Science, Tech and Public Policy Syllabus

17.309/ESD.83 /STS.83 SCIENCE, TECHNOLOGY AND PUBLIC POLICY FALL 2015 – UNDERGRADUATE - VERSION 1– 2015/09/09 Professor Kenneth A. Oye Massachusetts Institute of Technology Lectures M-W 1:30-3:00 PM in E25-111 Science and Engineering Systems Division

Political

COURSE OVERVIEW: Beneath most fights over contemporary science and technology policy sit enduring debates over balancing risks of market failure and government failure, credibly assessing knowledge, and managing tradeoffs across efficiency and ethics. This course is structured around economic and political theories of regulation, modified to address problems associated with integrating scientific information into public and private decisions. Political economy cases are drawn from intellectual property rights, antitrust, environmental, health and security policy, technical and regulatory standards, and insurance. Knowledge cases focus on debates over effects of emerging technologies, passive smoking, particulate matter, pharmaceuticals, weapons systems, and adversarial military capabilities. The course concludes with sessions on evaluating and improving public policy in these areas. Introduction: This unit provides a survey of justifications for and critiques of public policies. The justifications include classic microeconomic defenses of the role of government in mitigating economic market failure (listed below) and philosophical arguments on equity, justice and individual rights. These justifications are contrasted with critiques of government, including work on representational bias, influence costs and regulatory capture, organizational and bureaucratic politics, and regulatory rigidity. Political Economy of Science and Technology Policy: This unit is ordered as responses to sources of market failure. For each category of market failure, we work through major theorists, historical cases that establish precedents, and institutional and political problems associated with nominal solutions to market failures, and then debate selected contemporary science and technology cases.  Unstable Property Rights: Patents, copyright and trade secrets with reference to telephone, software, drugs, engineered life.  Oligopoly and Monopoly: Antitrust policy with application to oil, transport, telecomm, and operating systems; strategic trade.  Environmental Externalities: Market oriented and regulatory approaches to pollution, auto-fuel standards, climate change.  Health Externalities: Vaccination, antibiotic stewardship, smallpox, polio, SARS, H5N1, Ebola  Security Externalities: Controls on material and information; nuclear, cryptographic, biological, cyber security; DURC  Adverse Selection: Selection effects with information asymmetries with reference to finance, genetic screening and insurance.  Imperfect Information and Consent: Risk shielding regulations with reference to food, drugs, safety, human research protocols.  Coordination: Technical standards for screw threads, TCP/IP, Biobricks; global and regional regulatory harmonization. Generation and Assessment of Scientific and Technical Knowledge: This unit examine problems associated with evaluating scientific and technical knowledge. How should resources be allocated to research and education? What evidence is deemed credible in areas marked by uncertainty? How should science be incorporated into public and private decision making? A. Setting Educational and Research Policies: The role of peer review, expert panels and logrolling/earmarking in defining research areas and allocating research and educational funds, with attention to NIH/NSF/MIT/National Laboratories and counterparts abroad. B. Assessing and Using Scientific and Technical Knowledge: The role of the media, judiciary, universities and other organizations in evaluating scientific information in areas of uncertainty and controversy. Cases include: (1) Security: DoD on C3I, BMD; US and UN on Iraq, Iran, PRK and Syrian WMD; (2) Environment: EPA/HEI on PM, NIEHS/OSTP on mercury, IPCC on climate change; (3) Health and Safety: FDA and NIH on transfats, courts on smoking, implants, FDA/MHRA/EMA/IOM/PCAST on drug efficacy, safety and effectiveness

