The Decay of American Political Institutions

Curated on Posted on by Stefaan Verhulst

in the American Interest: “Many political institutions in the United States are decaying. This is not the same thing as the broader phenomenon of societal or civilization decline, which has become a highly politicized topic in the discourse about America. Political decay in this instance simply means that a specific political process—sometimes an individual government agency—has become dysfunctional. This is the result of intellectual rigidity and the growing power of entrenched political actors that prevent reform and rebalancing. This doesn’t mean that America is set on a permanent course of decline, or that its power relative to other countries will necessarily diminish. Institutional reform is, however, an extremely difficult thing to bring about, and there is no guarantee that it can be accomplished without a major disruption of the political order. So while decay is not the same as decline, neither are the two discussions unrelated.
There are many diagnoses of America’s current woes. In my view, there is no single “silver bullet” cause of institutional decay, or of the more expansive notion of decline. In general, however, the historical context of American political development is all too often given short shrift in much analysis. If we look more closely at American history as compared to that of other liberal democracies, we notice three key structural characteristics of American political culture that, however they developed and however effective they have been in the past, have become problematic in the present.
The first is that, relative to other liberal democracies, the judiciary and the legislature (including the roles played by the two major political parties) continue to play outsized roles in American government at the expense of Executive Branch bureaucracies. Americans’ traditional distrust of government thus leads to judicial solutions for administrative problems. Over time this has become a very expensive and inefficient way to manage administrative requirements.
The second is that the accretion of interest group and lobbying influences has distorted democratic processes and eroded the ability of the government to operate effectively. What biologists label kin selection and reciprocal altruism (the favoring of family and friends with whom one has exchanged favors) are the two natural modes of human sociability. It is to these types of relationships that people revert when modern, impersonal government breaks down.
The third is that under conditions of ideological polarization in a federal governance structure, the American system of checks and balances, originally designed to prevent the emergence of too strong an executive authority, has become a vetocracy. The decision system has become too porous—too democratic—for its own good, giving too many actors the means to stifle adjustments in public policy. We need stronger mechanisms to force collective decisions but, because of the judicialization of government and the outsized role of interest groups, we are unlikely to acquire such mechanisms short of a systemic crisis. In that sense these three structural characteristics have become intertwined….
In short, the problems of American government flow from a structural imbalance between the strength and competence of the state, on the one hand, and the institutions that were originally designed to constrain the state, on the other. There is too much law and too much “democracy”, in the form of legislative intervention, relative to American state capacity. Some history can make this assertion clearer….
In well-functioning governance systems, moreover, a great deal of deliberation occurs not just in legislatures but within bureaucracies. This is not a matter of bureaucrats simply talking to one another, but rather a complex series of consultations between government officials and businesses, outside implementers and service providers, civil society groups, the media and other sources of information about societal interests and opinions. The Congress wisely mandated consultation in the landmark 1946 Administrative Procedures Act, which requires regulatory agencies to publicly post proposed rule changes and to solicit comment about them. But these consultative procedures have become highly routinized and pro forma, with actual decisions being the outcome not of genuine deliberation, but of political confrontations between well organized interest groups….”

