THE FLORIDA STATE UNIVERSITY COLLEGE OF SOCIAL SCIENCES AND PUBLIC POLICY →
THE FLORIDA STATE UNIVERSITY COLLEGE OF SOCIAL SCIENCES AND PUBLIC POLICY →
THE FLORIDA STATE UNIVERSITY COLLEGE OF SOCIAL SCIENCES AND PUBLIC POLICY POLICY DECISION MAKING FOR TRANSPORTATION INFRASTRUCTURE: THE CASES OF HIGH SPEED RAILS IN THE U.S. By HEEJAE LEE A Dissertation submitted to the Reubin O’D. Askew School of Public Administration and Policy in partial fulfillment of the requirements for the degree of Doctor of Philosophy Degree Awarded: Fall Semester, 2012 P R E V I E W
All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, MI 48106 - 1346 UMI 3551153 Published by ProQuest LLC (2013). Copyright in the Dissertation held by the Author. UMI Number: 3551153 P R E V I E W
ii HeeJae Lee defended this dissertation on July 25th , 2012. The members of the supervisory committee were: Robert J. Eger III Professor Directing Dissertation Randall G. Holcombe University Representative Frances S. Berry Committee Member KeonHyung Lee Committee Member The Graduate School has verified and approved the above-named committee members, and certifies that the dissertation has been approved in accordance with university requirements. P R E V I E W
iii I dedicate this dissertation to my present family and my future family. P R E V I E W
iv ACKNOWLEDGEMENTS I've heard that God will not let you be tempted beyond what you can bear. Frankly speaking, I can't believe that my Ph.D. study in the U.S. has finished in such a short time because some serious obstacles have occurred during the last four years. There are many people who helped me to overcome those obstacles. I cannot adequately express my appreciation to them. First of all, I would like to express my sincere gratitude to my dissertation committee members: Dr. Robert J. Eger III, Dr. Frances S. Berry, Dr. KeonHyung Lee and Dr. Randall G. Holcombe for their advice and critical comments on my dissertation. In particular, I am grateful to Dr. Robert J. Eger III with regard to all my Ph.D. studies at Florida State University (FSU). As my major professor, he always provided me with the best advice at the appropriate time. Without his advice to take the preliminary test before leaving the U.S., I would not be back from Korea and my Ph.D. core coursework at FSU would be just a one year language course. He also gave me the most serious obstacle but simultaneously a big chance to finish my Ph.D. study. He sincerely led me to transform the obstacle into the chance. With regard to continuing my Ph.D. study, I owe Dr. Julie Harrington in FSU Center for Economic Forecasting and Analysis (CEFA). She supported me stipend and valuable research experiences for two years. My CEFA experience helped a lot to break the language barrier in a short time. I thank other FSU Askew school professors who taught me: Dr. E. Klay, Dr. R. Brower, Dr. R. Feiock, Dr. L. de-haven Smith and Dr. K. Yang.
I would also like to acknowledge Korean professors who taught or worked with me. Before entering FSU, I finished doctoral coursework in Seoul National University (SNU) in South Korea. Thanks to SNU doctoral years, I could understand FSU coursework more easily and finish my dissertation earlier than other colleagues. I first started to study policy frameworks under Dr. JongWon Choi, my major professor in SNU. I liked his lectures a lot and he inspired me to be a professor like him. I cannot forget to thank Dr. SangIn Park who taught me diverse empirical methods and good experience for public financial study via GwangJu project. The knowledge and techniques I learned from him contributed much to finish my dissertation faster. I thank other SNU GSPA professors who taught me: Dr. HongIk Jung, Dr. JunKi Kim, Dr. ByungSun Choi, Dr. KwangHo Jung and others. I appreciate the support and encouragement from Korea National Open University (KNOU) faculty members: Dr. ChoongKyong Huh, P R E V I E W
v SunWoo Lee and others. During my hard time, I worked in KNOU as an administrative assistant. Faculty members in KNOU encouraged me to continue my study. I would especially like to acknowledge Dr. ByungGi Moon. He treats me like a nephew and took care of me to overcome my hard time in Korea. Lastly, I would like to thank my colleagues and friends at Askew School and CEFA: TaeSeop Yoon, Dr. SangSoo Kim, Dr. SungKyu Jang, Dr. InWon Lee and others. I cannot write down their names by names because this page will have not enough space for all those names. But I cannot forget their help in Tallahassee. I really hope to pay my debts to them someday sometime, wherever I will be. Although one is too young and the other is too old to call friend, Dr. HongTao Yi and Drs. Martjin Niekus are especially in my mind. Your good friendship will always be remembered.