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Concluding Sessions: This unit provides a structured review of the course through discussion of two cross cutting themes. A. Evaluating policy: Contrasts consequentialist and categorical approaches to evaluation, with discussion of indicators of performance in education, health, environment and security. Focus on avoiding perverse side-effects of indicator selection. B. Improving policy: Contrasts improving initial decisions with adaptive approaches that treat policies as imperfect “experiments” that generate information on side effects, costs, and legal/political constraints and use information to correct policies. ELIGIBILITY: This course is designed for graduate students in engineering, the sciences, humanities, and social sciences. A basic course in microeconomics and some political literacy is useful as background, but is not mandatory. A keen interest in controversies in science and technology policy and enthusiasm for improving policy outcomes is essential. This class is designed to fulfill core requirements for the Technology and Policy Program and the MIT Science and Technology Certificate. READINGS: Expect 100 to 200 pages per week. Viscusi et al Economics of Regulation and Antitrust (Fourth Edition) covers basic regulatory economics, while scholarly pieces and popular articles treat contrasting views and case materials. The MIT Press Bookstore @292 Main St is selling Viscusi at a discount. Other required readings will be available on STELLAR website. This syllabus is preliminary. To incorporate current developments into this class and to address student initiated cases, an amended reading list will be distributed on STELLAR at least one week before each topic. STAFF Instructor Kenneth Oye E40-437 [email protected] Senior Advisor Lawrence McCray E40-438 [email protected] Teaching Assistant Marika Landau-Wells E40-444B [email protected] Teaching Assistant Tim McDonnell E40-444B [email protected] Administrative Assistant Phiona Lovett E40-450 [email protected] REQUIREMENTS AND GRADING: Due dates are on the schedule on page 3. Grading weights are as follows: Midterm Exam 10% Final Exam 30% Class participation 10% P1 Political economy paper 25% P2 Knowledge assessment paper 25% Integrated Papers 50% EXAMINATIONS: The midterm and final exams are based in part on essay pools distributed in advance to focus preparation and on short questions not distributed in advance to test knowledge of core concepts and key readings. Preparation for the essay pool questions is open book with cross-consultation. The exams themselves are in class and closed book. PAPERS: Graduate students may write two papers of 10-15 pages as per below or write one research paper of 20-30 pages.  Please submit topic or topics to TA on or before September 21 and arrange a meeting to discuss topics and secure approval.  You may align the topic of the knowledge assessment paper with the substantive area treated in the political economy paper  You may align course paper topics with thesis, dissertation or qualifying papers, but papers should fit rubrics provided below.  You are encouraged to submit drafts of papers to your TA for comments to improve the quality of your paper.  Please work with your TA to sharpen research skills, writing and referencing. For a detailed-notuser-friendly source, see The Chicago Manual of Style. For a useful less formal source, see Charles Lipson, Doing Honest Work in College (Chicago, 2004). POLITICAL ECONOMY PAPER RUBRIC: Select a market failure and associated policy controversy from classes 1-15. Then write a 10-15 page double spaced paper on one of the following topics or secure TA permission to develop a topic on your own. (A) Describe and analyze the source of market failure and lay out public policies to rectify the market failure OR (B) Explain why benefits of attacking market failure are more than offset by costs of failures of political institutions OR

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(C) Identify tradeoffs across rectifying market failure and minimizing institutional failure; suggest ways to improve terms of tradeoffs. NOTE: Papers should address a class of market failure examined in this class, but are NOT limited to cases treated in class. KNOWLEDGE ASSESSMENT PAPER RUBRIC: Select a case covered in sessions 17-24 or a case not treated in class. Then write a 10-15 page double spaced paper on one of the following topics or secure TA permission to develop a question and response on your own. (A) What advice would you offer on how to improve public decision making in a case or cases where knowledge appraisal issues are critical? Please discuss the scientific controversies at issue in these or other cases, the positions and interests of important actors engaged in fights, and the efficacy of third party institutions like HEI and APS in legitimating conclusions in these fights. Optional element: Into whose ear would you whisper advice to improve public decision making? Why? OR (B) Please take a position on the scientific issues in one case, and explain why you believe that the evidence allows you to reach a rational and objective conclusion on scientific as distinct from policy issues. Then discuss why debates in the case continued in the face of the evidence that you cite and discuss what it might take “to bring finality to the process.” OR (C) Write an essay on why both questions above reveal a fundamental lack of understanding of how knowledge claims are constructed, de-legitimated, re-constructed, and re-legitimated in policymaking and on the practical implications for your case. COMBO INTEGRATED PAPER RUBRIC: In some instances, problems in political economy of technology policy is closely aligned with a problem in assessing scientific and technical information. In those cases, development of an integrated paper that combines analysis of the politics and economics with analysis of the fights over knowledge may be appropriate. With permission of the TA, you may choose to write one integrated paper instead of two separate political economy and knowledge papers. If you select this option, please try to provide a draft early than the deadline noted on the schedule on page 3 to allow more time for comments and revision. SPECIAL RESEARCH PAPER ON ADAPTIVE REGULATION: Dr. Lawrence McCray will form a working group of those interested in retrospective and prospective studies on planned adaptation in risk regulation. Last year, students wrote on planned adaptation in air safety, with studies on NTSB-FAA regulation of commercial and general aviation and on DoD systems for evaluation of information from crashes and near misses of fighter and transport aircraft. This year, either a topic will be developed in consultation with interested students or the group may go with a mixture of topics. Dr. McCray is a fellow at the Center for International Studies. He was founding Director of the National Research Council Policy Division and worked on regulatory reform at EPA and OMB. DISCUSSION SECTIONS: Graduate recitations will be held Mondays 4-5 PM in 66-168 and Tuesdays 10-11 AM in E51-085. Assignments to recitations will be made after the first class. Recitations will provide opportunities to seek clarification on core concepts, cover some of the questions that are provided to provide structure for reading and discussion, and then focus on a designated key topic set up by lectures and readings (initial key recitation topics provided on next page). LECTURES: At the start of term, STELLAR includes fall 2014 slides for all classes. 2014 slides will be replaced with 2015 slides shortly before each class. New slides will include a 2014 suffix. L1 W 09/09 L2 M 09/14 R1 L3 W 09/16 L4 M 09/21 M 09/21 R2 L5 W 09/23 L6 M 09/28 R3 L7 W 09/30 L8 M 10/05

