Iron Triangle: agency + committee + interest group — all benefit each other
Iron Triangle
Three actors who dominate policy in any given area
Congressional committee writes the law. Executive agency implements it. Interest group lobbies for it and provides expertise. Each benefits the others — a closed, self-reinforcing loop.
Legislative Process
How a bill becomes law: committee → chamber → conference → President
Legislative Process
The path from bill introduction to presidential signature
Introduced → committee → full chamber vote → other chamber repeats → conference committee if versions differ → President signs or vetoes → 2/3 override needed.
Administrative Agencies
Regulatory agencies are quasi-legislative, quasi-judicial, and executive all at once
Administrative Agencies
Federal agencies combine all three governmental powers
They make rules (legislative), enforce them (executive), and adjudicate disputes (judicial). Examples: EPA, SEC, FDA, FCC. Criticized for combining powers the Constitution separates.
Cost-Benefit Analysis
Cost-benefit analysis: weigh all costs and benefits to find the most efficient policy
Cost-Benefit Analysis
The standard tool for evaluating whether a policy is worth it
Add up all expected benefits (in dollar terms), subtract all expected costs. If benefits > costs → implement. Criticized for difficulty of monetizing non-market goods (human life, environment). Required for major federal regulations.
Agenda Setting
Agenda setting: media and interest groups determine what issues government addresses — first step of policy
Agenda Setting
How issues get onto the government's to-do list
Kingdon's streams model: problems stream (conditions become problems), policy stream (solutions exist), politics stream (political will) must converge to open a 'policy window.' Issue salience: media coverage → public attention → political pressure. Crises open windows: 9/11 → Homeland Security, financial crisis → Dodd-Frank.
Incrementalism
Incrementalism: policy changes happen in small steps, not revolutionary leaps — status quo has enormous power
Incrementalism
Why radical policy change is rare — even when desired
Lindblom: policymakers lack information and time for comprehensive analysis → make small adjustments to existing policy (muddling through). Status quo bias: existing programs have organized beneficiaries who defend them. Sunk costs: previous investments make change harder. Path dependence: early choices constrain later options.
Regulatory Capture
Regulatory capture: regulated industries gain control of the agencies that regulate them
Regulatory Capture
When the regulator starts serving the regulated
Stigler's capture theory: over time, regulated industries use resources and expertise to influence regulatory agencies. Revolving door: agency staff move to industry jobs and vice versa. Industry has more sustained interest in regulatory decisions than dispersed public. Result: regulations serve industry interests rather than public interest.
States as Policy Laboratories
Federalism and policy: states as laboratories of democracy — policy experiments spread nationally
States as Policy Laboratories
How federalism enables policy innovation
Brandeis called states 'laboratories of democracy.' Policy innovations often start in states before going national: Massachusetts healthcare → ACA, California auto emissions standards, state minimum wage experiments. Race to the bottom: states may cut regulations to attract business. Race to the top: states compete to attract talent with better services.
Public Goods
Public goods: non-excludable + non-rival. Free rider problem → government must provide them.
Public Goods
Why markets underprovide certain goods — requiring government intervention
Non-excludable: can't prevent people from using it (national defense, clean air). Non-rival: one person's use doesn't reduce availability for others. Free rider problem: if can't exclude, people won't pay voluntarily → market won't produce enough → government must provide and fund through taxes.
When markets fail to account for effects on third parties
Negative externality: cost borne by third parties not in the transaction. Market overproduces → Pigouvian tax, cap-and-trade, regulation to internalize cost. Positive externality: benefit flows to third parties. Market underproduces → subsidy, public provision. Education: benefits beyond the individual → subsidized.
Policy Implementation
Implementation gap: what policy says vs what actually happens on the ground — street-level bureaucrats
Policy Implementation
The gap between policy intent and policy reality
Lipsky's street-level bureaucrats: teachers, police, social workers exercise significant discretion implementing policy. Implementation failure: unclear mandates, inadequate resources, multiple veto points, principal-agent problems. Top-down model: central control. Bottom-up: local actors adapt policy to context.
Policy Evaluation Criteria
REIA — Results, Efficiency, Impact, Adequacy
Four criteria for evaluating whether a public policy is working
Good evaluation asks if the program worked, at what cost, for whom, and whether the problem is solved
Effectiveness: did the program achieve its stated goals? Efficiency: at what cost per unit of outcome — could resources be better used? Equity: who benefits and who bears costs — are effects distributed fairly? Adequacy: even if effective, is the magnitude of change sufficient to solve the problem? Political feasibility is the real constraint on technically good policies.
Formative
Evaluation during implementation — improve as you go
Summative
After program — did it work? Continue or cut?
RCT
Randomized control trial — gold standard for causal evidence
Regulatory Approaches
CASE — Command, Attention to incentives, Self-regulation, Economic instruments
Four approaches to regulation — from direct mandates to market-based tools
Governments can command behavior directly or use prices and incentives to change it indirectly
Command-and-control: set standards and enforce with penalties — most common (Clean Air Act). Economic instruments: taxes on negative externalities (carbon tax), subsidies for positive externalities, tradeable permits (cap-and-trade). Information: require disclosure (nutrition labels, financial disclosures). Deregulation: markets more efficient where failures are minor.