Give People Choices, Not Edicts

Curated on Posted on by Stefaan Verhulst

Peter Orszag and Cass Sunstein in Bloomberg: “Over the past few years, many nations have adopted policies that promise to improve people’s lives while preserving their freedom of choice. These approaches, informed by behavioral economics, are sometimes called nudges.
Nudges include disclosure policies, as in the idea that borrowers should “know before they owe.” They include simplification, as in recent reductions in the paperwork requirements for the Free Application for Federal Student Aid.
Nudges include default rules, which establish what happens if people do nothing at all — as with automatic enrollment in a savings plan. They also include reminders, such as text messages informing people they are about to go over their monthly allowance of mobile-phone minutes.
When the two of us worked in the Obama administration, we were interested in approaches of this kind, because the evidence suggests they work. For example, the Credit Card Accountability Responsibility and Disclosure Act of 2009 imposes numerous disclosure requirements, which are helping to save consumers more than $20 billion in annual late fees and overuse charges.
In the U.S. and other nations, automatic enrollment has significantly increased participation in savings plans. A recent study found that in Denmark, automatic enrollment has had a larger impact than significant tax incentives in getting people to save. The study found that 99 percent of the retirement contributions made in response to tax incentives would have been saved anyway; by contrast, the bulk of the contributions made by people who were automatically enrolled in a retirement plan represented a net addition to saving.
Big Benefits
In an economically challenging time, the nudge approach can deliver major benefits without imposing big costs on the public or private sector. And, like a GPS, nudges still have the virtue of allowing people to go their own way. If informed consumers want to run a risk, they can do that. A nudge isn’t a shove. Yet this approach to government has stirred up objections from both the right and the left.
What makes it legitimate for public officials to nudge people they are supposed to serve? Whenever government acts, isn’t there a risk of error, bias and overreaching?
These are good questions, and some nudges should be avoided. But the whole point of the approach is to preserve freedom of choice, and being nudged is part of the human condition. Both private and public institutions are inevitably engaged in nudging, simply because they design the background against which people make choices, and no choice is ever made without a background.
Whenever the government is designing applications and forms, its choices affect people’s decisions. Complexity produces different results from simplicity. Many laws require disclosure from the government or the private sector, and this can occur in different ways. The architecture of disclosure (including which items are placed first, font size, color, readability) is likely to influence what people select.
Life would be impossible to navigate without default rules. Computers, mobile phones, health-care plans and mortgages come with defaults, which you can change if you wish. An employer might say that you must opt in to be enrolled in a savings plan, or alternatively that you must opt out if you don’t want to participate. In either case, a default rule is involved.
Some skeptics (especially on the left) object that nudges may be ineffective or even counterproductive. In their view, coercion is often both necessary and justified. The objections are most pointed, as New York University School of Law professors Ryan Bubb and Richard Pildes argue in a forthcoming article in the Harvard Law Review, when nudges are seen as affirmatively harmful.
Automatic Enrollment
An example involves automatic enrollment in savings plans, which both of us have supported. Critics point out that if employers choose a low contribution rate, automatic enrollment can decrease employees’ total savings — a perverse effect. That observation, however, is a reason for smarter nudging, not for coercion, and is thus not a persuasive critique of nudges in general. One smarter approach in this area is “automatic escalation,” a complement to automatic enrollment.
With automatic escalation, as time goes on and people earn more money, a higher share of their wages goes into savings — unless they opt out. The objection that nudges reduce retirement savings collapses.
And guess what? A survey from Towers Watson & Co. found that in 2012, 71 percent of plans with automatic enrollment included escalation. In 2009, 50 percent did. So much for the critique that contributions in these plans are fixed at their initial levels.
To be sure, coercion might turn out to be justified when the benefits clearly outweigh the costs. But behaviorally informed approaches, which maintain freedom of choice, have growing appeal. As we continue to learn what works, we will identify numerous ways to improve people’s lives while avoiding the costs and the rigidity of more heavy-handed alternatives”

Index: Measuring Impact with Evidence

Curated on Posted on by Shruti Sannon

The Living Library Index – inspired by the Harper’s Index – provides important statistics and highlights global trends in governance innovation. This installment focuses on measuring impact with evidence and was originally published in 2013.

United States

  • Amount per $100 of government spending that is backed by evidence that the money is being spent wisely: less than $1
  • Number of healthcare treatments delivered in the U.S. that lack evidence of effectiveness: more than half
  • How much of total U.S. healthcare expenditure is spent to determine what works: less than 0.1 percent
  • Number of major U.S. federal social programs evaluated since 1990 using randomized experiments and found to have “weak or no positive effects”: 9 out of 10
  • Year the Coalition for Evidence-Based Policy was set up to work with federal policymakers to advance evidence-based reforms in major U.S. social programs: 2001
  • Year the Program Assessment Rating Tool (PART) was introduced by President Bush’s Office of Management and Budget (OMB): 2002
    • Out of about 1,000 programs assessed, number found to be effective in 2008: 19%
    • Percentage of programs that could not be assessed due to insufficient data: 17%
    • Amount spent on the Even Start Family Literacy Program, rated ineffective by PART, over the life of the Bush administration: more than $1 billion
  •  Year Washington State legislature began using Washington State Institute for Public Policy’s estimates on how “a portfolio of evidence-based and economically sound programs . . . could affect the state’s crime rate, the need to build more prisons, and total criminal-justice spending”: 2007
    • Amount invested by legislature in these programs: $48 million
    • Amount saved by the legislature: $250 million
  • Number of U.S. States in a pilot group working to adapt The Pew-MacArthur Results First Initiative, based on the Washington State model, to make performance-based policy decisions: 14
  • Net savings in health care expenditure by using the Transitional Care Model, which meets the Congressionally-based Top Tier Evidence Standard: $4,000 per patient
  • Number of states that conducted “at least some studies that evaluated multiple program or policy options for making smarter investments of public dollars” between 2008-2011: 29
  • Number of states that reported that their cost-benefit analysis influenced policy decisions or debate: 36
  • Date the Office of Management and Budget issued a memorandum proposing new evaluations and advising agencies to include details on determining effectiveness of their programs, link disbursement to evidence, and support evidence-based initiatives: 2007
  • Percentage increase in resources for innovation funds that use a tiered model for evidence, according to the President’s FY14 budget: 44% increase
  • Amount President Obama proposed in his FY 2013 budget to allocate in existing funding to Performance Partnerships “in which states and localities would be given the flexibility to propose better ways to combine federal resources in exchange for greater accountability for results”:  $200 million
  • Amount of U.S. federal program funding that Harvard economist Jeffrey Liebman suggests be directed towards evaluations of outcomes: 1%
  • Amount of funding the City of New York has committed for evidence-based research and development initiatives through its Center for Economic Opportunity: $100 million a year