Class Focus Introduction / Analytic Frames

Property Rights Memo on P1 P2 or P Combo Monopoly and Oligopoly

Environment I Transfer Payments Environment II

Core Analytic Issues Market failure Handout 1A Institutional failure Handout 1B Q: Clarify and apply basic concepts Incentivizing invention vs sharing the fruits of innovation P1 Political Economy Q: Does one size of IP fit all sectors? Limit rents, market power, political power vs capture scale benefits Q: Favor Chicago or New Critics?

Historical Cases Historical and MIT daily life examples of failures Provide personal examples? Bell, State St, Amazon, Cox2, AZT, Cipro, Henrietta Lacks, Chakrabarti P2 Knowledge Assessment Early IT innovation w/o IPR? Standard Oil, Alcoa, ATT-MCI, Enron, Microsoft Uses of market power?

Contemporary Cases Current policy examples

Coasian Bribe vs Public Tax/Subsidy Limit Externalities vs Foster Extortion Stiglerian Regulation

Rio Grande, Rhine, Baltic, Kola, Costa Rica Dupont-ICI CFC; Carrier SEER 13;

Emissions Trading, Revenue Neutral Carbon Tax, AIJ CDM EU diesel, ADM oxygenate and ethanol, GE

Rule on cell phone / tablet / laptop use KSR-Teleflex, Myriad, Apple-Samsung, NagoyaKL, TTP/TTIP, patent secrecy P Combo – Research Paper Integrating P1 P2 Anti-commons IT/bio? IP genes? AA-USAIR, ATT-TMobile, Comcast, Google Boeing-Airbus; Bombardier-Embraer Advocate Obama/EU or Bush antitrust?

4 17.309/ESD.83/ STS.83 Science, Technology and Public Policy Regulatory Competition R4 L9 W10/07 L10 T10/13 L11 W10/14 L12 M10/19

Disease Nuclear proliferation - Jim Walsh MIT Holiday – Columbus Day Cybersecurity – Danny Weitzman Imperfect Info and Consent

R5 W 10/21

Draft P1 Due

L13 W10/21

Adverse Selection

L14 M10/26

Coordination Technical Standards

R6 L15 W10/28 Rev F10/29 L16 M11/02 R7 W 11/04 L17 W11/04 L18 M11/09

Coordination Regulatory Standards Optional midterm review Midterm Exam Final P1 Political Economy Due Assessing Knowledge Problems and Responses EHS Cases I

