In the context of a re-examination of the conceptual and political foundations of merit/demerit goods, this paper attempts to identify how far they might take us in understanding, explaining, and providing normative justification for, public sector intervention. If merit/demerit influences are to be discovered in actual policies they must be capable of being isolated, at least at the margin, from other policy influences, such as conventional sources of market failure, pure paternalism, and pressure group activities.

One may wonder why political scientists would bother about the analysis of questions relating to rates of unemployment. In effect, should not this be part of economic science? Economists are generally seen as better equipped with theories on the micro and macro level to deal with issues regarding labour market performance, the development of employment and the explanation of volatile rates of unemployment and inflation. This view is held by the majority of the economic science guild and by many policy-makers.

During the 1960s and early 1970s, strong economic growth and highly expansionary income security policies led to considerable progress for the entire American population with respect to major income security goals. However, in the last fifteen years much of this progress has been either arrested or reversed, particularly for the non-aged, as economic growth slowed and income security policies ceased to expand and, in some cases, contracted. This retrenchment was the inevitable consequence of numerous phenomena which preceded, and were reinforced by the Reagan era. American income security policies are not likely to contract generally in the future, nor to resume expanding in a direction characteristic of many Western European welfare states. Rather, the prospects are for slow economic growth, higher targetting of programs by income in some areas, and marginal expansions requiring minimal new commitments of public resources in others. Major income security problems, especially among the lower income population, will remain.

Americans lack a sense of the state for many understandable historical reasons. Yet the specific organizational forms that state activities have taken in the United States from the time of the Constitution to the present have profoundly affected the social cleavages that have gained political expression and influenced the sorts of public policies that governments have – and have not – implemented. As an alternative or supplement to theoretical perspectives emphasizing the causal primacy of industrialization, national values, or class politics, this state-society perspective can illuminate patterns of American social policy, from distributive social benefits in the nineteenth century to bifurcations between social insurance and public assistance since the New Deal. These American policy patterns are contrasted with the more comprehensive and nationally uniform policies characteristic of certain Western European welfare states.

Advocates of pervasive social experimentation neglect to consider the effect that suchexperimentation might have on citizens' respect for the law and their inclination to obey it. Since habit plays a large part in law abidingness, frequent alterations in law, even when substantively justified on narrow policy grounds, weaken the power of law in general. Because of their great utility, we should use social experiments occasionally when they can shed light on crucial dimensions of truly important policy questions. But because pervasive experimentation threatens law abidingness and citizen support for the regime, we should decide against some otherwise justifiable experiments and neither expect nor wish for the sort of experimenting society advocated by many social scientists.

In most economically developed societies at present there is an active debate about the implications of the growing proportion of their populations who are elderly. In most such countries the changing age structure is seen in almost entirely negative terms. This paper argues for a less pessimistic approach. The transition to an older population will be gradual enough to allow time to plan. The importance of the shift in the so-called ‘dependency ratio’ is exaggerated because ‘dependency’ is unsatisfactorily defined. Nor is there clear evidence that as more people live to be older health and social service costs will rise accordingly: people are remaining fit to later ages and there is strong evidence that they can continue to make a positive contribution to the economy as workers and as consumers until relatively late ages. Social services can also be redesigned to maximize the independence of the elderly while minimizing costs. Since the ageing of society is unavoidable we should seek ways to treat the elderly as a resource rather than viewing them as a burden.

This article focuses attention on the distinctive characteristics of economic and social policy in West Germany during the last four decades. It will be argued, that the distinctiveness of state intervention in West Germany resides in a combination of policies of conversative-reformist, liberal and social democratic complexion. The policy of the middle way which results from this combination differs from the extreme poles that are marked by the model of Social-Democratic welfare capitalism on the one hand and market capitalism on the other, but it also comprises elements of both types of political economies. The emergence and the maintenance of the policy of the middle way can largely be attributed to distinctive characteristics of the policy process, and of processes of learning from historical catastrophes.

The paper aims at a more complete, yet still parsimonious, explanation of macro-economic policy failure and success during the ‘stagflation’ period of the 1970s. Focusing on four countries, Austria, Great Britain, Sweden and West Germany, it is shown that both runaway inflation and rising unemployment could be avoided whenever it was possible to achieve a Keynesian concertation between fiscal and monetary expansion on the one hand and union wage restraint on the other. The actual policy experiences of the four countries are then explained in terms of the linkage between a ‘coordination game’ played between the government and the unions in which macro-economic outcomes are determined, and a politics game in which the government tries to anticipate the electoral responses of different voter strata to these outcomes.

Terrorists act rationally; one of their dominating goals is to attract public attention to their cause. As a consequence, the authorities should refrain from attributing a particular terrorist incident to any one group. They should stress that many different actors must be considered as the possible perpetrators. Such an information policy sharply reduces terrorists'rewards. The terrorists are therefore likely to cut down on such activities or must undertake riskier acts, which increase their chance of being caught. The approach suggested is complementary to the policies currently in use; it does not make police measures unnecessary. The strategy is, however, active while the traditional approaches are passive responses to terrorist activities. In contrast to other anti-terrrorist measures, it does not violate human liberties, civil rights or the freedom of the press.

