American Politics | Political Economy and Public Policy

captured agency: A theory describing the relationship between an executive agency and the private interests that it regulates as one where private entities "capture" the agency by being the strongest voice of influence in its decisions. The theory suggests the result that agencies often serve private interests rather than the public interest.
comparative advantage: The ability of a country or a company to produce a good or service at a lower cost than other countries or companies.
competition: Two or more economic actors vying against each other in the marketplace for access to a scarce resource such as customers. According to standard economic theory, competition among companies and other economic actors keeps prices down and quality up.
depression: A period of severe economic decline, including a decline in production, increases in unemployment and in business bankruptcies, and falling prices (due to decreased demand).
economic growth: Increase in the value of goods and services produced in an economy, over a given time period. For instance, growth in the American economy is calculated quarterly and annually, by using various indexes, such as estimates of gross domestic product which include measures of private consumption, capital investment, and the like).
economic policy: Actions (or inaction) by government affecting economic activity or having economic consequences for individuals or groups.
elite: Those in leadership positions. Any organization designates elites, when it selects leaders. On a broader societal scale, though, the concept of an elite has come to mean a small but powerful and dominant group of leaders who enjoy privileges and resources that others do not have.
elite theory: A sociological/political theory holding that power in American society (government and economics) is wielded by a relatively small group of people who are not only from the upper classes, but who share values and interests. Elite theory suggests that policy outcomes are tilted toward the elite.
entitlement: A government program to the benefits of which qualified beneficiaries have a legal right. Examples include Social Security, farm price support payments, Medicare, and veterans' benefits. In terms of the federal budget, entitlement programs obligate the government to a funding level, creating less flexibility for policymakers.
Federal Reserve Board: The federal independent regulatory commission in charge of the nation's monetary policy. Known by the nickname "the Fed," it affects economic behavior by expanding or contracting the supply of money. It does so by adjusting banks' reserve requirements and setting discount rates that will be charged to its member banks thus affecting interest rates paid by borrowers and consumers.
fiscal policy: Taxing, spending, and borrowing practices of the federal government.
free rider: Public goods are often spoiled or not provided at all because people can use, consume, or enjoy them without paying the associated costs. This free rider problem makes it difficult to do things of great value to everyone but of little value to any one person. Examples include the difficulties of maintaining a clean environment or a working democracy with high levels of citizen participation.
iron triangle: The concept of 'iron triangles' (sometimes referred to as 'subgovernments') implies that government policy is largely made by well-defined networks of legislators, government bureaucrats, and private sector interests internally tied together by specific policy matters with which they are all concerned and externally insulated to a significant degree from other subgovernments and from oversight by other parts of government or other groups. For the most part, the public knows or seems to care little about the detail or broad outlines of policy leaving the relatively few government and private sector representatives involved with policy making considerable discretion.
laissez-faire: A French term meaning let people do as they choose. It has come to describe a philosophy concerning the role of government in the economy - a belief that government should refrain from interfering in economic activities, allowing private entities to make economic decisions freely.
monetary policy: Governmental decisions affecting the supply of money and the characteristics of its flow and exchange. The Federal Reserve Board is the dominant governor of monetary policy in the United States.
pluralism: A theory that American politics is best understood through the generalization that power is broadly (though unequally) distributed among many more or less organized interest groups in society that compete with one another to control public policy. Some groups dominate in one or two issue areas while others dominate in other issue areas. Pluralism describes an ideal-theoretical arrangement of society and representative government according to which many different groups with competing interests use their varying but not grossly unequal resources to shape election outcomes and public policy.
political economy: An approach in the social sciences that emphasizes the study of the interrelationships between political and economic institutions and processes. Political economists highlight the integration of politics and economics to explain decisions about the distribution and redistribution of resources.
privatize: A process of shifting publicly owned or controlled resources to private control. In the modern era, a "privatization" movement seeks to have governments contract with private companies rather than providing services directly.
progressive taxation: A tax plan structured so that one's tax rate goes up as one's income goes up.
proportional (flat) taxation: A tax plan structured so that one's tax rate is unaffected by one's income level - every taxpayer pays the same percentage of his or her income to government.
public policy: A government's actions or inactions, and the effects of those actions or inactions. Public policy could be defined as decisions and actions, or it could be defined as outcomes of those decisions and actions.
regressive taxation: A tax plan structured so that one's tax rate goes up as one's income goes down.
regulation: An authoritative government decision restricting designated private behavior. An example would be the federal requirement that food products be labeled and packaged truthfully. Another example would be the federal requirement that employers pay a minimum wage.
resources: The available material means (e.g., natural resources, money, human labor) for pursuing human goals or desired objectives.
rules and regulations: Executive agencies write rules that prescribe agency conduct or action, often extending the laws that initially authorize agency action. Agencies that have authority and responsibility for regulating private actions also write regulations that impose legal restrictions and requirements on private entities.
safety net: A commitment by government to provide minimal life-sustaining resources in the event that an individual cannot do so. Examples of a safety net include unemployment compensation, workers' compensation, and social security retirement.
social policy: Actions (or inaction) by government that guide our development as human beings and our relationships with other humans and our broader environment. Examples include health and human service programs, education standards, and environmental regulations. Social policies often are also economic policies.
subsidy: An economic payment by government to another entity, designed to influence or reward behavior. Subsidies are important tools used by government to achieve its desired goals. Of course, outside entities also seek and compete vigorously for subsidies. Thus, subsidies may benefit the public interest, or they may reflect redistribution of public goods for private gain, or a combination of the two.
tax: A compulsory transfer of money from private individuals or groups to the government.
tax expenditure: Tax loopholes, tax breaks, and tax exemptions. For instance, if a tax code specifies a tax rate of 10 percent on a given activity, but a legislative body then grants tax exemption to some an organization, the value of the exemption - how much money the exemption cost the public treasury - is called a "tax expenditure." A tax expenditure may also be classified as a subsidy.
The Commons: Resources openly available to all. Examples include air, the ocean, and public parks. The existence of a Commons is a policy issue: should particular resources be owned by private entities or by the public? Regulation of the Commons also presents policy dilemmas: should one individual be restricted in his or her use of the Commons, or allowed unregulated access, in which case the resource could be used up, or conflicting uses (e.g., two or more people using the same radio frequency for broadcasts) could make the Commons unusable.
unemployment: The economic condition of members of the labor force who wish to work but cannot find a job.
welfare: Government provision of benefits to qualifying individuals or organizations.
welfare state: A government that devotes a large share of governmental resources to benefits for qualifying individuals or organizations.

Political Economy and Public Policy » Glossary