R8 W 11/11 L19 M11/16

MIT Holiday – Veteran’s Day EHS Cases II

R9 L20 W11/18 L21 M11/23

Intel & Security Cases I Intel & Security Cases II

L22 M11/23 W 11/25 L23 M11/30 R10 L24 W12/02 F 12/04 L25 M12/07 R11 L26 W12/09 Rev F 12/11 Date TBA

Sci & Tech Reporting Deb Blum Draft P2 or P Combo Due MIT Holiday –Thanksgiving Dual Use Research Cases Information Leaks -Joel Brenner Final P2 or P Combo due Evaluating Policy Using Performance Indicators Improving Policy Foresight and Learning Optional final review Final Exam In Class Closed Book

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Limit Externalities vs Provide Rents Q: Use Olson to explain outcomes? Limit disease vs limit freedom Deny access, negotiate treaties Monday lectures held on Tuesday Costs external to individual, firm, ISP Shield from risk and exploitation vs limit gains from exchange Q: Individual liberty vs public good ? Q: Laissez faire v labels v bans Submission to TA for comments

BP clean fuel, HAACP Compare riparian and global 19th and 20th C epidemics NPT, Korea Agreed Framework No sections Estonia, Stuxnet, TJMaxx Narcotics, gambling, child labor, Pure Food and Drug Act Nuclear: Limit trade tech, fuel? Label GM food? 10-15 pages

climate change, cellulosic biofuels Make or bust climate coalition Vaccination, antibiotic use, H5N1, ebola Controls on enrichment, Iran Agreement

Limit instability vs limit innovation Insure against risk vs moral hazard Efficiency from standardization vs Limits on flexibility and innovation Q: laissez faire vs labels vs bans? Diverse Experimentation vs Harmonization vs Competition Laxity Time and location TBA Closed book in class exam Q: Diversity vs homogeneity? Revised to address TA comments Adversarial vs Technocratic Method Contested Claims vs Expertise Institutional arrangements for more credible less biased assessment Q: Adversarial vs Technocratic No Lecture Institutional arrangements for more credible less biased assessment Q: How improve EHS assessment? Assessing own capabilities Assessing other capabilities

Regulate to limit financial panics, lenders of last resort Screw threads, grain grades, firearm parts, VHS-Beta,TCP-IP Best cases for libertarians Codex, Basle capital adequacy, shipping standards

Genetics and med, life disability insurance? OBD and GPS and auto insurance? BioBricks, Electronic Heath Records, future Internet protocols Best cases for regulation Health, safety and environmental regs and WTO / NAFTA / TPP / TTIP

Essay pool plus short questions Best cases for diversity 10-15 pages Litigation, red teaming, third party assessment Transfats, implants, Triazolam, Vioxx, Plan B Apply to smoking and transfats

Graded / Limited Comments Best cases for harmonization Graded / Limited Comments Passive smoking and research funding

Methyl mercury, Harvard Six Cities PM2.5, “Climategate” Best/worst cases assessment C3I nuclear strategy; Patriot I USSR, China, Israel, India, Pak nuclear; bomber & missile gap Knight Science Journalism Program P2 10-15 pp P Combo 20-30 pp No Sections 11/23-11/25 DURC H5N1 Gain-of-function Differentiation of function? Pentagon Papers P2 10-15 pp P Combo 20-30 pp Review + mini-cases on perverse effects of indicators Q: Best/worst indicators? Review + exemplary cases and cautionary tales on adaptation

EPA endangerment; geoengineering, hydraulic fracturing, post Fukushima risks How manage research funding/access TRW BMD;* Iron Dome; F35 Iraq, Syria, Iran, North Korea WMD; China cyber

Essay pool and short essays

Graded / limited comments

Evening Session 7:30-9:00 PM Optional Submission for Comments L22 to be held 11/23 in evening slot Secrecy and Knowledge Assessment Q: How balance secrecy & honesty? Info Securing vs Info Sharing Revised to address comments Reiner: causal ascription & indicators Unintended effects on behavior Q: Leak effect on accountability-security? McCray-Peterson-Oye: adaptation Sensing, assessing, and learning Time and location TBA Time and location TBA

Sony, Anthem, OPM . . . and more? COUHES, OSHA, FDA drugs, food supplements, NYC big gulp Med/IT: Vaccines? Strong passwords? Regulate or ban Uber? Airbnb? Ungraded / Extensive Comments

