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Federalism

government 2. Federalism: reconciliation of unity and diversity via autonomy Most countries are not federalist countries Most are unitary states

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1. Federation: state institutions that divide sovereignty between two or more levels of

[1] Federalism as an idea [set of principles] modern idea, reflects liberalism and nationalism reconciliation of diversity developed in the last 200-300 years

[i] liberal view, divide the government US fed started here (1792) limitation of power, protect the individual: separation of powers, the bill of rights & federalism Germany Came together late, composed of different units units were autonomous, had different dialects, but saw themselves as one nation WW2-post Germany, was there a US influence?

Key: protecting the individual So real fed needs lib-dem? Examples: USSR, Russia, etc Under the Soviet union, even though the doc stated states could leave, no one left and everything was centralized in Moscow Modern day Russia is also largely authoritarian, because there is no real division of sovereignty [ii] autonomy for nations and ethnicities also a modern concept

reconcile the multiplicity Swiss ex (1847) classic case after 500 years of confederation: 4 languages, 2 religions, etc The lower levels of the government were given powers Different communities are allowed self government over key decisions Turned to fed from confederation Confederation could only act form the national level when all CUs agreed (EU is a confederation today)

Mover from the delegated system from the lower to the upper, the upper was not sovereignty in the confederation Fed sovereignty each sovereignty in its own right

Canada (1867) centralized, was not a confed, was called a confederation Belgium (1993) language divisions Key: protecting communities [iii] Sheer size? (other factors of federalism) Australia (1901) Eng and French had to be reconciled And the maritime provinces with the central prov Communities are of interest

[2] Federation as (variable) institution Variations within federation There are different ways in which power can be divided hard to measure Canada, now, is a highly decentralized federation, there is a lot of power at the provincial level how to measure?

[i] the degree of centralization

formal divisions of power? The constitution, BNA (s91, 92), there might be a difference between the doc and the way fed is practiced

Ottawa has less power in some spheres and more powers in others Can declare something of national importance and can nationalize it, but declaration power is dead

HI (health insurance) prov, the fed uses conditional grants to influence what the prov are doing, more than the official doc Money (own-source revenues: revenues you can rise on your own, income taxes, the sales tax, tariffs (fed), property taxes (prov)) who has more money Transfer payments The degree of conditionality 1950 hospital insurance, initially the fed gave the money with a lot of strings attached, eventually the money was given with almost no stings Formal division did not change

1. unitary/centralized: UK, France, Italy + 13 others UK: moved form 1 to 3 recently welfare state is administered by the municipal gov what the municipal government does is controlled by the central government national gov can change anything if they wanted to Spain there are CU which are sovereign, but they can be controlled by the fed

2. unitary/decentralized: Japan, 4 Nordic nations

3. semi-federal: Spain and Netherlands

4. fed/ centralized 5. fed/ decentralized Canada is decentralized Canada is more decentralized than others now

Decentralized Canada 1. how much spending do lower governments control

lower controlled the money that the prov raised on its own or it an unconditional transfer payment

in Canada over half of the money is lower controlled

[ii] symmetry/asymmetry Canada? BNA: distinctive features for QC: civil law, French language Not asymmetrical powers but distinctive features Constitutional debate Meech Lake and Charlottetown Accords would have made Canada an asymmetrical power Would make Quebec a distinct society in Canada Would have the power to protect the French language Was not clear what it would mean Quebec would have additional powers Rejected by the English Canada Eng Canada believes that Quebec was getting special status and would have special powers and the Quebec citizens would become special citizens Why did it fail? Liberal motivation v communitarian motivation Historically Canada became fed for communitarian reasons by 1980s and 1990s was individualistic [Eng Can]

Asymmetry more common in non fed states Spain, UK, Italy Parts are given their own assemblies evolution without giving up sovereignty

Are steps being made towards federalism? [iii] classical v coordinative federalism

inter-state: divides power between two levels to create less interaction, but a lot of interaction will happen anyway; if was practically viable, two would be separate in their sphere and there would be no relations between the national and the prov govs intra-state: federal may have more power, but the lower has power at the center (Germany is the classical case) the lander is not weak because when the fed wants to pass leg, its passes through the lower house, but they also have the leg passed in the upper house, the representatives of the upper house are delegates from the lower level of government to pass any leg, they have to have the say so of the lower level of the government the Germans like to cooperate and collaborate

[3] What about local governments? The local government have delegate powers the city of Toronto Act passed in Queens Park the prov can abolish the Act at any time sometimes the local governments have sovereignty

3RD Order of Government Cities: creative new governing means or dysfunctional? In fed, the delegation is usually from the lower levels, but municipal role varies [1] Anglo-Saxon informal, muddling thought (US, UK, Cdn) [2] Germany: formal, collaborative decisions (Germany, Austria, Spain, Belgium) What goes on form the prov and the cities, is like what goes on between the prov and the fed, there a collaborative bodies and law [3] France: formal, top-down, technocratic [France, Italy, Portugal, Greece, Quebec] [4] Globalization & Multilevel governance Is globalization pushing the power up and down sovereign in their own domain

Glocalization Since the 1960s and 70s the fed government has been loosing or transferring powers to the provinces Provinces are giving powers to the municipalities Power is seeping down-wards Power is also moving up (NAFTA) and other global organizations (WTO/UN) regional and global multilayered system of government result, weaken capacity of the state to solve problems; truimpth of the market may be multilevel government is how we adapt to globalization o may be it will deal with greater capacities o nation state is too small for big issues and too big for small issues

The nation state is not going away Regions are also expanding: UK, Spain, Belgium based on the principle of the subsidiary

The Evolution of Canadian Federalism


The Essay assignment Before the readings were limited

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The topic, the position and the proof of the position, the hypothesis, the method The formal features are the same The addition thing is the research There are more pages, more information to support the argument Collect information to portray more information Additional information is key and different sources is key [books, journals] Canadian journal of political sciences, American political science review, these are the most demanding things to read Collections by different authors Newspaper articles, different subject headings Each topic is about a general question and its relevance to Canada and the case study, the newspaper articles are useful for the case studies Academic sources for the general theme Globalization and the federal governments position on the environmental change Federalism and health policy health care Canada mediacare Canada healthcare federal I am looking for the federal and provincial relationship over health care in Canada, the minister of health care in Canada

Federalism, the distinction between the ideology [set of values and norms] and structure [institutions] Canada is now decentralized This is not how the federations started High centralized in the beginning The BNA Act was highly centralizing Canada and Switzerland are the most decentralized The lower tier control more money

In the BNA BNA More powers Residual power [sec 91] o Main federal powers o Peace, order and good government the fed government may legislate to achieve this, unless the power is given to the provinces o Everything not given to the provinces, the federal government takes all the power o Residual powers are important, they show which tier is the more power o Where the residue will go o Someone in advance are given the residual powers o Americans gave the residual powers to the states o At the time America was in the midst of a civil war o CND saw that the states were given more power o Every fed constitution has residual powers because everything cannot be foreseen when the constitution was written Main economic powers: T&C, any tax, banking, all the security powers were to the federal, at the time the government mostly protected the boarders rights to invade the provincial jurisdiction Security issues: military, Indians, criminal law, treaty powers Concurrent powers: agriculture and immigration, but feds have the supremacy in those fields, making the powers more federal than provincial 1. Ottawa more powers 2. Rights to invade 3. Modest provincial powers in 1867 Ottawa could almost walk over the provinces The almost have no sovereignty in the BNA Ottawa more powers and right to invade Wanted a centralized federation

lieutenant governor: represents the crown on the provincial level and this is appointed by the GG (actually the prime minister) o colonial type of a relationship between the fed and the province o if a provinces passes a statue, they can pass it to the fed government and decide whether royal assent will be given, this could be in the provincial jurisdiction governor general, the head of state for federal business, not really a colonial emissary from London

reservation; to block provincial legislation with the help of the LG disallow the legislation o within a certain amount of time, the federal government can overturn provincial jurisdiction declaratory power building of the transnational highway o Trans-Canada highway o Declared the highway being of national importance o Even though transportation was in prov jurisdiction

modest provincial powers [sec 92] fewer fiscal resources - direct taxes [2] and natural resources [5] direct and indirect taxes J S Mill is the source of the distinction direct - the person who pays it is being charges, income tax is direct indirect - the person collects the money and then passes the money on to someone else, sales tax when you buy something at a store customs duties were big in the 1867 natural resources were not as important in 1867 social institutions were given to the provinces o hospitals o charities o education o municipal and local government

o property and civil rights (civil and private law) [2] Decline of the federal dominances, 1867 1930s the provinces rose in importance because: 1. fiscal means rose in importance [income and sales tax, property tax] the feds can do these taxes as well direct taxes are the most important taxes both levels can tax whatever they want social policy changed, the welfare state had to be done on the prov level until 1949 this was the highest court in the land in Canada the SCC is appointed by the federal government no one in the JCPC owned their job to Ottawa committed to a liberal view of the world, small, checked government saw the fed as being too powerful, gave more power to provinces interpreted the text in favor of the provinces saw fed predominance as dangerous converted centralist federalism into classical federalism the two tiers are more or less equal key thing of how it treated the POGG [peace order of the government] POGG was the basis for fed claim in disputed areas Fed - Not written, must be residual, POGG Prov - property and civil rights Local prohibition Casa (1896) JCPC drastically restricted POGG o Ontario was fighting Ottawa the most o The court POGG is not everything o Make sure its not on the provincial list there was no welfare state