Internationally

  • How many of the 30 OECD countries in 2005-6 have a formal requirement by law that the benefits of regulation justify the costs: half
    • Number of 30 OECD member countries in 2008 that reported quantifying benefits to regulations: 16
    • Those who reported quantifying costs: 24
  • How many members make up the Alliance for Useful Evidence, a network that “champion[s]  evidence, the opening up of government data for interrogation and use, alongside the sophistication in research methods and their applications”: over 1,000
  • Date the UK government, the ESRC and the Big Lottery Fund announced plans to create a network of ‘What Works’ evidence centres: March 2013
  • Core funding for the What Works Centre for Local Economic Growth: £1m p.a. over an initial three year term
  • How many SOLACE Summit members in 2012 were “very satisfied” with how Research and Intelligence resources support evidence-based decision-making: 4%
    • Number of areas they identified for improving evidence-based decision-making: 5
    • Evaluation of the impact of past decisions: 46% of respondents
    • Benchmarking data with other areas: 39%
    • assessment of options available: 33% 
    • how evidence is presented: 29% 
    • Feedback on public engagement and consultation: 25%
  •  Number of areas for improvement for Research and Intelligence staff development identified at the SOLACE Summit: 6
    • Strengthening customer insight and data analysis: 49%
    • Impact evaluation: 48%
    • Strategic/corporate thinking/awareness: 48%
    • Political acumen: 46%
    • Raising profile/reputation of the council for evidence-based decisions: 37%
    • Guidance/mentoring on use of research for other officers: 25%

Sources

Selected Readings on Smart Disclosure

Curated on Posted on by Andrew Young

The Living Library’s Selected Readings series seeks to build a knowledge base on innovative approaches for improving the effectiveness and legitimacy of governance. This curated and annotated collection of recommended works on the topic of smart disclosure was originally published in 2013.

While much attention is paid to open data, data transparency need not be managed by a simple On/Off switch: It’s often desirable to make specific data available to the public or individuals in targeted ways. A prime example is the use of government data in Smart Disclosure, which provides consumers with data they need to make difficult marketplace choices in health care, financial services, and other important areas. Governments collect two kinds of data that can be used for Smart Disclosure: First, governments collect information on services of high interest to consumers, and are increasingly releasing this kind of data to the public. In the United States, for example, the Department of Health and Human Services collects and releases online data on health insurance options, while the Department of Education helps consumers understand the true cost (after financial aid) of different colleges. Second, state, local, or national governments hold information on consumers themselves that can be useful to them. In the U.S., for example, the Blue Button program was launched to help veterans easily access their own medical records.

Selected Reading List (in alphabetical order)

Annotated Selected Reading List (in alphabetical order)

Better Choices: Better Deals Report on Progress in the Consumer Empowerment Strategy. Progress Report. Consumer Empowerment Strategy. United Kingdom: Department for Business Innovation & Skills, December 2012. http://bit.ly/17MqnL3.