EU open data access; USDA-Monsanto GMO research licensing agreement Apply to Viscusi/Sapolsky/Ashford/Morgan

“My most difficult story was covering X.” Ungraded / TA comments by M 11/30 Gene Drives Iraq WMD, DURC H5N1 and gene drives? Wikileaks, NSA disclosures Graded / limited comments Current examples of performance indicators for emissions, education; medicine, security Current examples of adaptive regulation of pharmaceuticals and biological engineering

SESSIONS 1 AND 2: INTRODUCTON TO SCIENCE, TECHNOLOGY AND PUBLIC POLICY WED

* Distribute syllabus and discuss course objectives, outline, requirements, logistics * Begin lecture and discussion on justifications and critiques of public policy (focus on market failure) * Collect information sheet with data on contacts, schedule for sections, and paper options

MON

* Continue lecture and discussion on justifications and critiques of public policy (focus on political and institutional failure) * Secure feedback on which topics and cases class would like to set up for 11/21 lecture

REQUIRED READINGS Syllabi from Harvard Kennedy School of Government (Holdren/Gallagher/Jasanoff) W. Kip Viscusi, Economics of Regulation and Antitrust, Preface, Ch 1 “Introduction”, Ch 2 “The Making of Regulation” (passim) Mancur Olson,The Rise and Decline of Nations, Ch 2 "The Logic." George Stigler, "The Theory of Economic Regulation," Bell Journal of Economics and Management Science, Spring 1971.

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Paul Milgrom and John Roberts, “Bargaining Costs, Influence Costs & Organization of Economic Activity,” in Alt, Perspectives on Positive Pol Ec 1990, pp 57-60, 78-89. Graham Allison, “Conceptual Models and the Cuban Missile Crisis,” American Political Science Review, V 63, N 3, pp 689-691. 1. Consider this syllabus together with those of Holdren, Gallagher, and Jasanoff. a. What critical perspectives and substantive problems are emphasized in the three KSG syllabi and this course? b. Syllabi are products of design choices in constrained systems. What do these syllabi reveal about the institutions in which they are taught? c. The table on page 3 covers many issues and cases. What issues and cases would you emphasize? De-emphasize? Why 2. Viscusi sits largely within a liberal economic tradition, with emphasis on failures in private economic markets and resulting inefficiency as the sole justification for domestic and international regulation and taxation. Consider sources of failure in economic and political markets from our first class. * Unstable Property Rights * Information Asymmetries and Imperfect Consent * Imperfect Competition and Monopoly/Monopsony * Adverse Selection and Tipping * Externalities and Public Goods Problems * Coordination Problems Provide examples of each source of market failure from your personal life. Then provide remedies for each example. 3. Political institutions as well as economic markets are prone to failure. What variables, outcomes and mechanisms are associated with the sources of institutional failure treated below? Which sources of institutional failure have you observed within MIT or other institutions? What solutions can you offer for each problem? a. Mancur Olson on the logic of collective action: What are public goods, free-riding and selective incentives? What mechanisms does Olson use to explain the overrepresentation of concentrated interests and underrepresentation of diffuse interests in political life? How do individuals manage to act on collective interests? b. George Stigler on regulatory capture: Through what channels can regulations provide benefits to parties that are regulated? Are potential beneficiaries of regulation better able to mobilize and organize effectively than parties that would be disadvantaged by regulation? Why? c. Paul Milgrom and John Roberts on bargaining and influence costs in centralized institutions: How do parties exert influence over outcomes in centralized institutions such as firms, universities or governments? What are examples of bargaining and influence costs? How can designers of institutions limit undue influence? What are costs of such protective measures? d.Graham Allison and others on organizational processes and bureaucratic politics: (1) Explain why standard operating procedures and fixed repertoires both enable organizational action and are sources of organizational dysfunctionality. Provide examples of dysfunctionality rooted in organizational processes and discuss possible remedies for the problems that you identify. (2) How do the interests of subunits within complex organization differ from those of the organization as a whole? How do bureaucratic actors secure greater autonomy, more resources and larger discretionary authority for their subunit? Does it matter whether the bureaucratic actor is or is not sincere in identifying subunit interests with larger organizational and national interests? 4. Life is not limited to the efficiency based economic arguments favored by Viscusi. Considerations of equity, fairness, preservation of culture and society, and human and environmental rights are often central to public policy. In lecture 2, we will consider a full range of justifications for policies, including utilitarian arguments that focus on the consequences of actions and deontological arguments that focus on the rightness or wrongness of categories of actions. Provide ordinary life or public policy examples of consequentialist and categorical justification. Then identify situations where conflicts between consequentialist and categorical approaches appear to be acute and where they are complementary. What are some sources of elasticity or malleability in these approaches to justification? Do participants in debates over public policy typically seek to understate or overstate potential tensions between these approaches? Optional Sources and References Used in Lecture Ronald Coase, "The Problem of Social Cost," Journal of Law & Economics October 1960. David Baron, "The Economics and Politics of Regulation," in Banks & Hanushek, Modern Political Economy, 1995. Karl Polanyi, "The Self-Regulating Market," in The Great Transformation, 1957, pp 68-77. Joseph Stiglitz, "Private Uses of Public Interests: Incentives and Institutions," Journal of Economic Perspectives, spring 98. James Q. Wilson, Politics of Regulation, Chapter 10.