Finally, I close this acknowledgment; appreciating God as deeply as I can and praying that “Please NOT this kind of hardship again, for the next time.” Without all these peoples’ help and God’s help, I could not finish this small journey to reach the starting harbor of young scholar. Preparing everlasting sail to the sea of knowledge and wisdom, I would like to express my sincere thanks again. Thank you so much. P R E V I E W
vi TABLE OF CONTENTS List of Tables . viii List of Figures . . ix Abstract . . x 1. INTRODUCTION . . 1 1.1 Introduction . . 1 1.2 Background . . 1 1.3 Research Question and Plans for Dissertation Study . . 4 2. RESEARCH FRAMEWORK . . 6 2.1 Background . . 6 2.2 The Eastern Three Elements Framework . . 8 2.2.1 Rational Actor Model . . 10 2.2.2 Political Process Model . . 12 2.2.3 Coincidence Model . . 13 2.3 Summary . . 15 3. THE REPEALED FLORIDA HIGH SPEED RAIL PROJECT . . 17 3.1 Rational Actor Model . . 17 3.2 Political Process Model . . 23 3.2.1 Start Period (1976-2001 . . 23 3.2.2 Hibernation Period (2002 – 2008 . . 24 3.2.3 Revival Period (2009 - 2010 . . 25 3.2.4 Perish Period (2011 . . 25 3.2.5 Institution in This Case: Political Party . . 25 3.3 Coincidence Model . . 30 3.3.1 Opportunity from Decisions by Wisconsin and Ohio . . 31 3.3.2 Learning: Experience of New Jersey . . 32 3.4 Summary . . 33 4. THE PROGRESS OF CALIFORNIA HIGH SPEED RAIL PROJECT . . 34 4.1 Background . . 34 4.2 Rational Actor Model . . 36 4.3 Political Process Model . . 40 4.3.1 Start Period (1981-1983 . . 40 4.3.2 Hibernation Period (1984-1994 . . 41 4.3.3 Revival Period (1995 - 2008 . . 41 4.3.4 Acceleration Period (2009-present . . 43 4.3.5 Institution in This Case: Politic Tendency of the State . . 43 4.4 Coincidence Model . . 44 4.4.1 Opportunity from the Status of California . . 44 4.4.2 Opportunity from Californian Voters and New President . . 46 4.5 Summary . . 47 P R E V I E W
vii 5. DIFFERENT HSR DECISIONS BETWEEN CALIFORNIA AND FLORIDA . . 49 5.1 Rational Actor Model: Variables and Hypotheses . . 49 5.1.1 Cost Side . . 50 5.1.2 Benefit Side . . 51 5.1.3 Alternative Side . . 54 5.2 Political Process Model: Variables and Hypotheses . . 57 5.3 Coincidence Model: Variables and Hypotheses . . 61 5.4 Summary . . 62 6. EMPIRICAL TESTS FOR US HIGH SPEED RAIL PROJECT . . 63 6.1 Basic Test Model . . 63 6.2 Methodology . . 63 6.3 Data Description . . 64 6.3.1 Dependent Variable . . 64 6.3.2 Independent Variables . . 64 6.4 Results . . 68 6.4.1 Hypotheses Test and Explanation . . 70 6.4.2 Predictive Power of the ETE Framework . . 73 6.4.3 Conditional Cases Comparison . . 73 6.5 Discussion . . 75 6.6 Summary . . 76 7. CONCLUSION . . 78 7.1 Study Findings and Contributions . . 78 7.1.1 Research Framework . . 78 7.1.2 The Reason for FHSR Repeal . . 79 7.1.3 The Reason for Progressing CHSR . . 80 7.1.4 Decision Making Factors for U.S. HSR Projects . . 80 7.2 Limitations and Further Research . . 81 REFERENCES . . 83 BIOGRAPHICAL SKETCH . . 91 P R E V I E W
viii LIST OF TABLES 1 U.S. High Speed Rail Corridors, Major Linked Cities and Related States in the U.S . . 3 2 The Eastern Three Elements Framework for Decision Making . . 9 3 Related Issues for Rational Actor Model in FHSR Case . . 22 4 Timeline and Four Phases for Florida High Speed Rail . . 27 5 Related Issues for Rational Actor Model in CHSR Case . . 39 6 Timeline and Four Phases for California High Speed Rail . . 42 7 RAM Variables Using Florida and California as Benchmarks . . 56 8 PPM Related Variables in Florida and California . . 60 9 Variables for Empirical Study . . 67 10 Analysis Results and Hypotheses Results . . 69 11 The Predictive Power of ETE Framework about HSR decisions . . 73 12 Changes in Probability under Particular Conditions . . 74 P R E V I E W