2. the judicial committee of the privy council (JCPC)

Alcohol regulation who controls is?

o It has to be nationally important, local prohibition is not national important, it may be residual, but its not federal o No, even if POGG says what it says, the power may still be provincial o May sound like they should not have done this o Reduced fed power Snyder Case (1925) went further, POGG only gave Ottawa disputed powers in an emergency Strike in the hydro sector Federal government tried to resolve the conflict JCPC said the fed had nothing to do in this area Went one step further, Ottawa can never use its POGG power to impinge on the provinces unless there is emergency Restrictions of POGG 1. Only matters of national importance 2. Only in emergencies Social insurance Act Reference (1937) Blocked Bennetts New Deal 1987 Ottawa had pervasive powers JCPC pushed hard against federal Ottawa could not even enact a New Deal [3] Wartime centralization, 1939-45 JCPC allows Ottawa to use the War Time Measures acts to take proc taxes and powers needed in wartime The war measures allows to suspend liberties Its an emergency, may be not at the peace time [emergency view of POGG] Went from being highly decentralized to centralized Took all the taxes War ends, but Ottawa still has all the money The difference b/w 1940 and 1945 is that fed has all the money Depression not an emergency No new deal in Canada

The feds the provincial bag of money The province could create a new bag by raising the taxes The feds controlled the loot after 1945

[4] Cooperative federalism, 1945-65 After WWII the welfare state is built under federal leadership 1943 CCF was gaining power Liberals in order to offset CCF offered the welfare state reform Because the war was fought for the country no the provinces it was seen as necessary that there would be a national welfare states 1940 unemployment insurance was read by the feds, brits allowed this pension [51 and 65] this is under control of the feds because the constitution was amended by the british court in other cases, things under provinces stated under provicnes provincial jurisdiction, with Ottawa handing back some of that money to covel the costs the fed gave them money but the money came with strings attached [conditional grants] preserving much of the federal power poor provinces also get equalization payments This was cooperative because the provinces were weak and they would not object that much, Quebec went along eventually, there is not much they could do, there was a nationalistic atmosphere after the WWII, one was senior and the other one junior [5] The country changed between 1960s The quite revolution in Quebec At this period Quebec also began challenged the federal government its no longer the courts, but the federal was being challenged in the 1970s the western provinces began challenge the federal government (natural resource boom) Province building (a lot during the 1960s and 1970s)

The building of the welfare states hire bureaucrats these have to be experts Provinces had large staffs , capacity to plan for themselves by now the powers to intervene were extinct by extinction

[5] Competitive federalism , 1965-95 Friction and conflict The fed is being pushed back by the provinces Over the 30 years there is a lot of pushback the fed wanted to spend less there was substantial decentralization In 1977 block grants for health, universities was a lot less conditional , for the universities not conditional, health modestly conditional health if you dont meet standards in the health care system, we will punch you in 1995 grant extended to social assistance [unconditional] almost no fully conditional grants remain those changed by the constitution amendment are still at the federal jurisdiction the money given to the provinces was cut

Ottawa lead the conduction of the welfare state and then lead to its dismantling Constitutional negotiations would have restricted federal powers [spacial powers] Meech lake and Chrlottetown had it gone through federal spending power would have decreased

Federal government can raise and spend money anywhere it wants Is Canada too decentralized? Changed back and forth from centralized to decentralized At the begging centralized 1930 decentralied war time centralized It can spend money in the prov jurisdiction but they cannot regulate it Over the years, the provinces that spending power should be constitutionally limited, provinces complained about being bribed by the federal government

The provinces rose up and challenged traditional powers From mid 1990s collaborative period? health care a little bit collaborative priority spending shortages of services spend more money but spend it more wisely limited collaboration health accords [1999, 2000, 2004] restored 1995 transfer cuts in 2012, Ottawa offers new health finding formula with no provincial input [there is no collaboration here] - no talk of priority areas Too decentralized? Political matter, conservatives and liberals/ndp differ priorities and parameters for programs standards some national standard setting [for libs and ndp] Harper does not seem to give a fuck about health care No promise of oversight in 1995 the transfers were slashed provinces had to down size their health care systems since then, there is some revision & restoration of the funds there is a little collaboration Disengaged, the provinces have increasingly took more authority Co-operative era greater equality between the two

the provinces never agreed to dictation/monitoring from fed

conclusion, disengaging, ending 1945 overlap

[1] Legislatures [January 10, 2012]


224 Lecture 1 | January 10, 2012 | Legislatures Legislatures Strong role: making laws Weak roles: represent, deliberate, audit

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Has the strong role has been lost? Depends on the country, power depends on: How strong should legislature be? Trade off between efficiency and inclusiveness Canada Party discipline is very high How does the cabinet control the PR? Government caucus: sticks and carrots Control of the opposition PRs remaining roles Strong ones are dead, but what about the weak ones? Media politics Throne speech debates Budget debate Opposition days Oral question period Standing committees Legislative committees What are standing orders?

Lecture [January 10 2012] Legislatures


Legislatures: the formal bodies in democracies, they change and create laws Legislatures have two kings of roles Strong (making or not making statutes) Weak (representation, deliberation, audit of the executive) Represent the votes that elected them in Ottawa Deliberation over the scope of ideas Audit of the executive, making sure that the EX is not crooked and is acting responsibly Question # 1: Has the strong role been lost, endangering the weak one?

The formal role of passing laws is still there, but the PR has lost the ability to control the process, the process is now controlled by the EX This made representation and deliberation matter less PR has become a rubber stamp on the statutes created by the cabinet Is this true? Depends on the country in question, while in US the LEGI is powerful, in Canada it has become secondary This variability depends on two factors: Is the power fused or separates How strong is the PD (how much do legislatures have to follow the party line) SoP + Weak PD = strong LEGI || Fused + Strong PD = weak LEGI PD has reversed the power relationship because the cabinet can now control the other MPs FUSED SEPARATED STRONG PD Parliament (Canada, UK) Weak Congress (S. Korean, Argentina) WEAK PD Strong PR (Italy, Poland) Strong congress (USA)

The problem is not equally pressing everywhere (the loss of the strong role) America and imperial presidency (only in FP, not domestic politics) Questions # 2: How strong should the legislature be? In PR systems they are quite weak There is a trade off between efficiency and inclusiveness Even though the American congress is more inclusive, its probably not representative of the American society In America, in order to pass something there is a number of block needed to be passed The veto points in the American system The bill must pass both the house and the senate PD is weak, there is no guarantee that the party will vote with the president Strong and powerful committee system Veto points allow the privileged interests to get involved in the system Canada and the Golden Age The golden age 1840-1870, before PD 1878 secret ballot is introduced Now PD is very high, even when compared with the UK If an MP votes against the party, on budge for example, he risks being kicked out How does the cabinet control the PR? Government caucus: discipline the party and reign in the opposition There is a reliance on the back bench MPs who want to move up in the system Draw on the ambition of those people, because all they want is controlled by the PM and the cabinet Sticks dismissal from the caucus, withholding of funds, not signing the nomination papers, nominating other candidates Money is usually raised by partys central apparatus Maverick MPs, those MPs who are not going anywhere Carrots promotion to committee chairs Those who are higher up in the party hierarchy have better chance of being re-elected The partys big cheese: money, status, re-election

The movement within parties: committees, parliamentary secretary, secretary of state, cabinet Secretary of the state is not in the cabinet, but may have EX power Cabinet: decision-making apparatus Sticks and carrots affect MPs Party whip Oversees the discipline Important for the opposition as well, because there is discipline there as well Shadows the cabinet in particular policy fields Control of the opposition Convention: the government must govern Opposition may delay/object, create dialogue and audit the government

Electoral Systems and Democratic Reform 12-04-16 11:14 PM


The electoral systems why do electoral matter they affect the expression of the popular will we elect the people who will govern us single member plurality system different systems can lead to different out comes [even if everything remains the same] SMP v PR PR: a partys seas = % votes [35% of the votes gets 355 of the seats] SMP first past the post the country is chopped into many units they are like 308 horse races over rewards the 1st party will punish the weaker parties the last four elections with a majority the winning party always gets more seats than they got votes NDP less seats than votes the system of elections leads to results that the % of votes does not accurately reflect the amount of votes

the electoral system

in 2011 with PR Canada would have more coalition government rare for a party to get over 50% of the votes in any system that has a PR system, hard to form majority minority gov v coalition government if they know they will never form majority would form coalitions policy preferences - for a coalition

Min votes majority government 3rd parties always punished Who supports PR?

