Functional and Legislative Theories of Federalism

1. Functional and Legislative Theories of Federalism Presentation by Khaled F. Sherif

2. INTRODUCTION This presentation explains two theories of Federalism • Functional Theory - identifies distinctive areas of competence for each level of government; and predicts that each level will expand in its arena of competence. • Legislative Theory - the modern federal system is shaped by the political needs of legislators. Legislators at all levels of government will seek to distribute governmental benefits for which they can claim credit and will shift governmental burdens to other levels of federal system.

3. FUNCTIONALTHEORY Identifies two main economic purposes of domestic government: • Developmental – programs providing physical and social infrastructure necessary to facilitate economic growth • Redistributive – programs reallocating societal resources from the ‘haves’ to ‘have-nots’

4. DEVELOPMENTAL FUNCTION • National government– primary responsibility for redistribution • State and local governments– primary responsibility for development: (a) Best equipped to design and administer because disciplined by market forces as well as political pressures (b) Each city or town is a laboratory where experiments are tried. If successful – copied by others; if fails, the experiment is soon abandoned

5. DISECONOMIES OF SCALE Not all local governments are equally efficient • The larger the governmental unit, the more costly service provision per person • The larger and the more centralized the governmental institutions, the more powerful are public-sector unions • Economic growth occurs more rapidly when service delivery is provided by a decentralized system of local government

6. GRANTS Block grants– designed to help state and local governments perform their developmental objectives. Equity block grants pose two difficulties: • Lack of the political capacity at national level to reallocate; • Reduced efficiency at the local level Categorical grants– used for redistributive purposes. Unlike block grants, they are accompanied by detailed regulations to make sure funds are used for the purposes for which they were intended.

7. NATIONALROLEINDEVELOPMENTPOLICY National government is the least efficient provider of development policies: • Operates under few market-like constraints • Tends toward uniformity • Some policies can only be performed effectively by the national government (health regulations, set of national standards on for example highways)

8. LOCUSOFTHEREDISTRIBUTIVEFUNCTION • Local governments are unable to redistribute wealth effectively because labor and capital are mobile in an economically and political integrated nation-state. • National government has the greatest capacity to engage in redistributive programs, because it can prevent the immigration of labor from foreign countries and can impose some constraints on capital flow.

9. ANEMPIRICALTHEORY Functional theory has been criticized for failing to specify the political processes by which policy is formulated. Response: • economic prosperity • officials elected to national offices must ascertain the politically appropriate degree of redistribution that the voting majority prefers • presidential elections • interest group activity

10. PREDICTIONS Functional Theory is optimistic about the future of American federalism. • Each level of government has appropriate set of responsibilities; • The system is capable of self-correction; • Inconsistencies and problems are temporary, not enduring

11. LEGISLATIVETHEORYI • Political incentives that shape the decision of policymakers induce them to make the wrong choices. • The national government takes on responsibilities it should best avoid. It imposes unaffordable tasks on lower levels of the system. • Assumes that preferences of presidents (and governors) have much less effect on domestic public policy than do preferences of the members of Congress (and state legislatures).

12. LEGISLATIVETHEORYII • Elected representatives’ primary goal is their own re-election • Constituents easily recognize spatially concentrated costs and benefits, but that spatially dispersed costs and benefits are less perceptible • Members vote for programs that provide a net fiscal benefit for their constituents.

13. LEGISLATORSANDREDISTRIBUTION • Legislators’ opinions about redistribution are strongly influenced by constituency pressure. • Geographical politics are likely to affect redistributive decisions less than developmental ones. • Surveys of public opinion indicate that spending for most types of redistributive spending is less popular than most kinds of developmental spending. • To avoid blame, legislators try to construct devices that help disguise the connection between their actions and the harms that occur.

14. A THEORY OF CHANGE In the late 1960s and early 1970s, several trends changed the nature of legislative politics: • The American voter paid less attention to partisan affiliation when voting for a member of Congress. • Members introduced changes in Congress that enabled them to capitalize on the opportunities the new technologies provide

15. CONCLUSION • Functional theory and legislative theory offer contrasting assessments of the health of the modern federal system. • According to functional theorists, the federal system is capable of adapting to the increasing integration of the American economy. Each level of government focuses on those responsibilities for which it is best adapted. • Legislative theory is much less optimistic.

16. The Role of Businesses in Defining the Public Policy Presentation by Khaled F. Sherif

17. INTRODUCTION This presentation: • Explains typology of political behavior of business and sources of business power; • Analyses political influence of firms in five countries, with more detailed focus on developments in the United States

18. TYPOLOGY OF POLITICAL BEHAVIOR OFBUSINESS I. Particularistic perspective(Carter, McConnell, and Lowi) –Firms promote a narrow conception of self-interests. II. Conflictual perspective: • Pluralists (Truman, Rose, Epstein, Dahl) – Firms and industries routinely find their interests to be divergent. • Relative autonomy neo-Marxists (Poulantzas, Offe) – Policies facilitating profit-making in one sector may introduce impediments in others, causing individual firms and sectors to oppose each other.