ix LIST OF FIGURES 1 Map of United States High Speed Rail Corridor Designations . . 2 2 Florida Corridor in the FRA Plan 2010 . . 18 3 Party Affiliation in the Florida Legislature (1990-2012 . . 30 4 California Corridor in the FRA Plan 2010 and Phase 1 CHSR Line . . 35 5 Unemployment Rate in California and the U.S. (1990-2012 . . 45 6 Monthly Average Retail Gas Price in California and the U.S. (2004-2012 . . 46 7 Monthly Average Retail Gas Price in Florida and California (2008-2012 . . 53 P R E V I E W
x ABSTRACT Policy Decision making for Transportation Infrastructure: The Cases of High Speed Rails in the U.S. This dissertation is about policy decision making in transportation infrastructure. With this dissertation an attempt is made to understand factors which affect policy decisions in state governments or within the public sector. The dissertation analyzes the factors influencing policy decisions related to High Speed Rail (HSR) in the 48 contiguous states. To analyze the administrative decision making more systematically, this dissertation constructs a new decision making framework. The Eastern Three Elements (ETE) framework combines three established models in decision making. Using the ETE framework, the dissertation analyzes the reasons for the repealed Florida High Speed Rail (FHSR) and the reasons for the continuing progress of the California High Speed Rail (CHSR). By comparing the underpinning decision making, the dissertation provides factors that influence the policy decisions within state government. By recognizing these factors, the dissertation constructs hypotheses from the theoretical development, and empirically tests this underlying theory through a generalization to all states affected by the U.S. High Speed Rail Project.
The finding is that the ETE framework provides a more complete and comprehensive analysis of the decision making in public transportation projects. These analyses provide evidence to assist in our understanding vis-à-vis the implications of today’s public transportation system construction and public infrastructure policies. P R E V I E W
1 CHAPTER 1 INTRODUCTION 1.1 Introduction This dissertation is about policy decision making in transportation infrastructure. In building transportation infrastructure, there are many parts which necessarily engage private sector actors, such as construction companies, banks, engineering companies, etc. What is the pure or sole part in building transportation infrastructure for public administration? This part is the decision making, whether government builds the infrastructure or not. There is an argument for this decision making; who will make the decision or who are the main actor(s) in decision making? Some scholars focus on the elites, top public officials’ behavior, because organizational decisions are made by these individual decision makers who are given the prerogative of power. Other scholars pay more attention to organizational behaviors because there are many cases where decision makers are forced to change their decisions due to internal or external pressure(s), such as standard operating procedure (SOP) or the political powers from inside or outside (Cyert and March 1963). This dissertation incorporates the first perception, focusing on the decision makers’ behavior, treating their individual decisions as organizational decisions. This dissertation advances our understanding of the factors that affect policy decisions using the Eastern Three Elements (ETE) framework in state government decision making. The dissertation analyzes the decisions related to High Speed Rail (HSR) to find decision-influencing factors. 1.2 Background According to the Federal Railroad Administration (FRA), “intercity passenger ground transportation — by steel-wheel railroad or magnetic levitation (Maglev) — that is time- competitive with air and/or car travel markets in the approximate range of 100-500 miles”, is the definition of High Speed Ground Transportation in the U.S.