Command
Set standard, inspect, penalize — EPA and OSHA model
Market
Carbon tax or cap-and-trade — price the externality
Capture
Regulated industry controls regulator — reduces effectiveness
Lowi's Policy Typology
Distributive = everyone gets, Redistributive = take from some give to others
Different policies create different political conflicts and coalitions
Redistributive policies are the most politically contentious because someone visibly loses
Distributive: benefits spread widely, costs diffuse — low conflict, logrolling, pork barrel (farm subsidies, highway spending). Redistributive: take from one group to give to another — high conflict, class politics (welfare, progressive taxation, Medicaid). Regulatory: impose costs on specific groups to benefit public — interest group conflict. Constituent: organize government itself.
Distributive
Pork barrel — everyone gets something, logrolling
Redistributive
Class conflict — zero-sum, ideologically charged
Regulatory
Concentrated costs, diffuse benefits — interest group battles
Iron Triangle
CCA — Congress, Client groups, Agency — a closed loop of mutual benefit
Congressional committees, interest groups, and agencies protect each other
Iron triangles explain why inefficient policies persist — three actors mutually protect each other from outsiders
Congressional subcommittee: controls funding and oversight of agency. Interest group: funds campaigns, provides votes and information, lobbies committee. Agency: implements favorable policy, provides jobs via revolving door, provides information to committee. Each protects the others — president and public have difficulty breaking in. Issue networks: looser, more open modern version.
Congress
Controls budget and oversight — gets campaign money and info
Agency
Implements policy — gets budget and friendly oversight
Interest group
Gets favorable policy — provides votes and revolving door jobs
🎓 Common Exam Questions
Q: Explain Kingdon's multiple streams model of policy agenda-setting.
A: Kingdon's model explains why some issues get on the government's agenda while others do not. Three streams flow independently of each other: Problem stream — conditions become recognized problems when there is a focusing event or crisis, systematic indicators show deterioration, or feedback from existing programs reveals failure. Policy stream — policy communities of researchers, interest groups, and bureaucrats develop solutions that survive selection for technical feasibility and value acceptability. Political stream — national mood, interest group campaigns, election results, and government turnover. Policy windows open when all three streams converge, usually opened by changes in the political stream or dramatic focusing events. Policy entrepreneurs invest resources to couple the streams and must act quickly because windows close fast.
Q: What is cost-benefit analysis, when is it appropriate, and what are its limitations?
A: CBA identifies all costs and benefits of a policy, assigns monetary values, discounts future flows to present value, and recommends adoption if the net present value is positive. The Kaldor-Hicks criterion holds that winners' gains exceed losers' losses even if compensation is not actually paid. Uses: required for major federal regulations by OIRA, infrastructure projects, and environmental rules. Limitations: valuing non-market goods like a human life or an ecosystem is contested — the Value of Statistical Life approach is used but controversial. Distributional concerns are ignored by default — CBA tells us total welfare but not who gains and who loses. High discount rates systematically undervalue future benefits, creating a bias against long-term investments like climate policy. Costs tend to be easier to quantify than diffuse benefits, creating bias against regulation.
Q: What is implementation and why do policies so often fail during it?
A: Implementation is the process of putting policy into practice through bureaucratic and administrative action. The implementation gap is the difference between policy as designed and policy as actually delivered. Pressman and Wildavsky showed that even seemingly simple programs fail because each approval in multi-actor systems multiplies failure probability dramatically. Top-down causes of failure: ambiguous legislation, inadequate resources, poor program design, hostile implementers, and changing political environment. Bottom-up perspective from Lipsky and Hjern shows street-level bureaucrats adapt policy to local conditions — implementation is itself a form of policy-making. Strategies to improve: clear objectives, adequate resources, fewer veto points, motivated implementers, adaptive management with feedback loops, and sustained political support throughout.
Q: What are market failures and what policy responses are appropriate for each type?
A: Market failures justify government intervention. Externalities: costs or benefits not captured in price — negative externalities like pollution call for taxes or cap-and-trade; positive externalities like education and research call for subsidies. Public goods: non-excludable and non-rival causing free-rider problems and underprovision — government provision is the response for national defense and basic research. Information asymmetry: adverse selection and moral hazard in insurance markets — disclosure requirements, regulation, and mandatory participation address these. Natural monopoly: declining average costs make a single firm most efficient but creates market power — regulate price and service or consider public ownership. Common pool resources face the tragedy of the commons — Ostrom showed community governance often works better than privatization or state control.
Q: What is the difference between policy design and politics in the policy process?
A: Policy design is the technical process of identifying problems, developing alternatives, analyzing tradeoffs, and selecting instruments through cost-benefit analysis, program evaluation, and operations research. Politics is the struggle over who gets what, when, and how — involving interest groups, elections, ideology, and coalition building. Tensions are constant: technically optimal policies often fail politically while politically feasible policies may be technically flawed. Politicians engage in blame avoidance — preferring policies where costs are hidden, diffuse, and delayed while benefits are visible and concentrated before elections. Policy legacies create constituencies that resist change even when programs are inefficient — path dependence is powerful. Political feasibility is a binding constraint on policy design, not a separate consideration to be addressed afterward.