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SESSIONS 3 AND 4: INTELLECTUAL COMMONS AND PROPERTY RIGHTS Viscusi, Economics of Regulation and Antitrust, Ch 24 “Patents and Pharmaceuticals.” Long, “The Libertarian Case Against Intellectual Property Rights.” Formulations, Autumn 1995. Eisenberg, “Noncompliance, Nonenforcement, Nonproblem? Rethinking Anticommons in Biomedical Research,” Houston Law Rev, 2007, 1059-1063, 1075-1099. Oye and Wellhausen, “Intellectual Commons and Property in Synthetic Biology,” in Schmidt (ed), Synthetic Biology, 2009. Duke Institute Genome Ethics Law and Policy, BRCA Gene Patenting Case, http://dukespace.lib.duke.edu/dspace/handle/10161/7413 8/29/2013 Bagley and Rai, “Nagoya Protocol and Synthetic Biology,” Wilson Center, Nov 2013. http://www.wilsoncenter.org/sites/default/files/nagoya_final.pdf pp 6-8 Specter, Seeds of Doubt, New Yorker 8/25/2014 http://www.newyorker.com/magazine/2014/08/25/seeds-of-doubt Shiva, Seeds of Truth, Permaculturenews 9/2/2014 http://permaculturenews.org/2014/09/02/seeds-truth-vandana-shiva-responds-new-yorker/ 1. “The justification of the patent system is that by slowing down the diffusion of technical progress it ensures that there will be more progress to diffuse. . . there can be no such thing as an ideally beneficial patent system, and it is bound to produce negative results in particular instances, impeding progress unnecessarily even if its general effect is favorable on balance.” Joan Robinson a. How do physical and intellectual property differ? Is it easier to defend strong property rights with respect to physical or intellectual property? Why? b. Long’s libertarian perspective contrasts with Viscusi. Evaluate Long’s claims on self-help alternatives to state sanctioned IPR. Are his ideas broadly applicable? Optional: See Loshin on how magicians protect IP without law and Friedman on digital watermarking. Does self-help in work in these areas? In other areas? c. Viscusi asks “What would happen to rates of innovation if governments did not provide IPR protection?” Is IPR more critical in pharmaceuticals than in software and IT? What factors affect the relationship between “promoting progress” and “diffusing the benefits of progress” in pharmaceuticals and IT? d. How are “new, useful and non-obvious” applied in pharmaceuticals and in other sectors including IT? Should these terms be redefined to increase inventor protections or narrowed to prevent overpatenting and permit greater diffusion? . Optional: Identify key legal issues in the Apple v Samsung fight. How do recent rulings affect the private interests of Apple/Samsung/Google? Public interests? 2. In 1998, Heller and Eisenberg argued that proliferating intellectual property rights can create an “anticommons” problem where complex and interlocking private claims deter investment. The 2007 Eisenberg reading summarizes the argument and assesses evidence on postulated effects in life sciences. a. In 2005, the Federal Court of Appeals struck down patents on DNA fragments lacking specific demonstrations of utility. Did this eliminate anticommons problems? b. In 2006, Scientific American warned that overly restrictive licensing and broad patents may kill the field of synthetic biology. The Oye/Wellhausen essay surveyed IP issues in academic and commercial synthetic biology. What is your position on the public-private dimension? On the ambiguity-clarity dimension? Why? c. In 2007 the US Supreme Court established a tougher standard for defining obviousness in the KSR v Teleflex case. Does a tougher standard on obviousness accentuate or reduce anti-common