U.S. High Speed Rail (HSR) development and planning is foundationally rooted in the 1960s. Congress passed the High Speed Ground Transportation Act in 1965, which started a federal effort to explore the potential for high speed rail in the U.S. In 1969, the Metroliner between P R E V I E W
2 New York and Washington, D.C. was constructed. It marked the beginning of higher speed rail (110 mph or higher) scheduled services in the U.S. In 1994, the creation of the Next Generation High-Speed Rail Technology Development Program made possible the further evaluation of HSR systems (Schwieterman & Scheidt, 2007). Recently, the Obama Administration established a policy with the objective of connecting 80 percent of Americans with HSR over the next 25 years, committing $53 billion to the objective. In February 2009, the President asked Congress to include $8 billion for high speed rail in the American Recovery and Reinvestment Act (ARRA). Two months later, the U.S. government published its blueprint for a national HSR network. Figure 1 shows the envisioned plan.
Source: Federal Railroad Administration, High Speed Rail Corridor Descriptions, available at http://www.fra.dot.gov/Pages/203.shtml derived from Peterman et al. (2009) Appendix Note: The red line, Northeast Corridor from Washington DC to Boston is not a federally designated line. Figure 1 Map of United States High Speed Rail Corridor Designations P R E V I E W
3 Corridor Name Major Cities Linked in the U.S. Related States in the U.S. California Corridor San Francisco Bay Area (San Francisco, San Jose and Oakland), Sacramento, Merced, Bakersfield, Los Angeles, Anaheim, San Diego, CA; Las Vegas, NV CA, NV Pacific Northwest Corridor Eugene, Portland, OR; Tacoma, Seattle, WA WA, OR South Central Corridor Tulsa, Oklahoma City, OK; Little Rock, AR; Dallas, Austin, San Antonio, TX OK, AR, TX Gulf Coast Corridor Houston, TX; New Orleans, LA; Mobile, Birmingham, AL; Meridian, Biloxi, MS; Atlanta, GA TX, LA, AL, MS, GA Chicago Hub Network Chicago, Springfield, IL; Kalamazoo, Detroit, MI; Toledo, Columbus, Cincinnati, Cleveland, OH; Kansas City, St. Louis, MO; Louisville, KY; Milwaukee, WI; Minneapolis/St. Paul, MN; Indianapolis, IN IL, MI, OH, MO, KY, WI, MN, IN Florida Corridor Tampa, Orlando, Miami FL Southeast Corridor Washington, D.C.; Richmond, Hampton Roads, VA; Raleigh, Durham, Greensboro, Charlotte, NC; Greenville, Columbia, SC; Atlanta, Macon, Savannah, Jesup, GA; Jacksonville, FL D.C,VA, NC, SC, GA, FL Keystone Corridor Pittsburgh, Harrisburg, Philadelphia PA Northeast Corridor (not a federally designated line) Washington, D.C; Baltimore, MD; Wilmington, DE; Philadelphia, PA; Trenton, Newark, NJ; New York City, NY, RI D.C, MD, DE, PA, NJ, NY, RI Empire Corridor Buffalo, Rochester, Syracuse, Utica, Albany, New York City, NY; New Haven, CT NY Northern New England Corridor Boston, Springfield, MA; Portland/Auburn, ME; New Haven, CT; Albany, NY, NH, VT MA, ME, CT, NY, NH, VT Total 73 34 Source: Federal Railroad Administration, Designated High Speed Rail Corridors, available at http://www.fra.dot.gov/Pages/203.shtml, table reorganized by the author. Table 1 U.S. High Speed Rail Corridors, Major Linked Cities and Related States in the U.S. P R E V I E W
4 According to the Federal Railroad Administration (FRA) plan in Figure 1, 34 states and 73 major cities will be linked1 . Table 1 summarizes the FRA plan by corridor in 2010. In February 2011, three states, Florida, Ohio and Wisconsin rejected the Federal funds available to construct the proposed HSR project. 1.3 Research Question and Plans for Dissertation Study The research question addressed in this dissertation is: Why would states reject or accept federal funding? Specifically, which factors influence policy choice in state government decision making?
