Journal Files A.A.S

Elements of the SSP Paradigm

1. Transaction as the unit of analysis. What are the interest groups that are transacting?

2. Be clear on the physical good being analyzed.

e.g. not just education. but classrooms, educated person, or world of English speakers.

3. How to group problems? (What are the chapter titles of your book?)

810 uses the character of goods/sources of interdependence.

Alternatives: Character of people, type of policy, commodities.

4. Situation-- inherent (a matter of physics and biology)

This is important because if interdependence is caused by structure, then a different performance can be achieved just by removing the structure.

Structure--chosen, human artifact, instrumental.

Performance-- substantive (includes conduct or intermediate behavior).

5. Key proposition: You can't design policy to direct interdependence if you don't know where it is coming from. (And, following from behavioral economics, you can't design policy if you don't understand human cognition of the situation and structure.)

6. Theory should--

a. Suggest variables and relationships between them.

b. Suggest auxiliary variables needed to test the above relationships;

e.g. while focus is on situation, what do I need to know about people such as size of groups and cognition or about the good's production function.

c. If you know the situation, theory should tell us where to look for relevant structures.

e.g. with IUG, the theory tells us to look at factor ownership and competition, but elsewhere for HEC.

d. Also, if you know the situation, theory should tells us what performance dimensions are particularly relevant,

e.g. if good is HEC, the theory suggests that performance indicators might include what happens to free riders, frustrated riders and unwilling riders.

e. Help to form hypotheses of how a given structure produces different performances when combined with different situations.

f. Help form hypotheses of how a given situation interacts with different alternative structures.

g. Or, start with the situation of a given good and your client's desired performance, and suggest what structures will produce that performance. If one policy structure is unavailable, the analyst can earn big bucks if a substitute can be found.

h. Or, given the situation, predict the structure that you expect to find in the world.

i. It need not or cannot tell you what is better to do.


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