Compose an essay of no less than 500 words discussing the topics covered in this unit
PUA 5305, Public Finance and Budgeting 1 Cou rse Learning Outcomes for Unit II Upon completion of this unit, students should be able to: 4. Identify political factors that influence and determine financial management practice in the public arena. 4.1 Explain public goods and their characteristics. 4.2 Summarize Arrow’s impossibility theorem and how it can be used in the political process. Re quired Unit Resources Chapter 4: Public Goods Chapter 5: Public Choice and the Political Process In order to access the following resource, click the link below. Watch the following segments from the full video referenced below: Public Goods a nd Responsibilities: How Far Should We Go (Segment 1 of 13) , Government Intervention in Free M arket (Segment 2 of 13) , and Public Goods in a Private Market Economy (Segment 4 of 13) . Educ ational Film Center (Producer). (2012). Public goods and responsibilities —Economics U$A 21 st century edition [Video file]. Retrieved from https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=https://fod.infobase.com/PortalPl aylists.aspx?wID=273866&xtid=113433 The transcript for this video can be found by clicking the “Transcript” tab to the right of the video in the Films on Demand database. Unit Lesson Government operations function similar to a business when it comes to the production of a good. However, distribution and consumption of government produced goods is different from those distributed and consumed by the private sector in that the goods in the private sector are not rationed. Examples of public goods include public health, public recreation, public education, roads and bridges, and public safety. As ind icated previously , private goods are supplied through markets (Hyman, 2014). In contrast, government supplies public goods through various political institutions. Government agencies or organizations (political institutions) produce legislat ion , reduce con flicts, and provide basic services to citizens. Public goods assume a two -dimensional characteristic: non -excludable and non -rival (Asllani, White, & Ettkin, 201 2). A non -excludable good is a good that can be enjoyed by anyone, even those who refuse to pa y for it (Hyman, 2014). A non -rival good is one that can be enjoyed by more than one individual without decreasing the amount for others (Hyman, 2014). For examp le, a large number of consumers or beach -goers can enjoy the beach without keeping others from also enjoying the beach. In addition, the amount of time one individual occupies the beach does not prevent the other from enjoying the same length of time or even longer. UNIT II STUDY GUIDE Political Institutions and Public Goods PUA 5305, Public Finance and Budgeting 2 UNIT x STUDY GUIDE Title Let’s consider beach access. Most beaches are considered public spaces or common areas. However, maintaining the beach is a part of government’s role . Beach erosion happens as a result of natural disasters. The landscape s along some coastal areas in the United States are drama tically impacted by hurricanes (Carpenter, 2013). Reflecting on the results of natural disasters allows us to focus on public services or goods provided by the political institution known as the Federal Emergency Management Agency (FEMA). This agency esta blishes the process through which assistance to society is delivered in the event of a natural disaster. For example, communities affected by Hurricanes Camille, Andrew, or Katrina experienced uprooted trees as well as property on roadways. These communiti es needed financial assistance to clean up and restore their areas. Therefore, one impact of these disasters requires removing materials and debris from streets and public areas of affected communities as the debris and materials can cause safety hazards (Cairnie, Coor, & DeVinney, 2015). Consider the Federal Communications Commission (FCC) , which is a political institution that regulates the emergency 911 system. This service has been the traditional medium for accessing public safety resources such as fi re, police, medical assistance, and ambulance service via telephone. Prior to the establishment of 911, citizens who were in need of lifesaving assistance from community agencies had to access a different seven -digit phone number for each respective servic e. However, the government established a public safety answering point (PSAP) with a single , central number , nationwide. This created 911 as the universal number that people utilize in which a dispatcher assigns the appropriate first responder to t he emerg ency (W ilshusen, 2014). Let’s continue our focus on the emergency 911 system and factor in the widespread communication tool of texting , a non -voice medium. Until recently, the 911 system was not equipped to receive non -voice notifications. This prompted federal and state authorities to create the Next Generation Emergency 911 (NG911) (Holloway & Seeman, 2012). Today’s digital society expects government to provide this capability to speech -disabled citizens as well as all other citizens. In 2014 an undisclosed man from Texas was documented as the fourth person in the United States to die from a brain disorder believed to be cause d by consumption of beef products contaminated with mad cow disease (Associated Press, 2014). Political institutions such a s the Center s for Disease Control and Prevention (CDC) and the Federal Drug Agency (FDA), often referred to as America’s publi c health agencies, monitor public health dangers such as mad cow disease. This disease threatens the hamburger industry , which is very popular throughout the United Sates. Have your ever considered who monitors outbreaks such as Ebola? This disease created a paralyzing fear domestically and internationally and is monitored by the CDC. Other public safety institutions include the Nat ional Institute s of Health (NIH) , which collaborated with researchers on the analysis of the first cured HIV -infected child in Mississippi (N IH, 2013). The NIH’s mission is to seek fundamental knowledge about the nature and behavior of living systems and t o apply that knowledge to enhance health, reduce illness and disability, and lengthen life . In 201 4, NIH confirmed that levels of HIV of the Mississippi infant were now traceable (N IH, 201 4). Let’s shift our focus to the Department of Economic and Community Development , which implements strategies to help businesses grow and succeed . Community sidewalks are distinct public spaces (Ehrenfeucht & Loukaitou -sideris, 2010). Sidewalks provide a means of safe transportation for neighborhoods and improve p ublic safety. Other political institutions such as the Federal Highway Administration monitor bridges. Many of you may recall the collapse of an interstate highway bridge in Minnesota in 2007. In the Daytona Beach, Florida (Mrmiscellanious~commonswiki, 2005 ) PUA 5305, Public Finance and Budgeting 3 UNIT x STUDY GUIDE Title United States, the Federal Highway Administration estima tes around 153,000 of the 590,000 bridges are structurally deficient or functionally obsolete (U.S. infrastructure, 2007 ). Hyman (2014) discusses a possible utopian society where efficiency can be achieved in smaller groups through a cooperative method re ferred to as the Lindahl equilibrium . This method suggests members would voluntarily pool their resources equally to enjoy luxury or desired goods. However, according to Hyman (2014), goods with benefits that cannot be withheld from those who do not pay an d are shared by large groups of consumers give rise to an externality known as the free -rider problem. This occurs when a person benefits from a good without contributing to the cost or paying for it. In this case, market failure happens because of the ext ernality. Therefore, public goods corresponding to safety require a collective effort from federal, state, and local government organizations. Providing this good requires financing through taxes and demonstrates the role of government’s attempt to create market efficiency as indicated in the previous unit. Creating market efficiency depends upon government’s view of social optimality. Government assesses the public’s demand and evaluates the quantity needed as well as the cost to supply it. Chapter 5 emp hasizes public choice and how political institutions are formed. Hyman (2014) tells us that public choice is made during the election process. Hyman (2014) suggests that citizens’ choices are influenced by the desired public good. Hence, regardless of the ideology, society selects the candidate that is most likely to supply the benefit or good to the satisfaction of citizens. Therefore, Arrow’s impossibility theorem suggests that voters often utilize a ranking system when casting their vote (Hyman, 2014).