  • The report details the progress made through the United Kingdom’s consumer empowerment strategy, Better Choices: Better Deals. The plan seeks to mitigate knowledge imbalances through information disclosure programs and targeted nudges.
  • The empowerment strategy’s four sections demonstrate the potential benefits of Smart Disclosure: 1. The power of information; 2. The power of the crowd; 3. Helping the vulnerable; and 4. A new approach to Government working with business.
Braunstein, Mark L.,. “Empowering the Patient.” In Health Informatics in the Cloud, 67–79. Springer Briefs in Computer Science. Springer New York Heidelberg Dordrecht London, 2013. https://bit.ly/2UB4jTU.
  • This book discusses the application of computing to healthcare delivery, public health and community based clinical research.
  • Braunstein asks and seeks to answer critical questions such as: Who should make the case for smart disclosure when the needs of consumers are not being met? What role do non-profits play in the conversation on smart disclosure especially when existing systems (or lack thereof) of information provision do not work or are unsafe?

Brodi, Elisa. “Product-Attribute Information” and “Product-Use Information”: Smart Disclosure and New Policy Implications for Consumers’ Protection. SSRN Scholarly Paper. Rochester, NY: Social Science Research Network, September 4, 2012. http://bit.ly/17hssEK.

  • This paper from the Research Area of the Bank of Italy’s Law and Economics Department “surveys the literature on product use information and analyzes whether and to what extent Italian regulator is trying to ensure consumers’ awareness as to their use pattern.” Rather than focusing on the type of information governments can release to citizens, Brodi proposes that governments require private companies to provide valuable use pattern information to citizens to inform decision-making.
  • The form of regulation proposed by Brodi and other proponents “is based on a basic concept: consumers can be protected if companies are forced to disclose data on the customers’ consumption history through electronic files.”
National Science and Technology Council. Smart Disclosure and Consumer Decision Making: Report of the Task Force on Smart Disclosure. Task Force on Smart Disclosure: Information and Efficiency in Consumer Markets. Washington, DC: United States Government: Executive Office of the President, May 30, 2013. http://1.usa.gov/1aamyoT.
    • This inter-agency report is a comprehensive description of smart disclosure approaches being used across the Federal Government. The report not only highlights the importance of making data available to consumers but also to innovators to build better options for consumers.
  • In addition to providing context about government policies that guide smart disclosure initiatives, the report raises questions about what parties have influence in this space.

“Policies in Practice: The Download Capability.” Markle Connecting for Health Work Group on Consumer Engagement, August 2010. http://bit.ly/HhMJyc.

  • This report from the Markle Connecting for Health Work Group on Consumer Engagement — the creator of the Blue Button system for downloading personal health records — features a “set of privacy and security practices to help people download their electronic health records.”
  • To help make health information easily accessible for all citizens, the report lists a number of important steps:
    • Make the download capability a common practice
    • Implement sound policies and practices to protect individuals and their information
    • Collaborate on sample data sets
    • Support the download capability as part of Meaningful Use and qualified or certified health IT
    • Include the download capability in procurement requirements.
  • The report also describes the rationale for the development of the Blue Button — perhaps the best known example of Smart Disclosure currently in existence — and the targeted release of health information in general:
    • Individual access to information is rooted in fair information principles and law
    • Patients need and want the information
    • The download capability would encourage innovation
    • A download capability frees data sources from having to make many decisions about the user interface
    • A download capability would hasten the path to standards and interoperability.
Sayogo, Djoko Sigit, and Theresa A. Pardo. “Understanding Smart Data Disclosure Policy Success: The Case of Green Button.” In Proceedings of the 14th Annual International Conference on Digital Government Research, 72–81. New York: ACM New York, NY, USA, 2013. http://bit.ly/1aanf1A.
  • This paper from the Proceedings of the 14th Annual International Conference on Digital Government Research explores the implementation of the Green Button Initiative, analyzing qualitative data from interviews with experts involved in Green Button development and implementation.
  • Moving beyond the specifics of the Green Button initiative, the authors raise questions on the motivations and success factors facilitating successful collaboration between public and private organizations to support smart disclosure policy.

Thaler, Richard H., and Will Tucker. “Smarter Information, Smarter Consumers.” Harvard Business Review January – February 2013. The Big Idea. http://bit.ly/18gimxw.

  • In this article, Thaler and Tucker make three key observations regarding the challenges related to smart disclosure:
    • “We are constantly confronted with information that is highly important but extremely hard to navigate or understand.”
    • “Repeated attempts to improve disclosure, including efforts to translate complex contracts into “plain English,” have met with only modest success.”
    • “There is a fundamental difficulty of explaining anything complex in simple terms. Most people find it difficult to write instructions explaining how to tie a pair of shoelaces.

