Addiction harms individuals and the rest of society. It poses a challenge to conventional CBA because it involves sovereign consumers apparently making mistakes. Although the neoclassical approach to addiction, the rational addiction model, does not adequately explain harmful addiction, it introduces the useful notion that the utility of current consumption can depend on the stock of prior consumption. Behavioral economics offers a number of explanations for addiction: non-exponential time discounting, presentism, cue-dependent consumption choices and costly self-control in the face of temptation. The latter provides some normative leverage: addictive consumption involves a loss of individual welfare when the individual would be willing to pay to avoid facing the tempting choice. Practical CBA can assess the welfare loss from addictive consumption if a marginal valuation schedule for non-addicted consumption can be distinguished from the market demand schedule. Unfortunately, it is currently unclear how to identify the non-addicted demand schedule from revealed preference data. Further, the task is complicated because consumption of most goods commonly classified as addictive involve both addictive and non-addictive consumption.
Aidan R. Vining and David L. Weimer
Aidan R. Vining and David L. Weimer
Hybrid organisations, which must accommodate the interests of multiple principals if they are to survive, take many forms. Intra-sector hybrids, either with only public sector principals, such as the Port Authority of New York and New Jersey, or with only private sector principals, such as social enterprises that seek to promote both social purpose and profitability, typically face tensions between goals that complicate the tasks of managers, sometimes resulting in the dominance of the goal of one, or one kind of, principal to resolve the tension. The potential for goal tension is more acute in cross-sector hybrid organisations that have both public and private principals (public?private hybrids) especially when the private principal seeks to maximise profit and profit maximisation is not the primary public purpose of the hybrid. Based on the fractionalised property rights (FPR) framework we describe below, we argue that the extent to which the potential for dysfunctional conflict materialises depends on the specific characteristics of the property rights that define the claims and duties of the organisation’s principals and managers (Vining and Weimer, 2016). Further, we present a diagnostic FPR framework based on what we consider to be the six most important dimensions of organisational property rights. The unpacking of the FPR framework helps to explain why certain kinds of public?private hybrids are more or less prone to dysfunction, and consequently the framework may assist organisational designers in reducing the chances of dysfunction within a category of hybrids. If public?private hybrids are particularly vulnerable to goal tensions, why have they become so common? There are several reasons why public?private hybrids are especially attractive to legislative and bureaucratic organisational designers. From a normative perspective, public?private hybrids offer the pleasant prospect of marrying public purposes to private sector efficiency and strategic flexibility (Eckel and Vining, 1985; Pargendler et al., 2013). They also offer political benefits. By employing the private sector, legislative and executive actors can obscure responsibility for performance outcomes, while implying that they are dragging reluctant bureaucrats towards more ‘business-like’ behaviour. This message is attractive to right-of-centre politicians who are critical of the Leviathan, but who still wish to provide services to voters.