Non governing parties federal ndp used to like it provincial ndp can win elections with SMP

SMP: distortion of democracy or source of stable government leg should reflect the will of the people the major counter argument, in the 4 elections the minority of votes was converted into majority government means stable government, no short term demands, after the term holding the government responsible or support him SMP adversarial politics? Cairns thesis and Canada [1968] disadvantages of the SMP survived a long time and still relevant In the Canadian politics only makes the situation worse punishes weaker national parties The US and Canada more coalitions, talk to each other, respect each other more political system over all would be less polarized with PR there are always going to be coalitions, unstable, so many parties do not know who to blame or reward

SMP is particularly undesirable in Canada because it rewards division regional parties Alternatives 1. Two candidate majoritarian [France], the first and the second have a run off In France there is a run off between 1st and 2nd candidates voters rank them in district you rank them from 1 to 4 if there are 4 there is still only one distict drop with fewest 1st choice, distribute their votes to their 2nd choices 2. Preferential ballot or alternative vote

does any one have 50% if not, repeat until there is majority the winner is the lest disliked candidate first choice might not win so she looses because she is disliked by everyone else

3. Single transferable vote (STV) Ireland multi-member districts [ex 5] you rank the preferences from 1 to how ever many candidates there are candidate needs a certain % to win a sea [20% of the first choice] you need five people to win If top gets 26%, transfer 6% to second prefererences repeat for all those with surplus boosts 3rd candidate you go to the bottom with least 1st place votes and trasfer them to others eventually youll get 5 people with 20% mixed member proportional [mmp] modified PR system PR for overall party balance, but with individual districts 2 ballots, 1 for SMP member and 1 for the party list parties with lowest % SMP sears than votes compensate with extra seats form the list Candidate debate In recent years the debate has gone outside of ths

in Germany

How can the district system lead to proportional representation

Parties and the party system


Parties section C of the course outline part 1 broad overview of the state outside inst setting of the state past 2 the constitution and the institution what is a political party protection of civil liberties part 3 things outside the formal state, but are important for the state

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non-state organizations, private not part of the government their objective is to control or influence the state ex [the government] share the objective of influencing the ex, but they themselves are not a part of the state, they are private club

consists of people:

may have other objectives effective number of parties which exists in a system, the power of each and the relations among them the important ones are the more powerful ones so the communist party of Canada does not matter effective parties are those which are big enough to matter to other parties Who has the power, the balance power the parties which matter to each other all members are important they have more or less power over you the conduct in the home situation, in the home environment there is a web of relationships which exist in the home

party systems are more important

Party system

party systems are like families

the conduct, power, status, the character of personality affect each other, affect you and you affect them

[1] types of parties

a. who controls the party elite or mass elite parties are controlled by a small group of people emerge in legislature, not in the society as a whole most early parties in the 19th UK, 19th, loose coalitions of parties lead to more organized parties tend to be run by leaders large membership gives regular people more say the const say that conventions have to be held frequently resolutions can be proposed by members usually non-PR origin unions, farmers, NGO's - union base tend to carry over the mass base Emerged in 19th, along cadre lines [libs and conservatives] NDP mass party PC mass party no party is a pure example of either category there is spectrum iron law of oligarchy if parties want to win and parties want to win because they want to control the government why does this happen the elite is more likely to have PO polls, experts, etc if you want to win you have to use this information

start in legislature

mass parties

after become a party Canada

real world

overtime there is tendency to centralize

mass membership can propose crazy resolutions, may not be consistent with opinions

weakening of the mass there are some with more mass orientation but the successful ones will usually have an elitist orientation Committed to separating from Canada Its mass orientation has remained stronger than for the fed NDP this is an exception which proves the rule they run into problems because the members can prevent leaders from going into the direction they want to go

Canada PC

the leadership will tend to do what it wants oligarchy is still trying to empower itself

resisting the iron law of the oligarchy parties need members and money to win even for an elitist party, the party has to be big money is importnat to fiance the campaign have to convince people to join and give money set of loyal followers the party const has to have the capacity to elect people to make sure that people still think they have power in the parties there needs to be an opening up have they broadened for policies? policy resolutions passed by the masses can and usually are ignored large apparatus to be successful interested to get money, not interested to hear your opinions Elite parties

mass parties can persist, but they will have a tendency to more toward the elite

oligarchic tendencies b. brokerage v ideological parties

brokerage aggregate interests, enough for them to win there are no underling philosophical believes different interests are lumped together elite parties tend to have this orientation

ideologies wants to change the world articulates ideals and interests green parties no one wants to pay more in short term, but in long term the benefits would be great the fate of the parties mass parties, over time, will move to elitist system not as easy to say that they will move from ideology to brokerage these often have mass origin car manufacturer

can be on a continuum between brokerage and ideology

do successful parties form cartels? what are cartels? Once there is a stable set of parties, they work together to keep other parties from coming into existence how they are finance and regulated collusion between existing ones from coming into existence, how much money you can spend depend on how many votes you got in the previous election [2] The party system [social origins] the system as a whole, each member act position-ally within the system, the character of the parties is shaped by the system parties act positionally in systems reflect broader social cleavages who is dominants and subordinate 19c parties followed national revolutions [emergence of the nation state] those with limited support status if the party may be eliminated

social cleavages

social conflict within the new system came inst with parties

emergence of two parties the libs tended to emerge in the conflict with the conservatives there was no universal suffrage, property qualifications poor people were not in the party system only capitalists could vote the parties reflect competition between capitalists and aristocrats

in some countries, the conservatives took on another cleavage the secular v religious if the conservatives did not do this, catholic parties emerged

industrial revolution universal suffrage new parties by early 20th century large industrial base masses

agrarian parties challenge urban dominance socialists to rep workers, challenge the working class after 1917 the communist parties split off form latter, challenge reformists revolution rather than gradual change splitting the working class vote social and communist threat to traditional ways of life

fascists emerge to challenge those cleavage structure frozen after 1920s cleavage structures were largely frozen small farm parties started to merge into urban parties the NDP does not get most of its votes from blue collar voters while collar, public sector employees the social base could change over time

there are waves of parties after the extension of suffrage

once party is in place, can shift its base but cleavage structure remains

post materialism cause parties to thaw green parties, new left parties feminist parties did not survive most did not survive decline of values rejection of new ideas Wide range of possible parties Different origins Firm social foundation System partly freezes, new additions in the 60s

to challenge post materialism new right Parties The German party system 1 Christian democratic union [conservative, catholic] [CDU] one of the two main parties embraced the catholic vote aristocrats are not as important anymore tradition, small towns big business will support this party late 19th out of the working class party not socialist anymore free market strong party

2 social democratic party of Germany [socialist] [SPD]

3 free democratic party [liberal] [FDP]

4 green party [post materialist] [1970s] 5 left party [post community] [1980s and 90s] 1989 after the wall collapsed most people in the east were happy to get rid of the communist system

6. Christian social union

Bavarian equivalent of CDU very catholic regional replica of the CDU

map of German history in the party system & different social components

institutions also affect parties social foundations to political parties the social make up is not the only thing that matters not all social cleavages [may die out, there are few true Christian parties] lead to differences in parties, farmer parties do not exist anymore same with communists and fascists possible for them to overlap with 1 party division, over more than one social cleavage, good example is the US: REP and DEM overlap in the us there is the same thing in Canada liberals and NDP what determines with how many parties you end up with?

Institutions influence whether cleavages lead to part divisions [a] electoral systems are important for this SMP favor big parties and punish small ones, contrast PR, etc [all other systems] Duverger's Law SMP - 2 parties and PR - multiparty system small parties tend to be killed off under smp the German case, 5 or 6 in a PR type system different social cleavages represented in the multiparty system US two parties, SMP SMP - more cleavages overlap or they die out progressive party there is no base for the party to survive exception to the law highly relational voting, Canada the law will probably not apply a lot of parties in the system, this happens in Canada because people are so regionalize people give different votes to different parties

what is SMP combines with regional voting

Canada two party system

what kind of a law has exceptions? Is it not a law at all how do you measure what is an effective party? federalism also matters the electoral system law is generally true , even though there are exceptions Decentralized federation regional parties parties wouldnt parties have an interest in manipulating institutions? If they shape the party system and Im in the party system ill have an interest in manipulating institutions how many parties? How focused they are in the federal level how do parties respond to this early 20 almost all countries had SMP most moved to the PR systems in the early 20th century why did they change? Socialists threatened liberals and conservatives before the rise of mass franchise, capitalists v aristocracy old elites face a threat form the socialists social origins layering different groups create parties institutions mediate on how the party system works [smp v pr] & federalism both matter society and institutions Regional parties represent regional views Weaker fed and provincial links: CDN! Liberals on the prov and the fed levels differs where the lower level of government has more power

almost universal SMP system

The social foundation mass franchise

in the SMP the socialists may come between the two and take over the government

not a problem in the US and Canada, or uk where the old party dies out [liberals] Would win the government, even though might not have majority of vote CCF most popular party in the county in the last minute the system was changes, CCF won many sears but was in minority

PR was desirable because it would prevent the socialists from winning vs divided right

example BC CND 1952

Canadas party system


the difference between Canadian and other parties Do parties differ? to what extend does it matter which party get elected? CDN brokerage parties social cleavages create different parties the party system also reflects the political institutions if its SMP the number of parties is reduced

