CHAPTER 7 rules for reducing pollution.

The government takes this external pressure into

account and develops new policies to tackle environmental issues.
HOW BUSINESS AND GOVERNMENT RELATE
2) Public policy goals: can be broad and high-minded or narrow and self-
1) Seeking collaborative partnership serving.

Government works closely with the business to build a collative partnership

and seek mutually beneficial goals. This collaborative partnership is influence Eg: Public policy goals can be either broad and focused on the greater good,
by nation’s values and customs. like providing affordable healthcare for all, or narrow and self-serving, such
as offering tax incentives primarily benefiting wealthy businesses or
in Asian countries, societies is view as a collective family that include both individuals.
government and business. These two powers seek results that benefit both
society and business. However, in Europe, the relationship between 3) Public policy tools: incentives and penalties that government uses to
government and business often has been collaborative. Their culture includes achieve policy goals.
a sense of teamwork and mutual aid.

Eg : In Europe, the government and businesses often work together like a

team. contoh, building a new railway system. The government provides
support and rules, while businesses bring their skills and resources. They 4) Public policy effects: the outcomes arising from government regulation.
communicate and make decisions together to ensure the project is successful. Public policy effects are the outcomes that result from government
This teamwork benefits both society and the businesses involved. regulations. For example, implementing higher taxes on sugary beverages can
lead to reduced consumption and improved public health outcomes.
Eg : In Asia, there's a pollution issue, the government and businesses
collaborate closely. The government sets rules and offers support, while TYPE OF PUBLIC POLICY : ECONOMIC
businesses make changes to reduce pollution. They see it as their duty to help
society and protect the environment. 1) Fiscal policy: patterns of government collecting and spending funds to
stimulate or support the economy. Eg: For instance, during an economic
downturn, increased government spending on infrastructure projects can
create jobs and boost economic activity.
2) working in opposition to the government
2) Monetary policy: policies that affect the supply, demand, and value of a
The government’s goals and business’s objectives are in conflict and result in nation’s currency. For example, lowering interest rates to encourage
an adversarial relationship. That means The government and businesses can borrowing and spending can stimulate the economy but may also affect the
have different goals and interests, which leads to a competitive relationship value of the currency.
where they work in opposition to each other.
3) Taxation policy: Raising or lowering taxes on business or individuals. For
Eg : companies often prefer to operate without government constraints, which instance, lowering corporate tax rates can incentivize business investment and
can be costly and restrict innovation. But regulation also can help businesses, promote economic growth.
by setting minimum standards that all firms must meet. This can give benefit
in terms of building public confidence in the safety of products and creating 4) Industrial policy: Directing economic resources toward the development of
playing field for competition. specific industries. For example, the government may support and provide
incentives for the development of the renewable energy sector to foster
3) Legitimacy issues growth and sustainability.

Companies operating globally may find governments whose legitimacy or 5) Trade policy: Encouraging or discouraging trade with other countries. that
right to be in power is questioned. Companies that work internationally may means trade policy influences international trade. For instance, reducing trade
face situations where people question whether certain governments have the barriers can encourage imports, providing more choices and potentially lower
right to be in power. Business managers may face the dilemma of whether to prices for consumers.
do business in such a country, where their involvement would indirectly
support this illegitimate power. TYPE OF PUBLIC POLICY : SOCIAL

Social assistance policies : Policies that concern social services for citizens.
Social assistance policies provide essential services like healthcare and
GOVERNMENT PUBLIC POLICY ROLE education. Social assistance policies ensure citizens have access to essential
services like healthcare and education. These policies aim to provide
Public policy: A plan of action undertaken by government officials to achieve affordable and quality care, promote equitable access, and support personal
some broad purpose affecting a substantial segment of a nation’s citizens. development and well-being.
The public policy sets :

1) Goals: A government sets a goal of reducing greenhouse gas emissions to GOVERNMENT REGULATION OF BUSINESS
combat climate change. They establish policies and initiatives to transition to
renewable energy sources, promote energy efficiency, and encourage Regulation is the action of the government to establish rules of conduct for
sustainable transportation. citizens and organizations. It is a primary way of accomplishing public policy.
For instance, regulations on food establishments ensure hygiene and safety
2) Plans: A government develops a plan to improve education by standards are met to protect public health.
implementing policies such as increasing funding for schools, enhancing
teacher training programs, and introducing curriculum reforms to better REASON FOR REGULATION
prepare students for the workforce.
1) Market failure: marketplace fails to adjust prices for the true costs of a
3) Actions: A government takes action to address public health concerns by firm’s behavior. eg :When a company produces goods that generate harmful
implementing a nationwide vaccination campaign. They establish vaccination pollution, but the market does not account for the environmental costs.
centers, distribute vaccines, and launch public awareness campaigns to Imposing regulations on carbon emissions to address climate change and
encourage the population to get vaccinated and protect public health. promote cleaner energy sources.