The paper looks at the outcomes of nuclear technology policies in five advanced Western industrialised countries which have developed major nuclear construction industries. The genesis, development and dissemination of thermal nuclear reactors is examined and found to be influenced by a range of non-technical factors. Various concepts of ‘political styles’ are explored. Different styles of technological development are identified with reference to the networks of actors relevant to the development of thermal reactor technology, taking particular account of the resources of different actors and their interrelationship. Three distinctive styles are found, associated with three different technological outcomes, two of which are associated with policy success. We conclude that political styles do make a difference, but that their applicability to the explanation of outcomes of technology policy is dependent on the resources of individual actors and the specific demands set by the technological, economic and political context.

This paper aims to redress the asymmetry in the standard economic treatment of the shortcomings of markets and governments by developing and applying a theory of ‘nonmarket’ failure– that is, of government failure – so that the comparison between markets and governments can be made more systematically, and choices between them arrived at more intelligently. Several conclusions are drawn. First, the choice between markets and governments is not a pure one, actual systems inevitably involve combinations between markets and governments. Second, with respect to both static and dynamic efficiency criteria, markets generally do better than governments. Third, there are various ways in which government can contribute to improving the functioning of markets. Fourth, market forces can play a useful role in improving the functioning of government and reducing the incidence of nonmarket failures.

In spite of a recently growing interest in corporatism as a political explanation of cross-national variations of economic performance and as a device for successful crisis management, there is little evidence that corporatism matters as a determinant of economic outcomes. Two kinds of corporatism – as a pattern of interest intermediation or industrial relations, and as a system of concerted public policy-making – are distinguished and tested with OECD data from the 1973 – 85 crisis. Little or no support for either corporatist explanation was found. Alternative perspectives of industrial relations, labour organisations, public policy concertation, state administration, and politico-economic institutions are discussed as offering more promising explanations of differences in governments’ responses to economic crisis.

Because employment is a problem of public policy, it involves elected politicians as well as economists designing policy instruments. The political appraisal of economic policies is necessary and often decisive in the selection of government policies. It first considers what we mean by saying that employment is a public policy problem. Secondly, it considers two attributes for appraising policies: political desirability, and economic effectiveness. In the third section alternative models of choice in conditions of uncertainty are presented, depending upon whether or not there is consensus among politicians about political desirability, and whether or not there is consensus among economists about the effectiveness of a policy. The concluding section considers conditions for integrating political and economic appraisals in government decision making.

French medicine is organised with dialectical relation between the public and private in health and welfare policy; there is also an ideological impact of public/private confrontation. The article retraces the history of the profession and shows how it was set up both with and against the state, emphasising two ideas at once: the idea of the small independent entrepreneur, guarantor of individual liberty, and the idea of the great state servant, guarantor of the public interest. Public/private confrontation is only rhetorical and bears no relation to the real content of the dualistic health system.

The quality of health care services has recently become a prominent political issue in both Britain and America. Everyone is in favour of quality. Yet closer inspection reveals that the term is being used with several different meanings, and that its fashionability seems intimately connected with the collision, in both countries, between rising health care costs and a desire on the part of the purchasers or paymasters of health services to restrict their expenditures. The different approaches to assessing quality are not neutral, technical matters. Each carries implications for the future relationships among health care providers, and between providers, payers and patients. Furthermore, changes in these institutional relationships may well lead the debate back to the larger, traditional and more obviously ‘political’ issues of resource allocation, equity and the role of the state.

Mancur Olson and Richard Zeckhauser's ‘An Economic Theory of Alliances’ has been described as ‘the best known application of the theory’ of collective (or public) goods. In that article, Olson and Zeckhauser advanced the claim that America's Western European Allies (and by implication, Japan as well) are all, more or less, ‘free riders.’ Yet, more than twenty years later, the meaning of this claim remains very much in doubt. This article outlines Olson and Zeckhauser's basic argument and conclusions and the evidence against their argument; explains how application of the ‘free rider’ thesis to the problem of collective security can be revised in the light of contemporary thinking about the provision of collective goods; presents some preliminary tests of this formulation; and suggests a few of the implications of this analysis for the formulation of United States defense policy.

A political-institutional explanation of the deteriorating labour market performance of the Netherlands during the economic crisis of the 1970s is suggested. By comparing the macroeconomic and labour market strategies of the Netherlands and full employment countries the economic feasibility of Dutch solutions to the unemployment problem is estimated. Dutch strategies turn out to have been of a fragile and contradictory character, while full employment countries could rely on rather coherent and consistent strategies. This difference in strategy-building is very likely a result of differences in the political-institutional structures of countries. The policy-making process in the Netherlands has been subject to political immobilism. Institutional ineffectiveness after the first oilcrisis, a balance-of-power situation, concertation without consensus and internal contradictions within the Christian Democratic party have resulted in the failure to control the labour market.