E-Government and Its Limitations: Assessing the True Demand Curve for Citizen Public Participation

Curated on Posted on by Stefaan Verhulst

Paper by David Karpf: “Many e-government initiatives start with promise, but end up either as digital “ghost towns” or as a venue exploited by organized interests. The problem with these initiatives is rooted in a set of common misunderstandings about the structure of citizen interest in public participation – simply put, the Internet does not create public interest, it $2 public interest. Public interest can be high or low, and governmental initiatives can be polarized or non-polarized. The paper discusses two common pitfalls (“the Field of Dreams Fallacy” and “Blessed are the Organized”) that demand alternate design choices and modified expectations. By treating public interest and public polarization as variables, the paper develops a typology of appropriate e-government initiatives that can help identify the boundary conditions for transformative digital engagement.”

The value and challenges of public sector information

Curated on Posted on by Stefaan Verhulst

A paper by M. Henninger in Cosmopolitan Civil Societies: An Interdisciplinary Journal: “The aim of this paper is to explore the concept of public sector information (PSI), what it is, its history and evolution, what constitutes its corpus of documents and the issues and challenges it presents to society, its institutions and to those who use and manage it. The paper, by examining the literatures of the law, political science, civil society, economics and information and library science explores the inherent tensions of access to and use of PSI—pragmatism vs. idealism; openness vs. secrecy; commerce vs. altruism; property vs. commons; public good vs. private good. It focusses on open government data (OGD)—a subset of what is popularly referred to as ‘big data’—its background and development since much of the current debate of its use concerns its commercial value for both the private sector and the public sector itself. In particular it looks at the information itself which, driven by technologies of networks, data mining and visualisation gives value in industrial and economic terms, and in its ability to enable new ideas and knowledge.”

Cinq expériences de démocratie 2.0

Curated on Posted on by Stefaan Verhulst

Le Monde: “Du 23 au 27 novembre, à Strasbourg, les participants au Forum mondial pour la démocratie examineront des initiatives de démocratie participative à l’oeuvre sur tous les continents. En voici quelques exemples. ( Lire aussi l’entretien : “Internet renforce le pouvoir de la société civile”)

  • EN FRANCE, LES ÉLECTEURS PASSENT À L’ÈRE NUMÉRIQUE

Depuis trois ans, les initiatives françaises de démocratie 2.0 se multiplient, avec pour objectif de stimuler la participation citoyenne aux instances démocratiques, qu’elles soient locales ou nationales. Dans la perspective des élections municipales de mars 2014, Questionnezvoselus.org propose ainsi aux internautes d’interroger les candidats à la mairie des 39 villes de France métropolitaine de plus de 100 000 habitants. Objectif ? Etablir la confiance entre les citoyens et leurs élus grâce à davantage de transparence, d’autonomisation et de responsabilité. La démarche rappelle celle de Voxe.org : lors de l’élection présidentielle de 2012, ce comparateur neutre et indépendant des programmes des candidats a enregistré un million de connexions. En complément, Laboxdesmunicipales.com propose des outils d’aide au vote, tandis que Candidat-et-citoyens.fr offre à ceux qui se présentent la possibilité d’associer des citoyens à la construction de leur programme.
Aux adeptes de la transparence, le collectif Democratieouverte.org propose d’interpeller les élus afin qu’ils affichent ouvertement leurs pratiques, et Regardscitoyens.org offre « un accès simplifié au fonctionnement de nos institutions démocratiques à partir des informations publiques »….

Informer, débattre et donner le pouvoir d’agir », tel est le slogan de Puzzled by Policy (PBP, « perplexe quant à la politique »), une plate-forme Internet lancée en octobre 2010 afin d’aider chacun à mieux comprendre les décisions politiques prises au niveau européen et à améliorer ainsi la qualité du débat public….

  • A PORTO ALEGRE,  UN WIKI RELIE HABITANTS ET ÉDILES

Cartographier le territoire et identifier les problèmes que rencontrent les habitants de la ville en utilisant un système « wiki » (c’est-à-dire un site Internet qui s’enrichit des contributions des internautes), telle est la vocation de Porto Alegre.cc.
Conçu pour donner de la visibilité aux causes défendues par les habitants, ce site s’inscrit dans le cadre de la plate-forme « wikicity » (Wikicidade.cc). Un concept dondé sur la méthode de l’intelligence collective, qui s’articule autour de quatre axes : culture de la citoyenneté, éthique de l’attention, responsabilité partagée et engagement civique….