2) Negative externalities: the manufacture or distribution of a product gives

THE ELEMENT OF PUBLIC POLICY rise to unplanned or unintended costs (spillover effects). eg :When a factory
pollutes a nearby river, affecting the water quality and the health of the
1) Public policy inputs: external pressures that shape a government’s policy surrounding community. Implementing regulations on industrial waste
decisions and strategies to address problems. Eg: example of a public policy disposal to protect the environment and public health.
input is when environmental groups push the government to create stricter
3) Natural monopolies: without competition, firms could raise prices as much b. Reregulation: the expansion of government regulation.
as they want. eg: When a utility company has exclusive control over eg : Implementing stricter regulations on banks after a financial crisis to
providing electricity in a region, allowing them to charge high prices. enhance stability and protect consumers.
Regulating utility rates to prevent monopolistic behavior and ensure
affordable access to essential services. REGULATION IN GLOBAL CONTEXT

4) Ethical arguments: consequences, fairness issues. Eg: When a company Government established rules to protect the interests of the their citizens
engages in unfair labor practices, such as paying extremely low wages or through International regulatory agreements and cooperation. This can occur
unsafe working conditions. Enforcing regulations to ensure minimum wage through direct negotiations or involvement with organizations like the United
laws and workplace safety standards, protecting workers' rights and Nations, aiming to establish common standards for the well-being and safety
promoting fair treatment. of people worldwide.

TYPE OF REGULATION : ECONOMIC

Economic regulations : aim to modify the normal operation of the free market
and the forces of supply and demand; the oldest form of regulation. It include
regulation that :

1) Control prices or wages. Eg : the government set a minimum wage for

employees.

2) Allocate public resources: The government gives a specific company

exclusive rights to mine natural resources in a particular area to avoid
conflicts and ensure responsible extraction.

3) Establish service territories: The government assigns specific areas to

utility companies to avoid duplication of services. For example, each electric
company operates in a designated area to provide electricity.

4) Set the number of participants: The government limits the number of taxi
licenses issued to maintain a balanced market for taxi services.

5) Ration resources: During a water shortage, the government sets limits on

water usage for each household or business to ensure fair distribution of water.

ANTITRUST: A SPECIAL KIND OF ECONOMIC REGULATION

Antitrust laws prohibit unfair, anticompetitive practices by businesses. That

means it prevents businesses from engaging in unfair practices that harm
competition. Firms may not engage in Predatory pricing which is the practice
of selling below cost to drive rivals out of business.

TYPE OF REGULATION: SOCIAL

Social regulations it aimed at such important social goals as protecting

consumers and the environment and providing workers with safe and healthy
working conditions. These Includes regulations which apply to all businesses:
1) Equal employment opportunity : Businesses must treat all individuals
fairly and equally during the hiring process, regardless of their gender, race,
or disability.

2) Protection of pension benefits: Regulations ensure that companies

contribute to employees' retirement funds, providing financial security after
they stop working.

3) Health care for all citizens : Policies are in place to ensure that everyone
has access to healthcare services, either through a national healthcare system
or through employer-provided benefits.

4) Pollution control : Regulations require businesses to minimize pollution

and environmental damage by implementing measures to reduce emissions
and properly handle hazardous waste.

5) Safety and health concerns: Businesses are obligated to provide safe

working conditions for employees, including training, safety protocols, and
protective equipment to prevent accidents and promote worker well-being.

THE EFFECT OF REGULATION

The Costs and Benefits of Regulation : Cost-benefit analysis helps the public
understand what is at stake when new regulation is sought. For example,
when considering regulations to reduce air pollution, it weighs the costs on
businesses against the benefits of improved public health and a healthier
environment.

Continuous Regulatory Reform

a. Deregulation: the removal or scaling down regulatory activities of
government. Eg: Removing restrictions on competition in the
telecommunications industry to promote innovation and lower prices for
consumers.