Writing assignment 9 - PA 315

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PA 315
GOVERNMENT BUSINESS RELATIONS
CHAPTER 1

California State University San Bernardino

College of Business & Public Administration

Professor Sharon Pierce

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DEFINING GOVERNMENT-BUSINESS RELATIONS

Business Government relations –

how the public and private sectors interact in their numerous complementary, cooperative, and conflicting roles.

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RELATIONSHIP BETWEEN GOVERNMENT AND BUSINESS

https://iedunote.com/government-business-relationship

Government = ensure economic stability and growth vs. Private Business = profit

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GOVERNMENT BUSINESS RELATIONS

  • Major factors shaping the relationship:
  • Mix of strategies used for implementation of public policy
  • Monetary policy
  • Fiscal policy
  • Amount of government protection of society’s most vulnerable
  • The amount of promotion of the business sector domestically
  • The influence of the private sector on government policy making and administrative actions

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MIX OF STRATEGIES USED FOR IMPLEMENTATION OF PUBLIC POLICY

  • government ownership
  • partial ownership (government corporations or government backed corporations or state-owned enterprises)
  • public- private partnership (P3s)  is a contractual arrangement between a public agency (federal, state or local) and a private sector entity – which the government has been using a great deal more in the several administrations
  • contracting out - These types of activities include contracting out with for-profit vendors, non-profit organizations, and local government agencies from other jurisdictions to continue the delivery of public goods and services
  • procurement – secures purchases
  • tax incentives
  • regulations

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MONETARY POLICY

FISCAL POLICY

  • Fiscal Policy -  is considered any changes the government makes to the national budget in order to influence a nation's economy.
  • Trump - Tax Cuts and Jobs Act
  • Obama – in 2010 – the affordable care act
  • Bush – in 2008 – create policies to counteract the 2008 financial crisis
  • Clinton – 1996 he cut spending the TANF program or what was considered welfare
  • Reagan – Reaganeconomics – he based his policies on the theory of supply side economics that says increased production drives economic growth – tax cuts and deregulation
  • Gives incentives to businesses to expand while removing restrictions to encourage growth

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WHY GOVERNMENT AT ALL?

  • The need for government, however, does not mean that government itself cannot
  • Underperform
  • Perform very badly
  • One purpose of this class: provide tools for fair analysis of success and weakness of government in general, and the role it plays with its roles with business.

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WHY GOVERNMENT AT ALL?

  • Hobbes: Without government life would be “continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.”
  • What government does, in the modern world is enormous and its contribution is indisputable. Can you imagine a world in which…
  • All airplanes have “flyer beware signs” because there are no safety regulations, except there would be no one to enforce such signage!
  • All roads would be private roads and most would be toll roads!
  • You would need to pay for fire protection or the fire truck would not put out your fire (as it was in colonial times)! And so on.

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DEBATE ABOUT THE ROLE AND SIZE OF GOVERNMENT

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HISTORICAL BACKGROUND ON GOVERNMENT

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TWO DISTINCT INTELLECTUAL TRADITIONS

  • Adam Smith
  • The Market-oriented tradition
  • Government lacking the qualities
  • Nonintervention by the state
  • Freely operating markets.
  • Alexander Hamilton
  • The active government tradition
  • Associated with mercantilism
  • Government controlling all aspects of economic activity
  • Aiding fledging industries by providing economic assistance and tariff protection.

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LAISSEZ-FAIRE VERSUS ACTIVIST GOVERNMENT APPROACHES

  • Laissez-faire: “leave it alone” or less government is better
  • Adam Smith
  • Hayek Milton Friedman (Supply side economics)
  • Best examples today: Anglo-countries, Switzerland, Singapore

Mercantilism: more activist approach

Alexander Hamilton

Keynes (Keynesian economics, e.g., countercyclical spending, social and physical infrastructure, etc.)

Today seen somewhat in corporatist economies of East Asia (i.e., strong state involvement)

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THE RELATIVE SIZE OF GOVERNMENT

RELATIVE SIZE: EMPLOYEES (ABSOLUTE NUMBERS)

Local government employees – almost 24 million

State Government employees – almost 8 million

Federal government employees – about 2 million

Local government employees – almost 24 million

State Government employees – almost 8 million

Federal government employees – about 2 million

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WHY IS OUR GOVERNMENT DEBT GROWING?

  • Complex societies place greater demands on government
  • Wars and other national calamities
  • Many special interests are successful in finding a place in the public sphere over time.

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LIMITS OF GOVERNMENT EXPANSION

  • The natural aversion to taxes is seemingly universal.
  • As governments become larger and occupy more of the economy, the more they can become political targets if they are not successfully managed.

THE MOST BASIC ROLES OF GOVERNMENT

  • Defense
  • Public safety

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8 GOVERNMENT-BUSINESS ROLES

  • Fiscal structure
  • Regulator
  • Safeguard against risks
  • Provider of infrastructure
  • Purchaser
  • Social architect
  • Service provider
  • Promoter of business

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THE GOOD, THE BAD, AND UGLY OF GOVERNMENT

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THE GOOD… (GENERALLY STRENGTHS)

  • Providing a stable financial system
  • Providing a social contract for a stable society
  • Public welfare
  • “The commons”: shared goods like roads
  • International and domestic safety
  • Reducing risk
  • Shared social infrastructure, e.g., K-12 education

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THE BAD… (GENERALLY WEAKNESSES)

  • When governments take over areas completely and become monopolies (or dictatorships)
  • Government corruption
  • When government takes on too much and gets over-extended
  • Becoming excessively complex, e.g., tax code
  • Dealing with special interests over time
  • Inefficiency over time

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THE UGLY… (IMPORTANT THINGS THAT GOVERNMENT DOES BUT EITHER ARE NOT UNDERSTOOD OR APPRECIATED)

  • Taxes: necessary but hated (excessive taxes are bad but then we must decide what “excessive taxes” means)
  • Foreign aid (example of necessary item that is hated)
  • Government doing the unpleasant jobs, like prisons

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AMERICAN GOVERNMENT INSTITUTIONS

How many governments do we have in the United States of America?

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# OF GOVERNMENTS IN US

WHAT DOES THE FEDERAL
GOVERNMENT DO?

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WHAT ABOUT CALIFORNIA STATE GOVERNMENT?

WHAT ABOUT CALIFORNIA LOCAL GOVERNMENTS?

BIG GOVERNMENT
VS.
SMALL GOVERNMENT –

WHICH IS IDEAL FOR THE UNITED STATES?

FACTORS AFFECTING THE ROLE AND SIZE OF GOVERNMENT

  • 1. Population Density – government grows larger as the population grows larger
  • 2. Size and Complexity of the Economy – in the US – early 20th century less industrialized and more agriculture
  • 3. Interaction with Other Countries - globalization
  • 4. Social Goals and Beliefs – basic needs of food, shelter, and clothing need to be met. Also – employment, good schools, retirement

The role, reach, and impact of government is directly affected by a range of factors:

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WHAT IS THE IDEAL GOVERNMENT?

  • QUESTION –
  • What do you believe is the ideal role of government?

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HOPE YOU ALL HAVE A GREAT WEEKEND!

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