  • EN FINLANDE,  CHACUN LÉGIFÈRE EN LIGNE

Depuis mars 2012, la Constitution finlandaise laisse à tout citoyen ayant atteint la majorité la possibilité d’inscrire des propositions de loi sur l’agenda parlementaire. Ces dernières sont examinées par les élus à condition de recevoir le soutien de 50 000 autres Finlandais (soit 1 % de la population).
Afin d’optimiser l’usage et l’impact de ce dispositif de participation citoyenne, l’ONG Open Ministry a lancé en octobre 2012 une plate-forme facilitant l’implication de tout un chacun. Participation en ligne, ateliers de travail ouverts ou tables rondes sont autant de techniques utilisées à cette fin….

  • AUX ETATS-UNIS, LA FINANCE PARTICIPATIVE GAGNE LES PROJETS PUBLICS

Citizinvestor.com propose aux citoyens américains de participer au financement d’infrastructures publiques. « L’administration n’a jamais assez d’argent pour financer tous les projets et services dont rêvent les citoyens », observent Tony De Sisto et Jordan Tyler Raynor, les cofondateurs du projet, conscients des choix difficiles opérés lors de l’allocation des budgets municipaux et de l’envie des habitants d’avoir leur voix dans ce choix….”

Selected Readings on Crowdsourcing Funds

Curated on Posted on by Andrew Young

The Living Library’s Selected Readings series seeks to build a knowledge base on innovative approaches for improving the effectiveness and legitimacy of governance. This curated and annotated collection of recommended works on the topic of crowdsourcing was originally published in 2013.

Crowdsourcing funds, or crowdfunding, is an emerging method for raising money that allows a wide pool of people to make small investments, gain access to ideas and projects they feel personally connected to, and spur growth in small businesses and social ventures. Popular crowdfunding platforms like Kickstarter and Indiegogo helped bring the practice into the public consciousness. Now, civic crowdfunding platforms like Citizinvestor and Spacehive are helping to apply this innovative funding model already in use for helping to fund artists, charities and inventors to help address public concerns traditionally considered under government’s purview.

Crowdfunding has also received recent attention from policymakers in the US through the US Securities JOBS Act, which provides an exemption from the registration requirements for offerings of securities by a company made through an SEC registered Crowdfunding Platform.

Selected Reading List (in alphabetical order)

Annotated Selected Reading List (in alphabetical order)

Aitamurto, Tanja. “The Impact of Crowdfunding on Journalism.” Journalism Practice 5, no. 4 (2011): 429–445. http://bit.ly/1bk4wNI.

  • This article analyzes the impact of crowdfunding on journalism, where, “readers’ donations accumulate into judgments about the issues that need to be covered.”
  • Aitamurto’s central findings inspire optimism regarding the potential of crowdfunding for the public good. She finds that, “From the donor’s perspective, donating does not create a strong relationship from donor to journalist or to the story to which they contributed;” rather, “[t]he primary motivation for donating is to contribute to the common good and social change.”

Baeck, Peter and Liam Collins. Working the Crowd: A Short Guide to Crowdfunding and How It Can Work for You. Nesta, May 2013. http://bit.ly/Hkl3rx.

  • This report “aims to give a quick overview of crowdfunding, the different versions of the model and how they work.”
  •  The authors list four technological innovations that have contributed to the growth of modern crowdfunding:
    • An online place for pitches
    • Moving your money with a click
    • The social engine
    • Fueling campaigns with algorithms
  • Baeck and Collins consider public and social projects to be one of the areas where crowdfunding can have a significant impact. They argue that civic crowdfunding “has the potential to disrupt how money for charitable causes is sourced and how public services and spaces are used and paid for.”

Best, Jason, Sherwood Neiss and Davis Jones. “How Crowdfund Investing Helps Solve Three Pressing Socioeconomic Challenges.” Crowdfunding PR, Social Media & Marketing Campaigns. http://bit.ly/1aaTGwQ.