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if inst work, then parties might want to manipulate institutions

theory by Downs, if the voters are normally distributed with most in the middle, parties will not differ fundamentally this is because parties want tot win they will want to attract as many voters as possible will move to the center to capture the marginal voters the central voter is the marginal voter and they decide the election who ever gets the 51st vote of there are 101 votes right at the center there was a lot of post-industrial theories that the politics are over not everything is like this what if there are many voters on the left and on the right and less in the center multi-party system harder to move to the center this is so because other parties might cater to the extremist voter looks like the camels hump there are less willing in this system for the parties to move to the center

during the time of Downs

bi-modal distribution may be we are not in the center and may be parties still differ b/w each other different countries and how this changed over time is there convergence of parties

Canada's party system 1] The Canadian Anomalies a] until 2011 the main parties have been the libs and the conserves other countries developed other parties in Canada the originating parties stuck on as the main parties in the system they were able to stick because they are not divided along social/class cleavages the did not have a clear social basis as a result there are no ideological difference, as we see in Europe there are no set interests ideology does not matter as much, those who can form a successful coalition is more important more brokerage than ideological franchise structure: think of mcdonalds regulations are set by the elites hyper-cadre on policy [super elitist] choosing of candidates is decentralized local campaigns but there is a move on the part of the leadership trying to involve more minorities, women, etc mould 2] why are parties like this? social credit, etc there is a tendency for the small parties to also move to cadre structures local elections are at the local level, under a firm policy mandate c] the large parties were challenged by minor parties but they were unable to break the the framework in the developed world fair to say that Canada has some anomalies in regards to its party structure Canada is becoming less different

b] main parties franchise structure

[election never about class and ideology]

Underhill the origins of the CDN party system to understand the system you have to go to the beginning in the being, there is the province of Canada the province has a unified legislature when they created, the number of seats were the same for ont and que this state was deeply divided and these two communities were equally represented in the government [different religion, language] the social class was not the most important distinguishing factor there were others more visible ones language, religion, region, urban/rural double majority convention in 1837 there was a rebellion against the UK colonists before they were separate we will put them together and we assume that Quebec will assimilate into English Ontario

but people knew better that the Quebec will not assimilate their weapons o language, religion o revenge of the cradle o their numbers declines but not very much convention of DM emerged quickly in CDN history the choice was made to compromise to win you had to make a deal which would bring together the two different people

governments became about deal-making the party which came together in the province of Canada the liberal conservative party was the original party then becomes conservative, later progressive conservative this system expanded to the rest of Canada the lib conser extended their power to the rest of the Canada they were not ideological, so they tended to create deals were good at offering people things they wanted so they were able to win

the party was not liberal and not a conservative

its only goal was to win through deal-making later the liberals came about, they were more ideological, but they lost

1896 the system becomes fully brokerage both parties had to do this and not rely on ideology the libs won after they adapted the brokerage methods the libs became better at brokerage than the conserves by 1890s the people in Manitoba were English, so they out numbered the French the conserves wanted to intervene in the school question but the libs had a different plan 1] told quebce that they should not care about Manitoba 2] the question was about government power, if it intervenes in Manitoba now what stops the government from intervening in Quebec talk to different people about different things winning requires money parties were not subsidized by the government in CND the only place to get money was the business community to win, parties had to be good to business if parties cannot move away from big business they will not be able to broker all interest 1921- the progs won, in the west particularly o farmers and workers o wanted free trade and BB wanted tariffs o then NDP and social credit

business links provided the pathway for small parties after the war

Interest groups and new social movements12-04-16 11:14 PM


There are sub components Interest groups and social movements [1] Interest groups in Canada & the US interest group non-government organization with common interest groups the reading [a] North America: A pluralist setting IG work in a pluralist environment seek to influence the government in free and unregulated free for all anyone can set up a groups there tends to be a multiplicity of groups different groups are powerful in different sectors Pluralism: mostly competitive & unregulated policy environment is it really true that interest groups are bad interest groups form to make a contribution to gov (according to him) not all IG want to contribute to government IG are formed for selfish reasons no one forms an IG because they want Canada to be a better place IG want specifics promotion of common interests stay outside the government apparatus they seek to influence the state from the outside the government or the leg contrast this with parties parties participate in the government example: green peace does not seek office, they do not seek to from the gov They have to be answered separately

Pross IGs might start as issue-oriented groups and over time they might institutionalize Types of INTEREST GROUPS Issue oriented Less Less Less Narrow (one river) The transition from one to the other institutionalization Some might start off as institutionalized under what circumstances will institutionalization be successful? Selective inventive Funding The problem of selective investment more problematic for envi groups than a farmer groups if a groups succeeds, farmers will succeed and their benefits are clear only those who belong to the farmer groups will benefit farmers are more likely to succeed because, if I want to benefit I need to join the group, everyone will join the groups because they want the subsidies this assosiation will be more powerful how are you going to get that money? We all want different things needs all the recourses funding is important Is they master selective incentives Business, already organized institutionalization Formal organization Funding Expertise Issue Focus Institutionalized more More More Broad, prioritized

selective incentive: you only get the benefit if you are a part of the organization Environmental group Environmental groups appear to be successful [B] policy networks and communities 277-278 1. key IGs & state agencies differ among sectors pluralism again the kings of IG which are relevant for shaping policy will differ b/w sectors state agencies, which they try to lobby will also be different groups come together to form policy communities theory of rational choice might not capture everything I might join green peace because it makes me feel good The utility derived from two groups is different I might want clean air I might support the groups What if I have to play $100 for it Air is a pure public good No envi/ group can create selective incentive These groups should be less successful successful IG will be able to master selective incentive hairdresses monopoly

community network Levels of Analysis the community there are different relations between different entities within sectors sector level its not adequate to look at them in isolation organizations, state and non-state links of coalition, antagonism exist among different interest groups

1. Macro society as a whole 2. Sector relatively distinct policy fields 3. Micro individual group/agency If we look at sectors we can understand what is going on in the society overall Political economy the sectors can be subsumed by the broad system Business power broadly true political economy How the policy communities look dirigiste clientalist the important actors in the society the US example regulation reform those who were affected the laws drew up the law, the society dominated policy formation pluralist power flows in both directions, compare and contrast with corporatist Successful IGs adapt to institutions Result: CND and US groups behave different If they change over time The groups have to change and adapt over time There is a change between their behavior open access there are many actors the exist in the sector level, not macro level power from society to state policy likely to be dominated by the bureaucrats Depends on who dominates

In Canada they are ex dominated Bureaucracy Issues can be turned around IG in Canada change in the institutions the changes of the charter modified interests and changed the behaviour of IGs go to the court to beat the government with the changing context, the groups within the envi change successful groups might change its approach the important ones are not in the public sphere target of the relevant actors positive relationship over time inside strategy, not outside this model developed in the 1970s and 1980s there might have conclusions made after IG interests were alienated, they can force the government to change but if they are public, they probably lost highly educated they have a lot of expertise they work behind the closed doors you dont want to challenge them form the outside and you avoid confrontation on the inside you take an inside strategy this is what the successful groups did you dont hear much about the successful groups influence of the public opinion is not important for these groups they may target the cabinet of the senior bureaucracy

now outside strategy might be useful esp true with charter issues even if the government does not give you want you want you can go to court and argue your case this is important for some areas gay marriage, human rights, etc

Standing committees with the changes US groups have always been more confrontational effective way to build a campaign the groups lobby the congress and ex agency formation of iron triangles courts be loud attract people IG, lobbying is at the center of the American political system diverse, separation of power power is intension everything is more open views of ind politicians matter a lot more than in Canada inst groups might be more loud More powerful even in the context of strong government setting of agenda might develop their own agenda these are public from government to committees

Iron triangles Court In the US they are more visible Are they more influential? [d] privileged position of business [the role of the non-government in shaping policy making] network communities , inst change over time Structural control of the government some groups do not have strong organizations furthering their position but the business has a lot of organization capacity behind them this organization influence allowed them to gain the position they are occupying now the business does not have a fully structural power because when the public sentiment against the business is high, the government is able to enact politices agiant business intersets structural power politics and markets there is something else to this markets are a prison on policy making the government respond to well funded IG this is true or are they only more visible politics over the southern pipeline extension long history of charter rights interest groups can use them as their outside strategy b/w congressional committees and agencies and insert groups form policy outcomes over time there is stabilization of the relationship over time

the government needs the business the gov want the business to perform their function well business will not awlay get what it wants the gov will act agaist the busienss sometime but often they get what they want and this ability has nothing to do with them giving money to the government

differentiation of the society the government with differentiation, how can we get economic growth? In the long term the government will be heavily influences with their desire to induce people, so that there will be economic growth Canadian council of the chief executive post 2008 bailouts how much IG pressure was used or needed? The banks did not have to do much growth is essential for political prospects they do not wait for the organization to knock on their door they will do things which are most likely to induce decisions Most of the business activity are done by business important for them to get re-elected economic voting, the economy is important for politicians the state and the economy they are relatively autonomous they still interact they are codependent because the government need business and the business needs the government

the government reached out to the banks they induced them to stay in business because theya are important for politicies

how can we explain the government do anything which is against the business interests NEW SOCIAL MOVEMENTS social movements non-government networks, orgs, (IGs) new social movement and old social movements in the 1970s and the 1980s post materialism identify politics political culture theories something was changing in the attitude of people in the western democracies there are material side, there is also a non material aspect of the moments they are non government networks the goals focus on post materialist feminism ,environmentalist, etc these equality seeking and difference promoting the government can do things against the government does not address this when it comes to this one interests, economic, do not have to have well organized and financed groups

