Mandatory versus Discretionary Spending: The Status Quo Effect

Do mandatory spending programs such as Medicare improve efficiency? We analyze a model with two parties allocating a fixed budget to a public good and private transfers each period over an infinite horizon. We compare two institutions that differ in whether public good spending is discretionary or mandatory. We model mandatory spending as an endogenous status quo since it is enacted by law and remains in effect until changed. Mandatory programs result in higher public good spending; furthermore, they ex ante Pareto dominate discretionary programs when parties are patient, persistence of power is low, and polarization is low. (JEL C78, E62, H41, H61)

The Management of Opiate Abuse: Learning from other Addictions

Similarities between the addictions suggest that much may be learned about the management of opiate abuse from a study of the problems and results of treatment in other types of compulsive or addictive behavior. Medical methods of treatment, notably methadone, laevo-alpha acetyl methadole, naltrexone and random urine screening, may make a useful contribution to improvements in the outcome of mandatory programs when combined with close supervision, and a rapid and predictable response to lack of compliance. Some important features of a model treatment program are suggested.