Advertisement

Discretion from an Economic Perspective

  • Dirk J. Wolfson
Chapter

Abstract

People are not alike. This chapter introduces a mode of situational contracting that deals with diversity, reveals preferences, and fosters trust in public policy. Professionals in implementing social policy submit periodic mandates for approval to their principals to use discretion in customizing benefits offered and matching efforts required from their counterparts. Transactions concluded reveal the trade-offs between criteria of good governance and suggest their acceptability. The process clarifies who does, pays for or gets what, when, where, how, and why, as the key issues in political intervention. Outcomes are monitored and provide feed-back for responsive policymaking. Evidence is provided from earlier applications.

Notes

Acknowledgements

The author is very grateful to Peter Cornelisse for many helpful comments on earlier drafts of this chapter.

References

  1. Agranoff, R. (2006). Inside collaborative networks. Ten lessons for public managers. Public Administration Review, 66, 50–56.CrossRefGoogle Scholar
  2. Alford, J. (2009). Engaging public sector clients: From service delivery to co-production. Oxford: Palgrave Macmillan.Google Scholar
  3. Besley, T. & Ghatak, M. (2005). Competition and incentives with motivated agents. American Economic Review, 95(1–2), 94–105.Google Scholar
  4. Breton, A. (1995). Organizational hierarchies and bureaucracies. European Journal of Political Economy, 11(3), 411–440.CrossRefGoogle Scholar
  5. Busuioc, E.M. & Lodge, M. (2016). The reputational basis of public accountability. Governance, 29(2), 247–263.Google Scholar
  6. Calmar Andersen, S. & Moynihan, D.P. (2016). How leaders respond to diversity: The moderating role of information use. Journal of Public Administration Research and Theory, 26(3), 448–460.Google Scholar
  7. Carson, S.J., Madhok, R. & Wu, T. 2006. Uncertainty, opportunism and governance: The effects of volatility and ambiguity on formal and relational contracting. Academy of Management Journal, 49(5), 1058–1077.Google Scholar
  8. Cornelisse, P.A. & Thorbecke, E. (2010). Exchange and development. Cheltenham: Edward Elgar.Google Scholar
  9. Culyer, A.J. (1980). The political economy of social policy. Oxford: Martin Robertson (1985).Google Scholar
  10. Culyer, A.J. (1985). Economics. Oxford: Basil Blackwell.Google Scholar
  11. Dur, R. & Zoutenbier, R. (2014). Working for a good cause. Public Administration Review, 74(2), 144–155.Google Scholar
  12. Euwals, R., de Mooij, R. & van Vuren, D. (2009). Rethinking retirement. The Hague: CPB.Google Scholar
  13. Fenger, M., van der Torre, L. & van Twist, M. (2011). Uitvoeren naar vermogen [Implementation customized for capabilities]. Nijmegen: VOC Uitgevers.Google Scholar
  14. Hennipman, P. (1995). Welfare economics and the theory of economic policy. Aldershot: Edward Elgar.Google Scholar
  15. Hupe, P.L. (2011). The thesis of incongruent implementation: Revisiting Pressman and Wildavsky. Public Policy and Administration, 26(1), 63–80.CrossRefGoogle Scholar
  16. Johnson, T. (1972) Professions and power. London: MacmillanGoogle Scholar
  17. Just, R.E., Hueth, D. & Schmitz, A. (2004). The welfare economics of public policy. Cheltenham: Edward Elgar.Google Scholar
  18. Kahneman, D. (2000). Choices, values and frames. Cambridge: Cambridge University Press.Google Scholar
  19. Kahneman, D. (2012). Thinking, fast and slow. London: Penguin Random House.Google Scholar
  20. Koppenjan, J. & Klijn, E.-H. (2004). Managing uncertainties in networks. London: Routledge.Google Scholar
  21. Lipsky, M. (1980). Street level bureaucracy. Dilemmas of the individual in public services. New York: Russell Sage Foundation.Google Scholar
  22. Maskin, E.S. (2008). Mechanism design. How to implement social goals. (Nobel Lecture). American Economic Review, 98(3), 567–576.CrossRefGoogle Scholar
  23. Milanovic, B. (2016). Global inequality. A new approach for the age of globalization. Cambridge: The Belknap Press.Google Scholar
  24. Noonan, K.G, Sabel, C.F. & Simon, W.H. (2009). Legal accountability in the service-based welfare state: Lessons from child welfare reform. Law & Social Inquiry, 34(3), 523–568.Google Scholar
  25. Obama, B. (2016). The way ahead. The Economist, October 8th.Google Scholar
  26. Putnam, R.B. (2015). Our kids. The American dream in crisis. New York: Simon and Shuster.Google Scholar
  27. Putters, K. (2017). Was getekend. Op weg naar een vernieuwd sociaal contract in de zorg (with English summary). Inaugural Lecture, Erasmus University Rotterdam.Google Scholar
  28. Scott, T.A., Thomas, C.W. (2016). Unpacking the collaborative toolbox: Why and when do public managers choose collaborative strategies? Policy Studies Journal (early view).Google Scholar
  29. Sen, A.K. (1985). Commodities and capabilities (Hennipman Lecture). Amsterdam: North-Holland Publishing Company.Google Scholar
  30. Sen, A.K. (2009). The idea of justice. London: Allan Lane.Google Scholar
  31. Sent, E.M. (2004). Behavioral economics: How psychology made its (limited) way back into economics. History of Political Economy, 36 (4), 735–760.CrossRefGoogle Scholar
  32. Simon, H. (1976). From substantive to procedural rationality. In S. Latsis (Ed.), Method and appraisal in economics (pp. 129–148) Cambridge: University Press.Google Scholar
  33. Smith, A. (1759). The theory of moral sentiments (250th Anniversary Edition), with Introduction by A.K. Sen. London: Penguin Books.Google Scholar
  34. Stiglitz, J.E. (2002). Information and the change in the paradigm of economics (Nobel Lecture). American Economic Review, 92, 460–501.CrossRefGoogle Scholar
  35. Thaler, R.H. (2015). Misbehaving: The making of behavioural economics. New York: W.W. Norton.Google Scholar
  36. Tummers, L.G. & Bekkers, V. (2014). Policy implementation, street-level bureaucracy and the importance of discretion. Public Management Review, 16(4), 527–547.Google Scholar
  37. Van Slyke, D.M. (2007). Agents or stewards; using theory to understand the government-non-profit social service contracting relationship. Journal of Public Administration Research and Theory, 17(2), 460–501.Google Scholar
  38. Wolfson, D.J. (2010). Dreaming about a properly informed democracy. In R.J. In’t Veld (Ed.), Knowledge democracy: Consequences for science, politics and media (pp. 37–48). London: Springer.CrossRefGoogle Scholar
  39. Wolfson, D.J. (2012). Situational contracting: Building reciprocity between rights and obligations. Governance, 25(4), 661–685.CrossRefGoogle Scholar
  40. Wolfson, D.J. (2015). Implementing fairness in social policy. Journal of Human Development and Capabilities, (16), 272–286.CrossRefGoogle Scholar
  41. Wolfson, D.J. 2019). Diversity and situational contracting in public governance (paper under review).Google Scholar
  42. Yew-Kwang, N. (1979). Welfare economics: Introduction and development of basic concepts. Basingstoke: Macmillan.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2020

Authors and Affiliations

  • Dirk J. Wolfson
    • 1
  1. 1.Erasmus University RotterdamRotterdamThe Netherlands

Personalised recommendations