  • This paper outlines the forces driving the widespread use of crowdfund investing, namely social media, the existence of funding systems that marginalize people outside of major urban centers and the ability of people to function remotely from their work spaces.
  • The authors also discuss a number of public-facing benefits of crowdfund investing:
    • Crowdfund Investing Creates Jobs
    • Bringing capital in off the sidelines for use by small businesses
    • Funding entrepreneurs everywhere
    • Capital no longer for the chosen few
    • Crowdfund Investing Grows GDP
    • Reduction in the failure rate of small businesses
    • Crowd monitoring reduces agency costs

De Buysere, Kristof, Oliver Gajda, Ronald Kleverlaan, Dan Marom, and Matthias Klaes. A Framework for European Crowdfunding, 2012. http://bit.ly/1aaTFsE.

  • This paper seeks to provide a “concise overview of the state of crowdfunding in Europe, with the aim of establishing policy and a distinct framework for the European crowdfunding industry,” which the authors believe, “will aid in the economic recovery of Europe.”
  • The authors, in their advocacy for greater crowdfunding opportunities for businesses in Europe, provide a rationale for the practice that also helps demonstrate the potential benefits of greater crowdfunding opportunities within government. They argue that, “Crowdfunding can offer unique support for budding and existing entrepreneurs on multiple levels. No other investment form, be it debt or equity, can provide the benefits of pre-sales, market research, word-of-mouth promotion, and crowd wisdom without additional cost.”

Hollow, Matthew. “Crowdfunding and Civic Society in Europe: A Profitable Partnership?” Open Citizenship 4, no. 1 (May 20, 2013). http://bit.ly/1cgzefL.

  • In this paper, Hollow explores the rise of crowdfunding platforms (CFPs), particularly related to civil society. He notes that, “[f]or civil society activists and others concerned with local welfare issues, the emergence of these new CFPs has been hugely significant: It has opened up a new source of funding when governments and businesses around the world are cutting back on their spending.”
  • Hollow argues that, “aside from their evident financial and economic benefits, CFPs also have the capacity to help foster and strengthen non-parliamentary democratic structures and practices. As such, they should be supported and encouraged as part of a framework of further European democratization and civic integration.”

Mollick, Ethan R. “The Dynamics of Crowdfunding: An Exploratory Study.” Journal of Business Venturing (June 26, 2013). http://bit.ly/1aaTJIV.

  • This paper “offers a description of the underlying dynamics of success and failure among crowdfunded ventures,” focusing on how personal networks and the project quality and viability have an impact on the success of crowdfunding efforts.
  • Mollick also highlights how other factors, like the geography of the project, design choices made by crowdfunding sites and developments in technology in this space all have an influence on the relationship between backers and project founders.
  • The paper finally demonstrates that projects that succeed do so by a small margin and those that fail seemingly by a large margin suggesting the influence of social bias and crowd influence.

Stemler, Abbey R. “The JOBS Act and Crowdfunding: Harnessing the Power—and Money—of the Masses.” Business Horizons 56, no. 3 (May 2013): 271–275. http://bit.ly/1ih9lts.

  • This paper discusses the Jumpstart Our Business Startups (JOBS) Act signed into law by President Obama in 2012, with a specific focus on the CROWDFUND Act, which enables entrepreneurs and small business owners to sell limited equity in their companies to a “crowd” of investors.
  • The objective of the Act is to exempt crowdfunding from registration requirement costs, allowing the potential of equity-based funding to be realized, by creating a pathway for underfunded entrepreneurs to access otherwise inaccessible streams of funding.
  • Stemler argues that the Act helps to legitimize crowdfunding as a community-building and fundraising tool for the business community, and also helps build better relationships between small business owners and government.

The Law of 'Not Now'

Curated on Posted on by Stefaan Verhulst

Paper by Cass Sunstein and Adrian Vermeule: “Administrative agencies frequently say “not now.” They defer decisions about rulemaking or adjudication, or decide not to decide. When is it lawful for them to do so? A substantial degree of agency autonomy is guaranteed by a recognition of resource constraints, which require agencies to set priorities, often with reference to their independent assessments of the relative importance of legislative policies. Unless a fair reading of congressional instructions suggests otherwise, agencies may also defer decisions because of their own policy judgments about appropriate timing. At the same time, agencies may not defer decisions, or decide not to decide, if Congress has imposed a statutory deadline, or if their failure to act amounts to a circumvention of express or implied statutory requirements, or amounts to an abdication of the agency’s basic responsibility to promote and enforce policies established by Congress.”