Four sub questions under this main research question will be addressed in this dissertation: - Is there a research framework to explain factors influencing policy decision making? - Why did the state of Florida reject the Federal funds, which had been pursued for a long time? - How could the state of California continue with the high speed rail project in spite of obstacles? - Which decision making factors are influential in U.S. high speed rail projects? These questions are addressed in each of the coming chapters. Therefore, this dissertation is organized as follows. Chapter 2, Research Framework, provides a derived framework, the Eastern Three Elements (ETE) framework, to analyze administrative decision making. Chapter 3 will consider the Florida High Speed Rail (FHSR) Project repeal and provide the reasons for the repeal under the derived framework. Chapter 4, the Progress of the California High Speed Rail (CHSR) Project, explores the reasons for progress under the derived framework. Chapter 5 compares conditions of California and Florida with respect to the different HSR decisions in the two states, and explores factors influencing the decisions under the derived framework. Chapter 6 empirically tests hypotheses derived from the framework. Gathered data from the contiguous 1 The remaining 16 states, which are Alaska(AK), Hawaii(HI), Idaho(ID), Utah(UT), Arizona(AZ), Montana(MT), Wyoming(WY), Colorado(CO), New Mexico(NM), North Dakota(ND), South Dakota(SD), Nebraska(NE), Kansas(KS), Iowa(IA), Tennessee(TN), West Virginia(WV), were not included in this Federal plan. P R E V I E W
5 48 states are analyzed to explore the underlying factors. The empirical results provide decision making factors which are influential in the U.S. HSR projects and support the explanatory power of ETE framework. Discussions from the findings are followed. Finally, chapter 7 summarizes the empirical findings, contributions and limitations. P R E V I E W
6 CHAPTER 2 RESEARCH FRAMEWORK 2.1 Background There are many frameworks, theories, and models analyzing decision making in public administration and policy. According to Ostrom (2007), there is a distinction between a framework, a theory, and a model. In her view, a ‘conceptual framework’ identifies a set of variables and the relationships among them that plausibly justify a set of phenomena. The framework can provide a big picture, such as a paradigm from a modest set of variables. A ‘theory’ identifies a set of relationships that is more logically coherent. It first applies values to some of the variables and then it usually specifies how relationships may vary in accordance with the values of critical variables. A ‘model’ accounts for a specific situation. It is usually much narrower in scope and more specific in its assumptions than the underlying theory. Thus, frameworks, theories, and models can be conceptualized as decreasing in scope but increasing according to specifics along a continuum (Sabatier, 2007).
Although frameworks, theories, and models are distinguishable, attempts to synthesize different models or frameworks into a single framework have been noted in literature. Etzioni (1967) was the first to synthesize different models of administrative and political decision making with the creation of his ‘mixed scanning model.’2 His model combines strong elements of both the rationalist model and the incrementalist model. The result is a third approach which is neither as utopian in its assumptions as the rationalist model nor as conservative as the incrementalist model. This new framework divides decision making into two sorts: (1) fundamental decisions, which explore the main alternatives the actor perceives, in view of his conception of the goals with the details omitted for feasible overview, and (2) incremental decisions, which are made within the contexts set by fundamental decisions (Etzioni, 1967). This framework can explain conditional usages of decision making models depending on the level of the organization at which the decision is made: fundamental decisions made in the upper strata of the organization are assumed to be based on a rationalist policy-making process, while minor decisions made in 2 Although Etzioni calls this a model, it is more accurately described as a framework under the definition provided herein.
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7 the lower strata are assumed to be based on incremental processes. Incremental decisions made in the lower strata allow for expensive rational decision making in the upper strata. The rational- based decisions are then implemented in the lower strata through incremental adjustments (Etzioni, 1986). However, this framework can be criticized as not being new, but just one alteration of the rationalist model, a more rationalistic approach on the continuum of decision making between the rationalist model and the incrementalist model.
