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Goals of Public Policy: Equity and Efficiency

Goals of Public Policy: Equity and Efficiency. Education Policy Analysis. Key Features of the Market. Social system where individuals pursue their own welfare In their own “self-interest” Exchanges are made when they are mutually beneficial

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Goals of Public Policy: Equity and Efficiency

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  1. Goals of Public Policy:Equity and Efficiency Education Policy Analysis

  2. Key Features of the Market • Social system where individuals pursue their own welfare • In their own “self-interest” • Exchanges are made when they are mutually beneficial • Participants are in competition for scarce resources • Competitive drive leads participants to be resourceful, efficient, and innovative • Under certain assumptions this leads society to an optimal equilibrium • Neoliberal in Kezar’s terminology

  3. Key Features of the Polis • Communities try to accomplish something as a community • Even with conflict of people’s objectives within the community • The Polis model assumes collective will and collective effort • A community must have membership • Membership definitions are the primary political issue • Political and cultural membership are important distinction • Communitarian in Kezar’s terminology

  4. Equity “Distributions . . . are at the head of public policy controversies” (Stone, 2002, p. 39) “Equality, may in fact mean inequality; equal treatment may require unequal treatment; and the same distribution may be seen as equal or unequal, depending on one’s point of view” (Stone, 2002, p. 42)

  5. Equality vs. Equity Equality – Denotes sameness • signifies the part of the distribution that contains uniformity Equity - denotes distributions that are fair • May be equal or unequal • Judgment based – definition of fair

  6. Horizontal vs. Vertical Equity Horizontal Equity – Equal treatment of equals • Similar people should receive the same benefit • EX: Subsidies to attend public universities Vertical Equity – Unequal treatment of unequals • Different people will receive different benefits based on who would (or should) benefit the most • Ex: Pell Grant

  7. Dimensions of Equity • Who are the recipients? • Membership • Preferences across different groups • What is being distributed? • Boundaries • Value of the good • What is the process of distribution? • Competition, lotteries, elections • Important with indivisible goods

  8. Rawls – “A Veil of Ignorance” Social Primary Goods – Goods that are important to people but are but are subject to social and political institutions • Power, opportunity, wealth, civil rights, liberty • Relevant in public policy decisions Natural Primary Goods – Goods that are important to people but less subject to society • Intelligence, strength, imagination, talent • Unequally distributed

  9. Rawls – “A Veil of Ignorance” Thought Experiment: Assumptions: • Natural primary goods are unequally distributed • Social primary goods are distributed by society Question: • How do you distribute the social primary goods? Process: • Society determines the distribution of social primary goods before individuals know their natural primary goods.

  10. Rawls – “A Veil of Ignorance” Thought Experiment: Outcomes according to Rawls: • Rational people would want social primary goods to be distributed equally • Some social and economic inequality if they worked in everyone’s advantage and were attached to opportunities available for everyone

  11. Efficiency Simple Definitions: • Getting the most out of a given input • Achieving an objective for the lowest cost Complications: • Definition of output • Definition of inputs

  12. Pareto Optimality (Efficiency) Three conditions must be met: • Efficiency in production – production activities must be organized to produce maximal output given inputs. • Efficiency in consumption – goods must be distributed efficiently among individuals. • Product mix efficiency – optimal combinations of goods should be produced given technologies and tastes.

  13. Pareto Optimality Two underlying principles: • Individualism - Individuals are the best judges of their own well-being. • Can all make these decisions? • Pareto efficiency – Goods are distributed in such a way that you can not make at least one person better off without making any worse off. • Is this possible?

  14. Equity vs. Efficiency • Based upon the assigned readings (Doyle or Dowd & Grant) identify an example of the tradeoff between equity and efficiency • How is equity described in the article? • How is efficiency described in the article? • What are the key arguments presented for focusing on equity and efficiency in the policy

  15. Discussion • Compare and contrast the how DesJardins (2001) and Stone (2002) describe the tradeoff between efficiency and equity in public policy.

  16. Group Activity Identify a problem in higher education (be creative): • Identify a policy that could remedy the problem based upon an efficiency argument • Identify a policy that could remedy the problem based upon an equity argument • Justify your answers based upon definitions of efficiency and equity from Stone and DesJardins

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