19. TYPOLOGY OF POLITICAL BEHAVIOR OF BUSINESS (CONT.) III.Unifying perspective: • Power elite theorists (Mills, Prewitt and Stone, Dye) – Leaders of major institutions hold a common worldview that leads to unity among corporations. • Ruling-class theorists (Domhoff) and Marxists (Milband) – Firms often begin with divided loyalties, but a variety of institutions and processes integrate business views into a coherent whole.

20. BUSINESSUNITY • Prechel and Akard– unified policy preferences develop when firms experience a common economic threat to profits. • Leviatan and Cooper, Vogel– the incidence of a policy’s benefits and costs across firms helps determine whether it becomes unifying.

21. UNIFYINGISSUESAREIDEOLOGICAL • Within the U.S. unifying issues fit cleanly into the liberal-conservative dimension of political struggles. Particularistic and conflictual issues cannot be neatly mapped into the ideological spectrum of left and right. • Ideological character means that: (a) House members, senators and presidents possess the ability to assess and respond to public opinion; (b) At the level of districts, states, and the nation, ideology can be clearly identified and measured.

22. UNIFYINGISSUESAREPARTISAN • In the U.S., two major parties focus more on winning elections than on upholding coherent policy stands • Neither party can dictate the behavior of officeholders who win elections by running under the party’s label. • Through their choices during elections voters affect the likelihood that unified business interests will later prevail in public policy.

23. UNIFYINGISSUESARESALIENT • During the legislative process, issues linked to a common business preference become visible to the public. • When a policy proposal attracts the same position from many different firms, it probably addresses questions of national importance that arose other parts of society as well. • By stimulating diverse groups to become involved, unifying issues entice journalists seeking interesting stories.

24. THESHIFT OF POLICY DECISIONS • Unifying issues manifest a high capacity for public guidance and limited potential for business control. • A unified business community would gain power, if it can shape public opinion at the early stages of the political process. • Corporate financed think tanks can affect public opinion.

25. SOURCESOFBUSINESSPOWER • Economic: politicians defer to the needs of business because of the critical connection between business activity and the public welfare • Ideological: the ability of business to define the terms of public debate • Political: Business enjoys disproportionate political influence because of its superior organizational and financial resources.

26. LINDBLOMS’VIEW • Corporations pose obstruction to political democracy • Market elites are granted special privileges: (a)In the national arena– tax concessions; the general reluctance to override market elite objections to broad policy issues on which entrepreneurs agree; (b)In municipal government– tax relief, other benefits (c)Over the globe–benefits offered to small nations permit them sometimes to overwhelm their governments by threatening to withdraw or indicating reluctance to invest.

27. THREESOURCESOFBUSINESSPOWER(IN RESPONSE TO LINDBLOM) • Control over capital investments Business power tends to diminish in importance when the economy is performing well and vice versa. Managers unlikely to slow down economy for political influence purposes.

28. THREESOURCES OF BUSINESS POWER(CONT.) • Ability to define the terms of public debate There is relatively little business can do to affect either the emergence or intellectual appeal of antibusiness ideologies, though it can mobilize to limit their policy impact. • Political activity What matters is not so much the degree of business political organization, but rather its relationship to the political strength and access of non-business forces.

29. CASESTUDY: GREAT BRITAIN The political influence – unstable • Mid-1960s – business began to lose influence; suffered a major erosion of political power during the 1970s; and increased its influence during the 1980s. • Business supports the Conservative Party; trade unions movement identified with the Labor Party – British elections provide a preliminary measure of changes in the relative political strength of businesses.

30. CASE STUDY: GERMANY Political fortunes of business – more stable • Business community has accepted the economic role and political influence of trade unions. Politics in the postwar period characterized by substantial cooperation between highly centralized business and labor associations • During later 1960s and early 1970s – public concern with environmental issues increased significantly and continued throughout the 1980s. • By the second half of the 1980s, environmental protection has ceased to be a partisan issue.

31. CASE STUDY: FRANCE Political power of business - stable • French economic planning is based on an alliance between the managers of large companies and senior civil servants. • Trade unions are weak in France. • Environmental movement less influential than that of any other major European country

32. CASESTUDY: JAPAN Political influence of business – most stable • Since 1960s – a conservative political party hold office continuously over the next three decades. • Business community extremely well organized • Business is so extensively consulted on policy decisions that affect it. • Unions enjoy less political influence. • Pollution control is an important priority for Japanese business.

33. CASESTUDY: THE U.S. The political influence – unstable • Two decades following the World War II– business occupied dominant position in national politics • Mid-1960s – political setbacks and expansion of government social regulation • Around 1970s – the American business community began to take Washington seriously • The 1980s – The social prestige of business improved dramatically. • End of 1980s - The image of business tarnished by a large number of scandals.

34. THE U.S.: FROM MARKET REGULATIONS TO PROCESS REGULATION • Until the 1960s– the characteristic government-business issue involved market regulation – rules specifying the conditions under which a firm could enter or remain in an industry. • By the mid-1960s– process regulation become the dominant mode. Process regulation specifies the ways in which the factors of production may be acquired or combined within a given firm.

