Week 8 of UCalgary MPP 2023-2024 Class

Oct. 16 – Oct. 20, 2023; time is passing quickly and the demands of the program are increasing steadily. While it's still manageable, it's becoming more challenging week by week. Unlike my undergraduate studies, I now have a greater awareness of the high opportunity cost of my time. I have various other interests and priorities that compete for my attention, making it difficult to justify spending an extra 10-15 hours to achieve a perfect score on an assignment, when I can be content with an 85-90%. During my undergraduate studies, such choices were easy to make, and I would often sacrifice exercise and social activities. However, with more life experience, I've come to realize that the opportunity cost of my time is substantial. To achieve long-term success, I need to strike a balance and ensure that I'm making improvements in all aspects of my life, rather than obsessing over achieving the highest grades.

During our PPOL699: Competitive Policy lecture we discussed Market Definition, the focus was on understanding how competition policy defines relevant markets. The lecture began by emphasizing the need for explicit definitions of markets in specific competition cases, using "The Matter of The Coca-Cola Co., 117 F.T.C. 795 (1994)" as an example. The critical question was determining the relevant product markets in this context.

The lecture also delved into the importance of substitutes in market definition, highlighting that substitutes influence price competition, which, in turn, affects market power and profits. Two approaches to antitrust market definition were discussed: the "Direct Approach," which relies on econometric evidence and the "Hypothetical Monopolist Test" or "SSNIP (Small but Significant and Non-transitory Increase in Price) Test" and the "Structural Approach," which considers price correlations among candidate products.

Furthermore, the lecture addressed the Cellophane Fallacy, citing the DuPont case of 1953 as an example. It argued that the existence of substitutes doesn't necessarily indicate the absence of market power; rather, it depends on whether the substitutability persists when the product is priced competitively.

The discussion in PPOL602: Markets and Public Policy lecture was on international free trade and its impact on domestic economies was insightful. Here's a summary of the key points:

International Free Trade and Price Differentials: International trade is influenced by the difference between the world price (PW) and domestic price (PD) of a good/serivce. If PD > PW, the economy becomes an importer, while if PD < PW, it becomes an exporter, assuming there are no trade barriers.

Benefits of International Free Trade: Increased variety for consumers, potential cost reductions for producers through economies of scale, competition that enhances total welfare, knowledge transfer, and gains spread thinly among many but losses concentrated among a few.

Market Failures and Externalities: Market failures occur when outcomes are inefficient. Externalities, either negative (harmful) or positive (beneficial) impacts on bystanders, contribute to market failures.

Internalizing Externalities: Addressing externalities involves adjusting incentives. For negative externalities, where market quantity exceeds the socially desirable level, taxation might be used. For positive externalities, where market quantity falls short of the socially desirable level, subsidies are employed.

During our Tuesday session of PPOL 619: Governance, Institutions, and Public Policy we divided ourselves into groups and completed a case study. We were taking the role of a Deputy Minister (DM) facing a complex decision involving political pressure, ethical considerations, and financial constraints. The scenario is set in the context of a government nearing the end of its mandate, with an impending election that may see the current government defeated. The DM, responsible for the Ministry of Social Services, is confronted by the Minister's directive to provide $7 million in capital funding to a community agency located in the Minister's constituency.

Several key issues and considerations emerge:

  1. Policy Adherence: The Ministry has a long-standing policy against providing capital funding for community agencies. The DM must decide whether to adhere to this policy or make an exception.
  2. Election Dynamics: The impending election adds a political dimension to the decision. The Minister believes that providing the funding will enhance her chances of re-election. The DM must consider the potential consequences of the decision on the election outcome.
  3. Budget Reallocation: Finding the $7 million poses a financial challenge. The DM must decide whether to include it in Supplementary Estimates, subjecting it to scrutiny by opposition parties and the media, or reallocate funds within the approved budget, which could be seen as irregular.
  4. Career Implications: The DM's career prospects are at stake. Acting too politically or too independently could affect their standing with the incoming government. Striking the right balance is essential for their career longevity.
  5. Integrity and Norms: The DM must consider the integrity of the Ministry and the broader norms of the civil service. Making a decision that appears politically motivated could undermine these principles.

In this complex situation, our team placed the utmost importance on upholding the integrity of the Ministry. We collectively agreed that as DM, our foremost duty is to provide impartial public service, characterized by the principles of offering "fearless advice and loyal implementation". These principles serve as the foundation of our commitment to delivering the highest standards of governance.

Consequently, we resolved to provide resolute advice, guided by our dedication to the truth, even if it meant disagreeing with the direction set by the Minister. We understood the potential ramifications for our careers but were steadfast in our commitment to ethical conduct and our responsibility to the institution we serve.

Undoubtedly, this stance presented significant challenges, especially in light of our aspirations for career success and meaningful contributions to our insitiution. It is precisely in these moments that bureaucrats emerge as the unsung heroes of democracy. They grapple daily with intricate decisions that often boil down to personal ethical dilemmas, yet these struggles frequently go unnoticed and uncelebrated by the public.

I got accepted into NSERC's REDEVELOP program, I will discuss this more during the coming weeks' reflections :)

*Photo: Cavell Pond in Jasper National Park, AB taken Aug 29/20.

Summit photo