Political Economy
Social movements new social movements post materialism the literature on the new social movemetns anti-elitism tea party oppose some kind of main stream power structure feminists, environmentalisms some activities are questionable agendas may be cultural equality movements difference promoting non material basis change something which is not specifically economic gender, idenity, envitonment post material kind Network of activities Might include organizations Web of actors Some organized Some are individuals Share common agenda and goal Not a single entity Have been around for a long time New social movements

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some time even conservative causes may be anti-elitist tea party

anti-elite difference

what is the difference between the new soical movment and tea party there is something new in politics transnationalizations mainstreaming if a new movement is challenging from the outside trying to change the world engleheart post material politics globalization 1980s and 1990s may be eroding the powers of the state NSM are seen as transnational, they cross boraders more easily examples on the slides makes the movements strong and flexible and adaptable surprise to status quo politics networked, diverse organizations in sea of other acitivites sea of other goals in the tea pary there are a lot of economic and non-economic issues the comments by Rush tea party is not cool according to NSM people tea party people oppose this tea party definition of the NSM fits quite well NSM can be right wing and anti-elitist they say that they are anti-elitist, but they seek to promote ideas which would benift the rich over the poor

iron law

danger that overtime will become main stream first, extreme overtime, to work with those inside you compromise got too far on the inside is not critical enough of the status quo liberal feminism v extreme feminism tamer version mainstream sold out may result form government funding and cooptation

of oligarchy start of as mass parties evolve over time into elite parties in order to succeed there is a lot of variation NAACP v NAC v Greenpeace as IGs that are part of NSMs NAC womens organization

NSM group mainstreaming Group NAACP NAC Greenpeace Pollution probe outcome of mainstreaming is mixed Varieties of Political Economy groups may be still successful mainstream is not necessary evolution is fluid and variable over time contrast parties institutionalization may not lead to mainstreaming Government support no yes no No Mainstream yes no No [?] Yes Healthy yes no yea yes

States have various relationship to the economy the relationship b/w state and economy all capitalist and democracies political economy is a macro level analysis Political economy 1] state direction 2] corporatism and pluralism 3] 2-D scope for all countries 1) State direction: strong and weak some states need more state than others weak is not necessarily bad take off capitalism in the 16th and 17th century the system as a whole society as it transcends spectral differences macro level to generalizing too vague and abstract? when its well done its not true variation diff in how economy works how much equality and inequality how economically viable a state is similar countries and diff b/w them the public [sovereignty] and social life [goods/services/value/some are better off than others] the state differentiation from the other two state: set of inst, broader of social life, legitimate authority

private sector economic relations capitalist development supported and are co-dependent

differentiation happened to all but there are diff levels of it for diff countries economy seemed ineffective to take care of itself put in place property system true for all, but this was all which req is some but not others UK, US was sheltered Early industrialized weak state embedded fragmented responsive on a micro level immediate self interest of firms gov reacts to immediate self interests embedded with non-government interests fragmented laissez-faire only needed a weak state business people just did their thing made sure that there are minimal conditions for economy they did not need state to get into the way english speaking Canada is in the weak tradition those who speak English weak tradition English tradition US could easily protect their domestic market

the role of the state there is no central agency which drives the eco agenda diff ministries and departments at fed level - energy dep - manufacturing dep - finance dep

laissez-faire France, Germany, East Asia industrialized later problem was not sheltered (Fr, Ger) like US was others are already making stuff they have economies of scale they can make an average cost for less cost youll pay more should help the immediate interests the core of weak state state out of the economy for most part do not get into micro management of economy dont define future economic well being of the sector involvement short term

how can you succeed 1. tariff barriers 2. strong states strong states they do not have the needed business class with the needed knowledge and incentive before WWII in Ger was highly involved Now banks are imp in Ger in Fr state always strong

Japan of France after WWII bombed out, had to start over state protected tariffs wanted to get rid of them eventually baby capitalists v mature capitalists develop the talent by the state development funds cannot compete with each other, have to cooperate purpose: not to beat competitor, but over take the mature capitalists extreme level of technical expertise as to how run diff aspects of economy these things should be done show them how to do them development behind a tariff barrier, which eventually would decline

in their state

state autonomous in from strong state autonomous from economic interests internally cohesive direct intervention bigger engine for the bigger task cheap loads R& D assistance form short term business interests state has to plan ministry of int trade and industry to develop the agenda has to be cohesive instead of laissez-fair

French Variations over time and between space Strong states tend to weaken over time in France globalization 2. relation within the private sector itself coordinated more coordination corporatism how actors within state interact weak will beat the strong may become weaker b/c government cannot make good decisions convergence on the weak state model this theory cannot be disproved or proved 1980s 1990s privatizations there is still circulation of people b/w in the state and economy once the eco is developed tariff levels are lowered agreement on practices internationally once there is dev, state cannot keep up with development states dont become weak, but weaker guiding the development of capitalism state makes long-term business decisions form the inside the state

corporatist environment Germany Strong labour unions corporatists - more successful in manufacturing cooperation v pluralism industry level resources for tech and skills there are some areas where they pool their resources because there is cooperation cooperation esp when it comes to skills historical relationship business tend to work cooperatively with them for social skills and benefits company will give more money for training business will agree to pay for skills because people will be more productive industrial workers make a lot of money in Germany trade surplus in Germany German worker, despite making more money, is of more value they are comparative despite their high wages because they export more aboard business are linked in long-term to banks for investments business cooperate on R&D, finance many be with union in skills, social benefits variations in con Europe, east asia clusters of companies work around one investment bank those relationships are long term the loan is going to be paid further down the road company does need to worry to be profitable in the short term has to be successful in long term

in American this does not happen They will not share information

pluralism business fight each other English both weak and pluralist Different emphasis on equity/inclusiveness v liberty cooperation liberty is pluralism more efficient Germany is more efficient not before, collaboration is just a waste of money competition is more effective our society values liberty more each does their own thing balance of interests inclusion of other actors reflects interest group life see each other as rivals fight unions unions do not want to sacrifice in the short term less cooperation at the national level, relations are free for all business fight each other weaker unions US, UK, Canada

globalization may = convergence four cell model A+B 2-D model, with 4/5 distinct clusters of countries Welfare state variation welfare and extend of the welfare state what is the welfare state 3 main program types the building blocks of the welfare states 1. selective for most needy social assistance [welfare] a. these people have nothing to fall back on b. you only get is if youre extremely needy reduces inequality welfare states are capitalist democracies b/w absolute inequality and absolute equality Marshalls social rights the welfare state market economies create inequality there might be other structural factors inequality goes with capitalism reduce inequality reduce the extend of the market economy the amount of inequality in capitalism is more than in democracy may happen on the pluralist model there is less certainty on this than before manufactures better in corporatist service better in pluralist [good for finance] argument before, rich countries are going to lose their manufacturing anyway in anglo saxons countries may be went to far with fianance

around selectivity inexpensive stigmatized you have you have nothing to quality there is a limited range of people who will get this there are more people who feel like shit by going on welfare you dont have to worry about those people modest otherwise creates disincentives if they go up, for some people it makes more sense to go on welfare benefits have to be kept low

2. sadasdasdasd 3. asdadadad

12-04-16 11:15 PM

there are differences between liberal democracies Anglo Saxon countries are clustered in the same area English-speaking countries value their liberty They are pluralist with weak state internvetion Growth rates and prosperity by convention measures USA is the highest in the world human development inxed, the USA is not number one Pure GDP various of the models work pretty well, except the model D growth in the recent years, groups D are the crisis economies of today economices differ in quite distinctive ways cooperation and state intervention Welfare State variation Marshalls social rights parallel above varation What is the welfare state? sufferning of the cards lead to an outcome which is different the final outcome is always more equal there is a change between how much equality results in the state There are three main welfare states 1. Selective for the most needy you qualify for being at the bottom of the social ladder social assistance inexpensive but stigmatized ^ because only the most needy get it advantage: those who structure it, benefits must be low

low assistance crease disincentives 2. Contributory social security benefits are related to contributions pensions, employment insurance in the pay stubb there is a dediction for pension and EI at 65 people qualify the benifts you get depend on the amount of money you contributed to the system the more you earned, the more you contributed, the more you get at the end employment insurance deducated from pay as long as you get minimal requirement you qualify for benefits those benefits are roughly proportional to the amount of money you contributed unlike selectivity this one gives you based on your contributions beniftis are related roughtly for your contributions higher benefits for many excludes unemployed gendered regressive taxes market income after the EI benefits more equal those who contribute are richer those who benifit will be poorer indirect exludes the unemployed you have to have contributed to benefit from them you have to be in the mainstream of the society to benefit form these progrmas