In the diplomatic policy analysis framework, Alison (1969) combined three models, each focusing on different units of analysis, into one analytical framework to explain the Cuban Missile Crisis. The first model, the Rational Actor Model, treats the government as the primary actor. The government examines a set of options, evaluates options according to their utility, and then picks the one that offers the highest ‘payoff.’ The second model, the Organizational Process Model, sees sub-organizations as the unit of analysis. The model analyzes standard operating procedures (SOPs) among sub-governmental organizations and problems derived from those SOPs. The third model, the Governmental Politics Model, focuses on individuals within the government. This model seeks to explain that a nation’s actions are reflective of the result of politicking and negotiation by its top leaders. Although Alison’s (1969) study claims to employ three different lenses in the analysis of decisions regarding the Cuban Missile Crisis, he did not apply all three models to the same decision. Only the Rational Actor and Governmental Politics models were used to explain the U.S.’s decision to blockade Cuba. The Organizational Process model, however, was used to explain why the U.S. did not uncover the presence of a Soviet missile site in Cuba earlier.
Following this idea of combining various models, this dissertation builds a combined analytical framework in order to get a more complete and comprehensive perception of administrative and political decision making. This framework has been constructed carefully to be not just a middle- of-the-road model between the opposing models as the mixed scanning model, and it must be able to be applied to the same decision making to improve the weakness of Alison’s framework. P R E V I E W
8 2.2 The Eastern Three Elements Framework The motivation for the framework comes from Eastern philosophy in the Book of Changes (周易 )3 . East Asian culture stresses the premise that the universe is comprised of three elements: sky ( 天), earth (地), and human (人). Traditionally, East Asian people think that if an event is to be successful, it requires a positive status from each of these elements. For example, a victory in war is the most important event for any country. If a country wants to win a war, it will need a stronger army (human), better geological support (earth), and a more accurate timing of striking (sky) than the enemy country. According to Mencius, the elements have an order of priority in the sense that advantages from the earth (地利) are more important than those from the sky (天 時), and harmony of humans (人和) is more advantageous than benefits from the earth. These three elements have various symbolic meanings, which can be applied in different contexts. Sky means weather, upper class, God’s will, proper timing, etc. Earth has meanings related to terrain, surroundings, backgrounds, history, etc. Human stands for citizen, morale, tasks for people at hand, etc.
How can this philosophy be applied to policy decision making? Suppose that a decision maker considers a specific policy. First, the decision maker will focus on the policy itself and what he can do (人和): determining the feasibility of the work to be done, gauging possible and available resources, considering alternatives for the efforts to be undertaken, estimating the costs, calculating the benefits of the work, etc. If the resources are insufficient to implement the policy, and/or if there are better alternatives and/or if benefits to be derived are less than the cost, the decision maker will obviously stop the task at hand. This process is best described as a rational, economic-based approach.
Sometimes problems are not solved without consideration of the context. There are many cases in which a process appears feasible and has a good benefit-to-cost ratio, but cannot be started because of outside pressures. If the task is historically perceived as being the wrong approach (evil), regardless of its true appropriateness, the bias against it will hamper the implementation of 3 Book of Changes is one of the six scriptures for Confucianism. It is recognized as a basic source for both Confucianist and Taoist philosophy and is treated as the one of the first efforts of the human mind to place itself within the universe.
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9 the policy. Some scholars call the people’s perception (or public opinion) an informal institution (North, 1990; Knight, 1992; Campbell, 2000). Informal institutions can be taken to stem from a historical context. Therefore, the historical context (地利) is important to decision making. If there are issues or problems to execute a planned policy, historical institutionalism may provide some clues to the reasons for the objections or opposition raised. Although the policy may be desirable, feasible, and the general environment is favorable, the policy cannot be commenced without catching proper timing or a favorable environment to be implemented at a specific time. A sudden death of a keenly enthusiastic policy maker, the occurrence of a natural disaster which needs urgent funding, recently developed new technology which offers more feasible solutions or provides charming substitutes for the original policy, etc. could obstruct the implementation of a policy. The timing of decision making (天時) must therefore be considered. Cohen, March and Olsen (1972) explained timing through their Garbage Can Model. They assert that a decision is an outcome of several relatively independent streams being stirred at the same time. Without proper timing, when independent elements meet together, the decision cannot be made.
