Comparative Public

Administration

INTRODUCTION

Central Questions
What is the role of government in the

development process across nations?

What is the role of the market in the
development process?
How are collective decisions made?
What is the right balance between the
government and the market?
How are the private and public interests
balanced?

DEVELOPMENT AGENTS
GOVERNMENT

Bureaucracy
MARKETS

SOCIETY

Government Functions
The Government undertakes seemingly

contradictory functions such as promoting

efficiency and equity, growth and
redistribution.
The Government is also perceived as the
agent in charge of balancing the public and
private interests.
The Government also faces the dilemma of
being proactive or adopting a laissez faire
approach.

Governments Role
FACILITATOR: Overcoming bottlenecks that

hinder the development of a market economy

by investing in physical and social
infrastructure.
ACTIVIST: Complementing or competing
with markets in the provision of goods and
services
THE MANAGERIAL GOVERNMENT:
Administering the macroeconomic variables
for the market to operate efficiently.

The Market
The market is an allocation mechanism.
Prices in the market reflect the opportunity

costs of producing goods and services.

The market is the best mechanism to avoid
shortages or surpluses of goods and
services.
The market offers choices to people.

Societys Goal
We the people of the United Governments, in

order to form a more perfect Union, establish

Justice, insure domestic Tranquility,
provide for the common defense, promote the
general Welfare, and secure the blessing of
Liberty to ourselves and our Prosperity, do
ordain and establish this Constitution

MARKET & GOVERNMENT

The Government as a solution to market
failures
Public goods (education, law, etc.)
Externalities (positive and negative)
Monopolies
Asymmetric information
2. The Government as replacement or
substitute of the market
1.

GOVERNMENT & SOCIETY

1.

LEGITIMATE REPRESENTATION

Democratic
Undemocratic

2.

REDISTRIBUTION & GROWTH

Fiscal policy
Laws (protect safety, health, welfare, morals, etc.)

2.

SAFETY NET

Social security
Welfare programs

MARKETS & SOCIETY

1.

THE NEO-CLASSICAL PERSPECTIVE

The market is the best method for society to
reveal its tastes and preferences to obtain
goods and services
The individual is perceived as a factor of
production (labor)
The market rewards each member of society
according to his contribution to the economy
The relationship is a positive-sum-game

THE CIRCULAR FLOW MODEL

HOUSEHOLDS

GOODS
MARKET

GOVERNMENT/
BUREAUCRACY

BUSINESSES

FACTOR
MARKET

MARKET & SOCIETY

2.

THE KEYNESIAN PERSPECTIVE

Society is perceived as an aggregate
demand function (consumers)
Aggregate demand is the most important
factor of economic growth
Welfare is needed to mantain aggregate
demand (multiplier effect)

MARKETS & SOCIETY

3.

THE MARXIST PERSPECTIVE

The relationship between markets (capital)
and society (labor) is a negative-sum game
Markets de-humanize society
Markets are socially constructed
The government is an agent of capital