gendered men earn more than women regressive tax has a higher burden on the poor than the rich if you get a job maximum insurable level those who have lower paying jobs pay more %-wise less affordable with aging population those who work pay for current pensions because population is aging the system becomes harder to sustain most developed countries face this 3. Universal benefits all get same benefits if you really want to reduce inequality common with social services Canada: health services education [K-12] university education is 60% subsidized government funding if you have low income universality higher benefits for all solidarity expensive everyone gets the benefit because everyone gets it you have to give the poor and the rich same health care has to be good enough for the middle and the upper classes sociaology of health care in principle, they have access to the same health care system solidarity all people identify with the universal social benefits culturally, we share this in common and believe we deserve it

universality acculturates a sense of right to the benefits the most expensive one payments come from all the taxes Welfare state types welfare states differ just as political economies differ Esping-Andersen: different program mixes, different regimes Liberal welfare states Anglo states Group A on the diagram liberal means market orientaed cheapest welfare states lowest taxes Liberal feature Most selectivity [cheapest] modest social insurance reinforces market workfare middle class rely on private benefits middle class people do not rely on the minimal programs Canada Social assistance for those at the bottom Limited resources Americans social security system liberal model : CHEAP SELECTIVITY reinforces the market workfare - vairaint of selective social assistance if youre employable, you will be put to work the whole system is designed to sustained the market and the market inequalities tries to get people to work hard maximum level is low

middle class people do not idenify with those who are in the bottom third rail of Canadian politics, the health care outside the rest people do not care about the poor because the middle class relies on private benefits we do not really care what happens to those at the very bottom highest poverty and inequality selectivity is the most directly redistributive because it takes from the rich and gives to the poor why highest level of poverty? less eligibility, keeping them at the bottom make sure they get less even if they worked pushing them into the labour forces cheap welfare, only the least advantage does not redistribute as much the outcome closer to the original market inequality SOCIAL DEMOCRATIC biggest welfare state highest taxes mostly universal expensive because universal have social insurance middle class gets public benefits solidarity with poor people Canada has elemets of solidarity thanks to health care solidarity what Swedish people think conservative parties will probably not challenge the universal system in Sweden educated by their culture

to have solidarity and sharing once its there, it reinforces a set of beliefs result: lowest poverty and inequality theres is varitation b/w countires Conservative welfare state Continental Europe believing in the traditional hierarchy different position in the society CANADIAN POLITICAL ECONOMY PRODUCTION TODAY, REPRODUCTION NEXT WEEK Weak state protection pluralism Quebec anomaly Stales Economy and National policy Harold Innis: Canadian staples path political economist Theory Based on staples production raw materials and staples basic thesis was radical at the time economists though markets drove things institutional economists way of doing things become locked in place they can reproduce themselves overtime how did candian economy develop

colony of European countires economically also cololny of European countires use of the colony for economic reasons new france and new England ^ did not expect them to become industrial economies but producesrs of raw materials for europeans markets American colonites one of the problems they had English tried to stop industrialization in America political and economic metropoles: France and UK UK had laws to prevent industrialization in the colonies After these laws were abolished Canada continued to make and export raw materials Succession of dependency Politically and economically by the mid 20th century US Once US became independent, manufactures, we produce raw materials for them and get their manufactured goods Poltical dependency not in the same way as of the UK and France economically dependent on the US Went through different staples fish, fur, wheat, wood, minerals, hydro, oil and gas what role does the state have all of this? State always has a role, even if its limited [property, building infrastructure] Infrastructure costs were especially high for Canada Extraction of raw resources requires infrastructure Canada is also very large, req large infrastructure The cost of building the infrastructure were substantial esp because pop was small

Departure after the confederation National Policy of 1878 of John A McDonald challenges path, but only partly with limited success established the economic base of the country were close with the business elites in Ontario and Quebec wanted to depart, succeeded only party National policy Build railway Fill the country with immigrants [esp in the west] Tariffs to protect manufacturing and create the manufacturing economy in Canada if we had free trade, Cdn manufacturers were too small Tariff wall at the Am border Sold to people in Canada a. railway + b. immigration = markets for c. manufacturing (so ISI) ISI protected domestic markets make things for domestic market no access to other matkerts industry developed only ins certain sections central Canada domestic markets high costs small population economies of scale CND manufactures would always be more expensive Cannot be as efficient as their American counterparts the bottom line is that CND still exported staples

where the country earns its keep is the exporting of staples Another consequences Manufacturing base in the central cnd were not cnd owned foreign ownership was extensive owned by those who cnd were tring to protect themselves in the first place overall weak state tariffs and infrastructure the railroads were very expensive by having high taxes and massive debt US railroads were cheaper, more population gov involvement? departure from the classical weak state model is this good or bad? Innis: what is good Resource based exporting economy innis thought it was bad b/e mature economy needs to diversify and grow would haave preferred stronger state indust approach moving off the natural resource road would take the state to push the economy in the industrial path W.C. Mackintosh: Not bad, comparative advantage determine exports and ours is in primary When free countries they produce what they produce best CND better off selling nat resources and buying US manufacturing POST WAR WW2 1945-1984 During the war, the economy because state lead

Production of munitions to help the UK biggest, largest supported of the UK 1945 the war time economy was quickly dismantled [C.D. Howe] in peace times free market for the next 40 years; gradual change To 1985 GATT erodes NP GATT multilateral trade agreement to erode tariffs In CND tariff wall was gradually dismantled trade with US [which was strong before the war] grew by 1950s & 1960s 70-85% of trade with US US direct investment replaces UK portfolio as a form of economic control is more direct with the US after the war prosperity based on resource production manufacturing base serivces the dom market and was foreign owned, inefficient 1965 auto-pact guaranteed that CDN production = CDN consumption of the big 3 cars signed a deal with the US CDN would produce cars for entire NA market if CDN consumes 10% of all the NA markets we were guaranteed 10% of all production of NA cars important adaptation crucial sector of CDN manufacturing efficiency was associated with the big 3 Prosperity, but with anxiety [1960s/1980s]

CDN increasingly began to think they lived in a rich gilded cage Owned by some one else Everything manufactured was expensive Dependent on the US Move away from this model in the 1970s? Industrial policy From 1960s to 1980s under Liberals Set of exercises Elements of a stronger state model Since then, 25 years later its all gone

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IRAP industrial research assistance program FIRA foreighn investment review agency foreign take overs require singnifican benefits review process for foreign ownerage is it of significant benefit? FIRA FO [forign ownership] decreased FI [foreign investment] Now review but we do not ming FO companies FO has increased when it declined under FIRA closing of the London plant CAT parts manufacturer too small to be covered by investment Canada rules more profitable to move to the US, so they shut it down FIRA may have deterred many FI might have increased productivity Protection of cultural industries mass media cable telecommuncations cell phones are owned by large companies, so the fees are high you cannot be 100% owned

put in place in the 1960s protected not so much change Petro Canada [1975] Crown corporation public oil company would be the major played among the big 5 or 6 Intervention NEP [national energy progream] ^ to expend Canadian control in the energy sector cannot do this now because of our trade agreements tax insentives, cheaper for the CDN company to do business two price oil system CDN oil cheaper regulation of exports now cannot privilege CDN ownership NEP Was going to have a shorr or medium convulsions in the oil sector in the west overall stronger state? very nascent we are going to own the industry and the technology ambition to move into diff style of eco policy japanees/French direction problem domestic problem

1870s national policy - buisness community linked to conservative party by 1970s and 1980s business moved into diff firection business did not belienve in intervetion ^progressive conservatives Marluney got a lot of money from them Liberal leader was ineffective Torries won in a landslide Business wanted free market exporters or manufacturers, but were FO some sectors nationalist but where a minority Bay strees - free trade, suppoted by conservatives 1984 fundomnetal change in orientation reduction of liberal politices 1879 tariff and the Tory strategy Recently [1984] FTA NAFTA WTO Mulruney comprehensive FTA with US was the way to go [1989] would appease albera wanted more free trade

comprehensive agreement upper house, the senate, decided to block treaty had to be passed through the PR to become law in 1984 Mulruney did not want comprehensive FTA with US ^ promised not to implement it had an election over in in 1989, so it was passed FTA eliminated almost all tariffs many were reduced under GATT before eliminated most subsidies interventions not eliminated by the free trade agreement itself most were gone by 1993 ^ FIRA, NEP, Petro-Canada [privatized] , IRAP, Auto Pact, etc. massive changes move from liberal policy exceptions culture banking farming banking have to be Canadian owned protected form the evils of F take over dairy is also protected free trade under mulruney, but culture off limits change in the cell phone companies, cheaping away from the policy