Rational Actor Model Political Process Model Coincidence Model Motive Human Behavior(人和) Surroundings(地利) Timeliness(天時) Central Focus Target Itself Historical Context (Long-term Environment) Timing (Short-term Environment) Impact on Decision Primary and Direct Secondary and Indirect Secondary but Direct Rationality Basis Complete Rationality Bounded Rationality Bounded Rationality (Ad hoc Rationality) Theory Basis Economic Analysis Historical Institutionalism Garbage Can Theory Approach Economic Political/ Sociological Psychological Table 2 The Eastern Three Elements Framework for Decision Making P R E V I E W
10 In combining models, the analytic framework in this dissertation, the Eastern Three Elements (ETE) framework, is developed. This paper follows Ostrom’s (2007) differentiation between framework and model. The ETE framework will consist of three decision making models. Table 2 provides a summary of the concepts to be used. Each model distinguishes certain features as the relevant determinants. Each conceptual model consists of a cluster of assumptions that influence the analyst as he formulates questions, searches for evidence, and produces answers. They provide different perceptions (lenses) on policy decision making. Individually, these models provide an incomplete picture of the criteria influencing the policy decision making under the ETE framework.
2.2.1 Rational Actor Model Under the ETE framework, the Rational Actor Model (RAM) takes charge of explaining the target features or policy itself, which is the object of the decision and can be controlled by human behavior or endeavors. On decision making, the impacts of RAM variables are primary and direct. The RAM is widely used in analyzing government behavior and international relations (Alison and Zelikow, 1999). RAM entails a normative approach to utility maximization. Maximization requires that the policy decision maker to face a series of alternatives that are subject to market and technological limits. The assumption of being fully informed, or an exhaustive analysis, is essential to apply this model successfully (Miller, 1991). Actually, human beings have a limited capability to gather or handle complete information. Simon (1955) suggested that human beings seem to have a limited capability to deal with sensory overload from too much information and a shortage of time to analyze the information. Despite Simon’s (1955) ground breaking work, this ‘fully informed’ or ‘complete’ rationality assumption is still useful in analyzing decision making behavior. This assumption makes analysis much easier. The RAM concentrates on particular concepts: decision makers try to find the best decisions in order to pursue the goals and objectives of the organization or government. Predictions about what a government will do or would have done are generated by calculating the best solution to a certain situation, given specified objectives. In other words, RAM focuses on the target itself, how decision makers evaluate related issues around the target. P R E V I E W
11 The RAM is based on an economic approach or analysis. According to Rhoades (1978), the resource allocation side of economics suggests policy guidance stems from welfare economics and benefit-cost analyses. Welfare economics justifies the appropriate governmental function for the public. Benefit-cost analyses, the applied branch of welfare economics, give advice about how much money should be spent on justifiable objectives and functions. The economic approach stressed three related concepts, namely, opportunity cost, marginalism, and economic incentives. The first concept, opportunity cost, is knowledge that the cost of any activity should be measured by the value of the best alternative. When spending or regulatory decisions are made, which use scarce resources, the cost of them is not equal to the price to implement them, but the possible benefits to be derived from the best alternative. Therefore, economic analyses should gauge the value of alternatives. The second concept, marginalism, looks at added (or subtracted) extra values or the details. Most budgeting decisions are concerned with spending a bit more or a little less. This means that we may quite rationally do some things to a lesser extent or not at all, if budgets are tight and needs elsewhere are pressing. Concentrating all resources on a specific program is not a good choice according to this concept. The last concept, economic incentives, is that people naturally follow the law of price. If the price of something goes up, some people will consume less of the same, and if the price goes down, some will consume more. This means that government can guide or steer the public through altering relative prices. For example, if government wants to decrease pollution, the solution from the economic approach is raising the price of pollution. Therefore, the economic approach spends much time analyzing the public sector applications of simple supply and demand curves and then measuring those curves’ slopes or elasticities (Rhoades, 1978).
