that provides medical care to elderly Social Security recipients.” • Has 4 parts: A, B, C, and D, with D being the most controversial aspect of Medicare. Enables drug companies to charge higher prices for drugs to increase revenues without the government using its monopsony power to negotiate for lower prices. Medicare and Medicaid

24. In terms of policy evaluation: Drug prices increased. Seniors were now able to afford the higher prices to a point. • Part D coverage: • Deductible: $295 • Basic coverage: $295 - $2,700 75% covered • The donut hole: $2,700 - $6,154 0% covered (senior pays all costs) • Catastrophic coverage: Over $6,154 95% covered • Whether seniors are better off depends on whether they are in the donut hole or not. • Are we better off? Our tax dollars are paying for this policy. In addition, the cost of medications for those not on Medicare have increased as demand has increased. This is a market distortion. Medicare part D

25. The textbook talks about the AMA being opposed to a national healthcare policy in the 1930s and 1940s. What is perhaps more important is the mobilization of unions to oppose healthcare. One of the benefits of union membership has been healthcare coverage. Unions were concerned that if it was universally provided that union membership could potentially fall off. Unions organized at the grassroots level to depict a single-payer system as being socialist. Today unions are losing membership as manufacturing moves offshore, often to countries that do provide universal coverage so the cost of healthcare is not figured into the cost of labor. National health insurance policy

26. The National Institutes of Health (NIH) spends taxpayer money on the earlier processes of research. 10,000 chemical compounds may be tested before one drug is identified that may be useful in the fight against cancer. This is an expensive process that, more often than not, leads to dead ends. Once a drug is isolated and shown to have a potential for commercial use (not necessarily something new and novel) it is transferred to private sector drug companies for development and distribution with drug companies setting prices regardless of the ratio of government cost vs company cost in the development of the drug, or even the efficacy of the drug. Other countries negotiate with the drug companies for a fair price, we do not. The NIH, PhRMA, and the bayh-dole Act

27. From the textbook: “Most Americans accept and support extensive government spending on medical research. Congress, in fact, often appropriates more money for medical research than the president recommends.” Would Americans be as supportive if they realized that the technology transfer of research was lining the pockets of the drug companies? Yes, we need advances in medicine, but there are ways to develop new drugs with taxpayer money that would not require the taxpayer to pay for the research twice: once through initial discovery and the second time being in exorbitant monopoly prices for drugs. For more on this topic: Angell, Marcia, M.D. 2005. The Truth About the Drug Companies: How they Deceive us and what to do about it. New York, NY: Random House. Who are they helping?

28. Does this seem to be effective or efficient health care policy? Single-payer vs private health care systems US as outlier - In statistics, an outlier is an observation that is numerically distant from the rest of the data.

29. The difference between conservative and liberal reforms may well come from the basic perception of individuals. Where conservatives see some as being superior, liberals see individuals as having a greater potential for equality. Conservatives see concepts of equality as futile where liberals see equality as an essential element of democracy. Brown v. BOE stressed the importance of education in determining life chances. Education reforms

30. “Liberal policy reformers emphasized the need to promote equality through educational opportunity.” • Bussing • Dept. of Education • “Conservative policy reformers viewed education through the lens of political and social order, while also emphasizing the issue of economic freedom in educational choices.” • Privatization of the education system • Bad schools fail and are closed to be replaced with better schools. • Seek subsidization of religious schooling • When we consider efforts to disenfranchise lower income voters, is there a conscious effort to keep poorer people uninformed and misinformed? • Educational standards were higher when a single income could support a family of four in a middle class lifestyle. This left a parent free to concentrate on the socialization and education of their children. Might higher wages for workers be the best answer for improvements in our system of education? education

32. As a result of the oil crises of the 1970s and the stagflation that went with it, President Jimmy Carter, who worked with nuclear submarines, adopted policies to promote new technologies of conservation and alternative energy sources. • An unpopular 55mph speed limit • Funding for alternative sources of energy, including photovoltaics • Tougher Corporate Average Fuel Efficiency (CAFÉ) standards • Developed the Department of Energy (and Education) • An unfortunate TV message to the American public suggesting Americans put on a sweater. • http://www.youtube.com/watch?v=MmlcLNA8Zhc • When oil prices dropped in the early 1980s, these efforts were largely abandoned or defunded. In fact, tax breaks were offered through a 1986 loophole for businesses and farmers who purchased gas-guzzling SUVs and trucks. Energy policy

33. Energy policy of the Bush Administration was developed behind closed doors under the supervision of Vice President Dick Cheney (former CEO of Halliburton). Oil companies, environmental groups, and state, local, and federal officials were present in months of meetings. Information from the meetings remains confidential as a Court of Appeals denied access to meeting information under the Freedom of Information Act (FOIA) Energy Task Force

34. Clean Water Act (1972) The Cuyahoga River burning in 1969. It was not the first time but it was the last time. Lake Erie was declared dead. http://www.nytimes.com/2013/03/15/science/earth/algae-blooms-threaten-lake-erie.html?pagewanted=all&_r=0 Environmental policy

35. Clean air act of 1970

36. It is, perhaps, illuminating that the textbook does not talk about national initiatives in addressing these issues. Current advancements in these policy areas is primarily being forwarded by individual state and local governments. Efforts at the national level meet with obstruction and the status quo remains. Energy and environmental policy