NAFTA FTA followed by NAFTA with the US and Mexisco non-trade barriers chapter 11 tricker for CDN government, change in public policy which might effect a company, the company might take you to court undermining of the profit margin those things have not been done wvery much but could happen under NAFTA WTO multilaters [1994] 1995 and later 87 93 future of the economy WTO world organization CDN small component probably did not have an effect over the treaty the debate, and the ending of the liberal route, more or less irrelevant no say with WTO with WTO we would have ended up with the same results would have been forced to abandom liberal politices Now: many non-tariff barriers are ended what is the conclusion? free market completely? no, in the reading both fed and prov governments have got into cultivating new kinds of tools whicha re compatible with free trade agreements

you can still assist companies cannot discrimante based on their nationality cannot say, you invest in new form of plastic, we will give you RND support, but we have to say this to all companies the green initiative of Onatrio wind tubnies with SUmsung legal to help, but has to be the same for all companies Libs promotion of high technology free trade develop high tech sectros w/o tariff and helping the national companies clusters and networking how eco activity happens in more productive environments the need to comps to work together think of the silicon valley cluster efficient to have small company in high tech there than in Ontario a lot of high tech comps in the area same sources of labour, rub shoulders, benift as a state, you have to get involved and nurture clusters nurture NRD activity regardless of who ownes them Harper 2006 conservatives more free market less ambitions but this persists why shouldnt we just let the market decide? the government involvement is less direct but the government is still involved as long as you do not protect domestic comps and as long as you are not leading the economy

overall Ottawa still practises some intevention we are closer to the weak model than ever before US supports more on RND support silicon valley high tech spending of the US state in the 1950s and 60s doing less than the US the US is the ultimate free market economy w/o state ownership and tariffs fairly dramatic change 2011 53% of CDN merchandise exposrts are primary 28% such imports food, energy, forestry, mining and minerals exports half are raw any other rich country, the pattern is reversed [may be no autralia] exposrts are resource dependent history of the economy what do we make all of this debate seems to be gone debate; should we have industrial approach the advocates are gone now now there is consensus that the government should do what later libs wants to do foster NRD but not lead the economy not strong state traditions seems to be the best economic policy is this good or bad? can have one way or another Ont and Quebec are hurt by the higher value of the CND $$ high prieces ofr resources why our currency is worth so much is there a policy solution? Cannot do anything

dramatic change in the way we run our economy there is no partisan divide globalization with some government stimulus may be manufacturers will become more effient in the future PLURALISM NOT COLLABORATION during the 1970s libs thought that it would be better to sit down with the business and the labour the model they drew upon countries such as Austria and Sweden and the UK UK labour was tring to make corperatism work winter 1977-1988 got even with the unions by electing thatcher Canada nothing so dramatic unions not as strong Trudeau mandatory wage control labour too weak, organizationally, politically once exception to the rule today union are weaker than 1970s no more bargaining on a corporitst arrangment today business culture is competitive firm centers oppose strong intevention do not belive in working with unions the long and the short of it brief corporatism in the 1970s and 1980s on a small scale in englush Canada

Quebec interesting distinct political ecnomy strong v weak stae pluralism v corporasim important differences in the last 50 years can start out of nowhere The Quite Revolution 1960s dramatic changes ended in 85 went through shocking changes as whole pretty peaceful rise of the separatistm movement political economy Catholic persieved themselves are not praticulary enthenprenurial the lib party used the slogan, which became the slogan of the entire era, the masters of our own home b/f the church or Ottawa ran quebecs economy wanted to become indepenent use the state to run the province 80% French use the state to pursuit our objective was not a bad thing 1. Stronger state expended massively the state intervened to create Franco ecnomic opportunities goal: business which speaks French French as the business lanaague

above this, the bus community was made more francophone hydro quebec 1963 nationalized much of it major developments culture shock for quebec was owned by quebec government workers were French building dams was high tech task and the Quebec people did it themselves Catholics good people, but are not good for business this was unaccepted by the people doubts were dissolved by this used state agencies funding agencies to finance capitalism in quebec would go to quebec owned fims were French speaking Caisse de depots collect the money in the fund, use the fund for investment purposes, invetments thoughout the provin e SGF, other companies, Bombardier, SNC-Lavelin, Videotron, biotech, film, etc central to the quebec economy instigated by loans by the Que government by 1980s mature firms resist more intervention after firms b/c successful they do not want the government to meddle since then, turn to free economy model date, QUEBEC government still spends on research and development

business accets owened by the QUE government 3 or 4 times more than in Ontario move away from strong intervention strong/weak mix NRD in the free market envi more mixed than strong state still diff from English Canada more interventionist compatible with free trade start our own industries, compete with others mixed and far removed from the English canda pluralism v corporatist pluralist from 60s to 80s cooperation with B&L on economic goal ins the 80s anther tool to empower themselves unions became culturall legitamate helped to build their density strikes in 1970s and 1980s QUE government sat down with B&L nationalist society have to become more cooperatiove examples 1996 big summit, B&L ^ deal, had high deficit at the time the government wanted to get rid of it people wanted to cut beniftis in the exhcnage for acceptace, povety reduction plan for the first 5 years, the business would pay for it money would go to povery alliviation after 5 years tax payers would take it over

this would be inconsivible in English Canada there is no big business confederation in English canda Quebec big leaders are household names they are always taklking sometimes agree on things stronger unions strikes cannot have adverasial envi moved into cooperative envi busienss enterprises firm center competitive not corporatist do not have formalized relationships have summits from time to time to sit down and talk they are adhoc procedures b/w pluralism and corporatism episodic summit meeting approach diff from pluralist [fight all the time] PQ more favourable Quebec economy somewhere in betweene they have done this within the CDN federation Canadas Welfare State liberal welfare state reproduction liberal: selectivity, private, small, cheap, higher inequality, poverty middle class will rely more on private inst reading: good early his to the welfare state

origins and history then transformations [less fundomenta] in economy radical transformation less so in the welfare state the welfare state is more robust than purely liberal model social policy BNA [1867] soc programs under the provinces who has the power to implement the welfare state but Ottawa has unlimited spending power the fed can spend money anywhere it wants, even in prov jurisdictions, but cannot regulate it either checks [not regulating] just sending money change the constitution change whos role it is provinces would have to agree to cont amendment 1939 welfare state was purely liberal the only important benefit before WWII was welfare During the depression provinces were on the verge of bankruptcy did not have tax revenues the feds started to fund things using their spending power administation of social accistance only did it b/c it was an emergency only sig b/f WWII workerts comp ^ ensured more the emplyer than the emplyee workers comp after WWI if worker got injured, they would sue

implement this, if you get infured, you can get support to get this, you have to agree not to sue the emplyer modest benefits small, selectivist state during 1930s: depression we need to change had to more form the entire free market to some protection 1940 unemplyment insurance took constitution amendment limited, esp in the beggning regulatory, so had to amend provinces were broke, so they had to agree beyond pure liberal system WWII political climate changes strong uions strong CCF in a war a lot of men signed up the gov is spending $ men would have been unempl during war there is almost no unemployment cannot fire people because there are no where to replace them people started to demand more money political left grew CCF CDN are being killed fighting to not go back to the liberal model

by the end of the war, there was a feeling that there needs to be more intervention rick welfare state - left and labour unions - esping-andersen as the war was ending CCF was ahead of the liberal liberals wanted to do something about this massive social policy changes Kensyan economic method Rapid fire created social benefits Universal familt allowence the mother would get the check regardless of income sent them out base don spending universal pension does not matter what money you saved everyone gets the same amount amendment provicnes made the argument and wanted constitutional amerndment could have done with spending power alone became important in the support of old people 1960s PSE cost-sharing Spending power Post WWII veterans had access to universities Initially sent money directly, now send the money to the province Two stages of the health care 1958 hospital insurance 1968 medical care insurance

federal cost-sharing provinces set up their own systems the fed gives money to the prov and they spend the money universal, everyone gets the same beniftis regardless of the income do not have to pay for it directly Quebec set up their own pension plan

Welfare state
The exam From the section B on From the middle of the first term on The production The size and the proportions of the production pie Changes protectionism is gone the state which is left is wea Quebec is a bit of an exception on the pluralist side of things production liberal, anglo-saxon model welfare state moving away from the liberal model what is the liberal model?

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middle class rely on themselves and the private market place no solidarity with the poor by 1970s universal progrmas public education system health care social insurance generous and redistributive in the welfare, Canada moved some distance away from US toward universaility, away from the liberal model what happened since then

debate how much change did take place after tranformation period how radical was it 1940-1970s solid eco growth 1973 oil crisis [1st one] middle east dominant producers of oil OPEC org dominate the market quadrupeled the price the economy was highly dependent on oil then oil was a base products prices started to jump over night post war success low unemploymnet stagflation low eco growth + rising prices deficits economic policies changed deficits higher spending than taxes did not return to surplus unitl 1996 1980s globalization ideology or reality

globalization economies of the world are becoming more interdependent under pressure to reduce social spendind because we are competing with them true, cannot afford more taxes and more spending might belive its true, still cut spending different set of pressures by late 1980s PC began making changes universal pension 1989 universal OAS pension claw back made the system more selective close to universality smallish departure from universality 1992 universal family allowance ends ended over night replaces it with selective benefit UI expanded to being very generous successive cuts, culminating in 1994/94 renamed it employment insurance in atlanitc Canada still generous in Ontario lower than in many states in the US radical cuts 1995 liberal budget: reduces cost-sharing, culminating in the 1995 budget

to get out of deficit, cut transfer payments transfer payments - health, PSE, social assistance from the fed to the prov, the prov had less money more restrictions Ont government 22% cut in SA benefits and freezes them for 8 years Some prov cut more than others but wend down overall anything positive? Federal child tax benefit 1993 & 1995 selective like SA better structured better impact than SA; spending power SA goes to SW, makes sure she really needs the money Does not have to see anyone files a tax form and if she has a low income, will get money from the fed government set up graduated system lose portions of the credit as related to how much money you earn can work and keep some of the credit works differently selective making a difference [statistics] liberal, but more positive than typical liberal set up the system b/f disincentive to work Universal child care on top of selective credits