The RAM includes four major issues. First, a decision maker determines and clarifies separate values or objectives before considering alternative policies. Second, a decision maker conceives policy through ends-means analysis. Third, a ‘good’ policy provides the most appropriate means to some desired end(s). Last, a decision maker should consider every important relevant factor (Lindblom, 1959). Consider a decision maker in RAM who faces a specific problem that can be isolated from other problems, or that can be considered meaningfully in combination or comparison with all other problems. Miller (1991) well summarized this situation as follows: “The goals or values to be achieved in solving the problem will be selected and ranked according to their importance. The decision maker then searches for and finds all possible approaches for P R E V I E W
12 achieving the goals or values, as well as the expected consequences and costs of each alternative approach. Next, the decision maker will compare the consequences of any approach with that of all other alternatives. Finally, the decision maker chooses the alternative that has consequences most clearly matching the predetermined goals.” (Miller, 1991, p.40) 2.2.2 Political Process Model “History matters. Today’s and tomorrow’s choices are shaped by the past.” (North, 1990, preface) Under the ETE framework, the Political Process Model (PPM) explains the surroundings of the target, which are embedded in the thought process of the decision maker and influence the direction of the decision formally or informally. The objects of the PPM are called “institutions.” They are still being built during a relatively longer time frame, which reflects the historical context. Therefore, they cannot be easily controlled by human behavior or endeavors. PPM variables’ impact on decision making is secondary and indirect. The central idea of the PPM is the notion that the institutions that guide the decision making reflect historical experience. Once institutions have been established, they have influenced subsequent decision making and institution-building episodes (Campbell, 2004). Historical New Institutionalism scholars name this tendency ‘path dependency’ (North, 1990). Institutions constrain or limit the choices being considered by decision makers. Decision makers incrementally adjust their policies and institutions, this in response to their feedback from their environments (Campbell, 2004). The idea is similar to Simon’s (1955) bounded rationality concept, in which rationality of individuals is limited by the finite amount of time they have to make decisions, the information they have and the cognitive limitations of their minds. The human’s background information and cognitive ability for decision making is constrained by surroundings created or formed in historical context, or “institutions” in new institutionalism. The comparative institutional history of Weber and the historical materialism of Marx influenced the origin of historical institutionalism. Political scientists, who have an interest in how political and economic decision making is influenced by the institutional arrangement of states, developed historical institutionalism. In their view, institutions are sets of formal and informal rules and procedures (North, 1990; Thelen and Steinmo, 1992).
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13 The PPM is more focused on broader societal and state structures than on organizations or decision making per se. The important point of this concept is that institutions constrain outcomes but they do not fully determine outcomes. In their classic statement, Thelen and Steinmo (1992) declare that, “what is implicit but crucial in this and most other conceptions of historical institutionalism is that institutions constrain and refract politics but they are never the sole ‘cause’ of outcomes.” Therefore, in this paper the PPM is used as one of the sub-models of the analytical framework. The PPM can give us more plausible ‘causes’ in combination with the other two models.
Historical New Institutionalism takes a middle road between Rational Choice and Organizational New Institutionalism, in the sense that it seeks to offer a more balanced treatment in the work of the interaction between ideas and interests – between logic of appropriateness and logic of instrumentality (Goldstein and Keohane, 1993). There is one pervasive issue among scholars in Historical New Institutionalism: inconsistency between incremental change and abrupt change or between path dependency and punctuated equilibrium. Certainly, evolutionary patterns of change in policy and institutions are consistent with a long standing tradition (path dependency), and institutional changes are well conceptualized as being incremental (North, 1990). Historical New Institutionalism also has been interested in sharp breaks from the past. Scholars describe this sudden pattern alteration between stability and change as punctuated equilibrium (Baumgatner and Jones, 1993). Rapid, revolutionary changes cannot be explained well with an analytic framework that uses path dependency. In other words, if institutions are so important in constraining policy-making outcomes at some times, how can they become unimportant at other times? (Peters, 1999) Some Historical New Institutionalists believed that the concept of path dependency is often used too loosely without a clear specifying the mechanisms involved (Pierson, 2000). 2.2.3 Coincidence Model In an organized anarchy, a decision is an outcome or an interpretation of several relatively independent streams within an organization (Cohen and March, 1986). Thus, a decision is a production of the tendency of players, problems, solutions, and choices to be joined by relatively arbitrary accidents. Randomness prevails rather than their relevance to each other. In the ETE P R E V I E W