35. THE U.S.: CHANGING POLITICAL ENVIRONMENT • In the 1950s the dominant form of corporate political representation was the trade association (the American Petroleum Institute for example) and the peak association (the Chamber of Commerce). • In the 1970s–firms formed ad hoc coalitions rather than relied on trade or peak associations. • In 1986– 100 firms had their own public affairs office in Washington, by 1982 – 2,445 firms had some form of representation

36. THE U.S.: CORPORATE TACTICS Contemporary corporate political representation combines new and old lobbying tactics. • Old insider tactics – drafting bills, supplying information, hosting receptions and meetings, etc. • New outsider tactics – telephone, letter-writing, and Fax-message campaigns; more artful use of television advertisements to carry its message. The use of money to finance election campaigns, especially to give money through political action committees (PACs)

37. THE U.S.: THE STRATEGIC NEEDS OF PARTICULAR INDUSTRIES • An accommodationist strategy – firms give many small contributions to a large number of incumbents with little regard to party or ideology. Examples: tobacco, drugs, broadcasting. • An adversarial strategy – to fund challengers, Republicans, and conservatives. Examples: mining, chemical manufacture)

38. THE U.S.: CORPORATE HEGEMONY • Element of truth in Lindblom’s position: Americans still support regulation and competition, government and markets. Capitalism is legitimate. • Turning Lindblom argument on its head: in those nations such as Germany and Japan, where business enjoys the greatest political privileges, it has the least legitimacy; in the U.S. where it enjoys the fewest privileges, it has the greatest legitimacy

39. STATE STRENGTH VS. BUSINESS POWER • Strong states (France and Japan) are better able to control access to the political process; they make it much more difficult for nonbusiness interests to become politically effective. The result is greater political stability, and hence greater business power. • In weak states (the U.S. and Britain), there is more opportunity for interest group activity, and hence business is less able to enjoy or maintain a privileged political position.

40. STATE STRENGTH VS. BUSINESS POWER (CONT.) • In a strong state with well-established coordinating mechanisms for managing government-business relations, the conflicts within the government would be pushed outside the government into the arena of political parties and social movements.

41. Nonprofit Advocacy and Political Participation Presentation by Khaled F. Sherif

42. INTRODUCTION Nonprofits strengthen democracy and help bring the norms and values of society to public decision-making. They engage people ‘outside’ and deliver services to varied constituencies. They serve as watchdogs of the other sectors and their own performance. This presentation describes the activities of nonprofits and the influence of laws and regulations on citizen participation and nonprofit advocacy.

43. NONPROFIT POLITICAL ADVOCACY • Politically active nonprofits contribute to democratic governance by representing civic concerns in policymaking, by enlarging opportunities for citizen participation in public decisions, and by creating accountability between government and citizens. • Some nonprofits, especially large ones, are consciously political.

44. REPRESENTATION • Through lobbying and communication, nonprofits provide representation for collective interests and values in civil society. • Nonprofit representation: (a) Opens political system to new voices (b) Gives many people a chance to have their issues heard

45. CITIZEN PARTICIPATION Nonprofits encourage political action among their members and other citizens, and offer opportunities for individuals to use their skills for civic and political purposes. • Personal networks motivate people to action • Engagement builds personal efficacy • Voting is the most common form of participation • American electoral politics discourages participation by many citizens

46. POLITICAL ACCOUNTABILITY Groups with constituencies that engage in political action affect what public officials hear; and what public officials hear contributes to what political business gets accomplished. Direct voice and votes are often poor people’s only political resources

47. TYPES OF NONPROFIT ADVOCACY ACTIVITIES Nonprofits engage in a wide range of advocacy activities. Organization building: • Building political resources: volunteers, money, facilities • Organizational policymaking • Internal educational activities • Research and monitoring activities

48. TYPES OF NONPROFIT ADVOCACY ACTIVITIES (CONT.) “Action”: Advocacy Nonprofits aim their efforts at various decision-makers in the following institutional settings: • Legislative advocacy • Grassroots advocacy • Public education and public opinion shaping advocacy • Electoral advocacy • Legal advocacy • Administrative or Agency Advocacy • Workplace, Corporate, Media, and International Advocacy

49. TYPES OF POLITICALLY ACTIVE NONPROFITS Neighborhood Associations and Community Organizations Weave neighbors together socially around local policy issues such as safety, streets, and recreation Religious Organizations Churches and religious groups – single largest association to which Americans belong Philanthropic Organizations Foundations are credited with a major role in the conservative ascendancy to national political prominence Policy Research Organizations (Think tanks)

50. TYPES OF POLITICALLY ACTIVE NONPROFITS (CONT.) • Issue and Value-Based Organizations Social welfare organizations engaged in advocacy on environmental taxpayer, arts, etc. issues; • Identity-Based Organizations(Veteran organizations) • Educational Institutions (Colleges and Universities) • Workplace Organizations (Unions) • Business and Trade Associations (The Chamber of Commerce) • Specially regulated Political Organizations (Political parties and PACs)