the changes might have been not as drastically bad what are the evidence where are we now 1. soical services [SS] 2. income transfers [IT] SS change hard to measure service quality hard to measure still have UHC there are strains each prov range of services on a list delisting of the rang of services in Ont, getting your eyes testes waiting lists can be long have built up in some areas cost pressures across the board almost every prov health care 45% aging society these pressures will keep going up technologies for treatment are expensive PSE remains public tuitions has gone up 3 times today since late 1970s less financial aid even mid income could get grants grants are mostly gone levels of debt increase larger classes

do we need universal child care in Quebec there is there has been buckling but not breaking similar system but they are not drastically different income transfers we can use surveys and be more precise how much $$ is transferred between people how much does it reduce inequality measured of inequality SLID data is better over time good but not definitive the survey is better today than 30 years ago measurements are different people probably under-reported before Social Transfer Payments reduce inequality starting from market incomes taxes too other taxes not so much overall pattern 1. market inequality [before the government] has risen in Canada since 1980s and elsewhere in the world globalization increased outsourcing auto companies might make parts in other parts of the world technological change blue collar jobs on the decline due to tech change machines are more likely to replace blue collar workers

there are many theories to suggest, setting the government impact aside, market income inequality has gone up how to measure inequality the gini coefficient from 0 to 100 0 - every one is equal 1000 - perfect inequality, one has all equal after transfer and tax inequality not no more or less transfers and taxes are doing the same thing as they did before market inequality has gone up the welfare state is reducing that as much today as back in 1980 Market income, SA, UI/EI, Child benefits, income taxes reduce inequality reduce the gini number redistribution is about the same since 1980 market inequality is greater welfare state is it weaker or is it the same, just the market inequality has increased the elderly lowest poverty rate outside Sweden may increase in the future income security is just as strong contrast with the US inequality has risen substantially

half full of half empty if market income is more unequal, the welfare state should be stronger is it possible? No country is doing this today less free market in welfare state more free market in the economy less marketization for welfare state than economy [production] welfare cuts but also increases the system is almost as redistributive why is there this difference internal pressures for welfare state stronger union means government will redistribute more stronger than in the US political parties are parties which favor social policies more then dems in the US federalism, the fed government pay a lot for the services the prov have the ability to make the feds pay politically prevented the system from being reduced more economy people do not care if air Canada or petro Canada is privatized trade deals, WTO, capital flows external free trade acts and agreements ability to promote dom companies is harder less powerful than internal pressures pressures to reduce intervention in the economy

the market has moved into free market direction strong v weak pluralism v corporatism Canadian economy and the state GLOBALIZATION AND LIBERAL DEMOCRACIES to what extend is globalization reducing the role of the government how do capitalist countries differ are free market countries winning over the other ones will globalization undermine variety? Will it lead to the non-liberal models to fade or converge on the liberal model what is economic globalization more trade, FDI, MNC outsourcing and capital flows since the 1970s there have been changes to the whole international environment rich countries and Canada greater trade FDI is nothing new for Canada post Innis our economy is foreign controlled supply chains from different parts of the world MNC outsourcing Broader capital flow central to the fear and the promise might undermine variety

race to the bottom the amount of money which flows is huge, the sums are vaster than the post war era the funds are larger than involved in the first three [trade, FDI, MNC] currency international capital flow is financial side of international trade much of the money has nothing to do with trade, FDI or MNC activity currencies flexible in their values they are relatively stable I might buy money today and sell them tomorrow I might buy stocks in a German company b/c German currency might be stronger than today Post WWII The Bretton Woods system After WWII meetings in BW in New England among big players in the world economy agreed on broad policies to promote growth free trade [GATT] GATT To promote gradual introduction of free trade in the world Thought it was a good idea b/c Depression history Comparative advantage of more trade after the depression, countries closed off their economies people closed off economies this only worsens the situation business and the unions always supported protecting dom industries

comparative advantage if there are 10, each 10 would be better off to specialize and trade export them between each other the outcome specialization, everyone better off and richer freer trade not all they did allowed exchange controls to regulate capital flows exchange controls regulation of capital flows trade is a good thing so we want to open the world free flow of currency would not be a very good thing major reason, everyone knew, at the time, one country had a powerful and secure economy there were only two rich economies which were not bombed during the war people would insets in US and not other states exchange controls were sever a way to try to maintain soundness of other currencies preventing holders of these currencies from exchanging them with american dollars America half of the global economy currency pegs needed against gold-secured US$ regulated and adjustable wanted to prevent them from running into US dollars [exchange control] Pegs

when transaction did take place it would take place at a fixed rate both nations agree on the peg hard for people to just flow the money into other currencies orderly exchange of money peg of .25 to one franc market balance gold standard before the war exchange their currency for gold the ultimate sound measure of value outside US after the war did not want this For a long time $35/US$ for an ounce others pegged to the US dollar and the system was controlled by exchange heavy regulation esp for weak economies free markets but controlled mixture of the two pegs + control = prevent short term currency runs this would allow trade to occur orderly FDI, MNC activity, state-regulated trade grew but under state regulation states had the right to control how much FDI they had the state oversee s the gradual opening up of the economy embedded liberalism [Ruggie] liberalism, in terms of a big welfare state strong growth opening up of trade, economic miracle

this growth was connected with variable economic system the states could chose how to engage with the growth strong v weak, P v C France: planned economic growth, 4 year plans regulatory mechanisms to borrow money determined by the things they needed after the war, like steal Different welfare states domestic interests who lost in these choices had limited exit options French business opposed intervention Swedish businessmen did not like high taxes exit options small for people who do not like those things BW prevented people from exiting the country they were stuck in the country they had to adapt to the circumstances controlled globalization prevention of the losers to exit the state in the long term would be in a bad position both the French state and the Swedish state they had to have strategies which in the long term would make sense in both cases good choices had to be made different kinds of capitalism were possible

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globalization same direction in rich democracies common frame work of economy direction of neo liberal envi in competitive world most viable post war models of economy more market oriented within embedded liberalism there is control of the free trade system contraind to stay in the economy during developmet business money was stuck in that specific currency every currency was pegged to the dollar 1970s and 1980s change in the global economy new envi globalism neo liberalism will win out the money system began to be seen by americans as not working for them Vietnam war public was not happy about the wat the gov did not want to raise taxes, ran debt instead the am gov was stimulating the eco through the deficits US$ because of their debt and trade deficit US$ over valed by the system by early 1970s by holding other currency to high, American dollar was punished american dollar floats and looses value restore competativenes cheaper for Americans to export am firms would be more competitive

did not work forever free floating currency before protected currency floats on the market and the price is determined by the market, prices for currency changes from day to day exchange control are difficult, end esp for affluent western countries Eurodollars offshore, unregulated $$ growth of capital flows central to globalization not trade, not FDI speculative dynamic buy and sell currency or assets short term gains so when markets are unhappy, money runs market panics transformations in the values of the assets implication for the globalization theorists this the argument of the globalizers they think the world has been changed short term logic of capital flows low taxes, lean and mean economy and less distribution because their yield better and quicker results before long term relationship between the bank and the firm, coordinated and long term relationship improvements not fast notion of patient capital is there evidence to support this or is this people only think and because they think this better, they move their money to those states where taxes are bad

then there are those who just do not high taxes, and these people tend to be conservative in their political and economic perspective in the 1970s the French tried to nationalize a bunch of firms as soon as they started this firms began to leave the economy and they reversed position quickly Sweden 1994 well dev welfare states out of recession deficit balance the books by rising taxes and cutting spending immediate run on the Swedish money the government announced reversal of the policy the next day because the markets were unwilling to pay increased taxes the flight of the capital in both cases defeated 2 political initiatives liberal model is favored low tax and spending what can happen in other models, other than the liberal model, the elites may be convinced to change their positions may by they wont dom pressures rigidities factor which undermines performance cannot be easily removed not change but decline as they farther behind lib more efficient

more immigrant societies their populations are growing fasters is it enough to make up for the problem of inequity? ultimately, the questions is of social choice social choice by objective measure, justifies inferior equity do you want to live in a soc where there is more spending or do you want to live in place that societies make choices these choice are constrained by the power structure of the states values reflect the power relationship in the state powerful indicator is union density union indirect effect of their presence changes the power relationship within society affect what model you'll end up with what about Latin states there is nothing good about their political economies 2008 more to do with morgadge conseqeunces showed areas of weaknesses in economies these economies are vulnerable external debt for Greece sense that they lack international markets these states clientists corruption regulation special deals behind the closed doors

getting things from the gov depends on who you know taxes based on corruption why should i have pay those payments 50 to 60 % of jobs are highly secured high youth unemployment out of facism need to build legitemacy for the state clientistic culture will it change form within or from outside special deals for people, enough people, blockages to change bad capitalist models variation on the pattern important to not generalize too much divisions within groups there are variation within groups liberal; US the richest per capita, also has most poverty and inequality cause and effect other factors is there something else about the American economy B and C sections of the syllabus from October 25 on constitutions and on 70% of the course material one question more or less equivalent to one question lecture and then readings