CHAPTER

2
Principles for Analyzing
Government
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe

The Market Economy

Process

of voluntary exchange
Specialization
Gains from trade

Proses pertukaran sukarela

Spesialisasi
Manfaat perdagangan

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Economic Efficiency and the

Competitive Market

Demand Curve value of output produced

Supply Curve opportunity cost of producing output
Intersection of supply and demand curves determine level of
output maximizing value of economys resources
Kurva permintaan nilai output yang diproduksikan
Kurva penawaran biaya pengorbanan dari produksi output
Persinggungan kurva penawaran dan permintaan menunjukkan
tingkat output yang memaksimumkan nilai dari sumber daya
ekonomi

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

Randall Holcombe

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Economic Efficiency and the

Competitive Market

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Efisiensi perekonomian dan pasar

persaingan

Kurva permintaan, D, menggambarkan nilai output yang dihasilkan

di pasar, menurut output konsumen, karena kurva tersebut
menunjukkan berapa besar kemampuan/ kesediaan konsumen
untuk membayar output
Kurva penawaran, S, biaya yang harus dikorbankan karena
memproduksi output, karena kurva tersebut menunjukkan berapa
besar produsen harus membayar agar dapat memproduksi output
Tingkat output yang memaksimumkan nilai output dalam
perekonomian adalah Q*. Jika produksi kurang dari Q* maka nilai
output untuk konsumen lebih besar dari pada biaya yang
dikorbankan oleh produsen.

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

Randall Holcombe

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Role of Government
Private

Sector voluntary exchanges

Public Sector government activity

typically financed by mandatory taxes

monopoly on legitimate coercion and force

Sektor swasta pertukaran sukarela

Sektor publik kegiatan pemerintah
- Biasanya dibiayai oleh pajak wajib
- Monopoli atau pemaksaan yang sah dan berlaku
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
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Why is the Public Sector

Necessary?
Failure

of market system
Government may be more efficient than
market
Equity

Mengapa sektor publik penting?

- kegagalan sistem pasar
- pemerintah lebih efisien dari pasar
- pemerataan
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe

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Market System and Individual

Rights
Right

to freedom of exchange
Rights protected by:

police
national defense
court system

Protection

of rights creates incentives to

produce goods
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe

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Sistem pasar dan hak individu

Hak

untuk bebas dalam pertukaran

Hak dilindungi oleh : polisi, pertahanan
nasional, sistem pengadilan
Hak perlindungan menciptakan insentif
untuk memproduksi barang

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Government as Protector of
Rights
Primary

function of government is
protection of individual rights
Proper level of protection is debatable
Many rights can be protected through
private provision

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Pemerintah sebagai pelindung

hak
Fungsi

primer pemerintah adalah

perlindungan hak individu
Tingkat yang tepat dari perlindungan
adalah belum pasti
Banyak hak yang dapat dilindungi melalui
penyediaan swasta

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

Randall Holcombe

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The Government as Violator of

Rights
Any

government powerful enough to

protect rights is strong enough to violate
rights
Public sector institutions should be
designed so as to act in public interest

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Pemerintah sebagai pelanggar

hak
Beberapa pemerintah yang kuat mampu melindungi dan
melanggar hak
contoh :
Perlindungan hak konsumen melindungi hak masyarakat
melepaskan harga premium ke harga pasar berarti
pemerintah melepaskan tanggung jawabnya atas
komoditas yang tingkat konsumsi oleh rakyatnya paling
tinggi, Pertamina rugi
Lembaga sektor publik seharusnya dirancang untuk
bertindak dalam kepentingan publik

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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The Public Interest

What

does it mean to act in the public

interest?
Greatest good for the greatest number
Utilitarianism public interest measured
by total utility of society
Contemporary Utilitarianism weigh
benefits and costs
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Pareto Criteria
Pareto

superiority change makes at

least one person better off; no one worse
off

compares two possible situations

Pareto

optimality no one can be made

better off without making one person
worse off

applied to a single situation

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

Randall Holcombe

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Kriteria Pareto

Pareto superior : perubahan yang membuat

sekurang-kurangnya satu orang menjadi lebih
baik; tidak ada yang menjadi lebih buruk
(membandingkan dua situasi)
Pareto Optimum : tidak ada seorang pun yang
menjadi lebih baik tanpa membuat satu orang
menjadi lebih buruk (aplikasi pada satu situasi)

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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The Pareto Criteria

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Kriteria Pareto

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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The Pareto Criteria

Market

Exchange and Pareto Criteria

Satisfies

utilitarian criterion
Satisfies Pareto superiority (in absence
of negative externalities)

Political Exchange and Pareto Criteria

Political

process if all agree to a

change, change is Pareto superior

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Limitations of Pareto Criteria

Not

possible to adhere strictly to Pareto

criteria
Lends legitimacy to status quo
Does not rank all possible states of the
world

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Keterbatasan Kriteria Pareto

Tidak

mungkin mematuhi secara ketat

kriteria Pareto
Meminjamkan legitimasi status quo

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

Randall Holcombe

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Other Measures of the Public

Interest
Potential

compensation gainers value

gains more than losers value losses
Cost-benefit analysis dollar value placed
on costs/benefits of a project
Social welfare function indifference
curves depicting welfare of entire society

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Ukuran lain tentang

kepentingan publik
Kompensasi

potensial
Analisis biaya manfaat
Fungsi Kesejahteraan sosial

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Other Measures of the Public

Interest

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Ukuran lain : Fungsi Kesejahteraan sosial

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

Randall Holcombe

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Positive and Normative

Economics

Positive economics what is

conclusions

will be either right or wrong

Normative economics what should be

involves value judgments

Ekonomi positif apa itu
kesimpulannya bisa benar atau salah
Ekonomi normatif apa seharusnya
Melibatkan pertimbangan nilai

PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy

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Normative Analysis and Public

Interest
Positive

Pareto criteria useful to evaluate public

interest

Public

analysis evaluates effects of policy

sector involves normative analysis

Analisis positif mengevaluasi dampak kebijakan (kriteria

Pareto berguna untuk mengevaluasi kepentingan
publik/umum)
Sektor publik melibatkan analisis normatif
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
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Goals of Public Policy

Reallocate

resources efficiently positive

analysis
Equity normative analysis

Tujuan kebijakan publik:

Mengalokasikan kembali sumber daya secara
efisien analisis positif
Pemerataan analisis normatif
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe

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