problems? Why? d. In 2013 the US Supreme Court redefined originality in its ruling against the validity of Myriad Genetics patents on isolated BRCA1 and BRCA2 genes. What was the US Supreme Court ruling? How did the Court limit the scope of the ruling? What issues remain unresolved? What were the principal arguments advanced by the parties? How will the ruling affect incentives for innovation and diffusion of benefits of innovation? e. Would you go with one IPR rule for all sectors, albeit at some cost in terms of fit, or go for different rules for different sectors? Please discuss pros and cons, with attention to political legitimacy and economic efficiency. Do you favor increased public research funding in areas where private IPR create anticommons problems? 3. Read Specter and Shiva, and consider differences across AIC genetic prospectors, developing country governments and local indigenous communities over the ownership of natural genetic resources, traditional knowledge and GM seed. a. Describe and evaluate Shiva’s position and Monsanto’s position on assignment of property rights. How does each treat traditional criteria for patentability -- new, useful, and nonobvious? b. What tradeoffs exist across creating incentives for bioprospecting for new uses of genetic resources, for sharing the benefits of discovery, for protecting rights to continuing traditional uses and for equitable ownership of genetic resources? c. What are the positions of major actors on these issues? Is this a fight that will endure or fade? What no agreement points are likely to emerge? d. What is your position on terms and conditions of ownership of natural genetic resources? Optional Sources and References Loshin, Secrets Revealed: How Magicians Protect IP without Law (2007). SSRN: http://bbbbssrn.com/abstract=1005564 Friedman, Future Imperfect: Technology and Freedom in an Uncertain World, Ch 8, “Watermarks and Barbed Wire,” 2008. Barrett, “Apple v Samsung: Three Lessons from the Smartphone Patent Fight, Business Week,” June 5, 2013 http://www.businessweek.com/articles/2013-06-05/apple-v-dot-samsung-3-lessons-from-the-smartphone-patent-fight Angell, The Truth about the Drug Companies, 2004. summary in NYRB http://www.nybooks.com/articles/17244 PhRMA response http://www.phrma.org/publications/policy//admin/2004-09-15.1077.pdf Miller, Samsung/Apple/Google, http://www.nytimes.com/2012/08/28/technology/samsung-case-puts-apple-closer-to-fight-with-google.html, 8/23/12 Tabuchi ,Tokyo Court Win to Samsung http://www.nytimes.com/2012/09/01/technology/in-japan-a-setback-for-apples-patent-fight.html 8/31/12 Allworth, Who Cares if Samsung Copied Apple? http://c4sif.org/2012/08/harvard-business-review-who-cares-if-samsung-copied-apple/ 8/20/12 Heller and Eisenberg, "Can Patents Deter Innovation? The Anticommons in Biomedical Research," Science May 1, 1998. Gleick, “Patently Absurd,” New York Times Magazine, March 12, 2000. Nocera, “Tired of Trolls? A Feisty Chief Strikes Back,” New York Times, September 2006. Swidey, “The Purple Pill,” Boston Globe Magazine, November 17, 2002. Lexis-Nexis Rai & Boyle, “Synthetic Biology: Caught between PR, Public Domain, and Commons,” PLOS Biology, March 2007. “Perspectives: How to Kill Synthetic Biology,” Scientific American June 2006. Endy, “Foundations for Engineering Biology” Nature. 2005. MIT Synthetic Biology Working Group, Adventures in Synthetic Biology, 2005. US Supreme Court, KSR vs Teleflex, Syllabus and Opinion of the Court, April 30, 2007. Shiva, “Importance of Saving Seeds”http://www.smartplanet.com/blog/pure-genius/q-a-dr-vandana-shiva-social-activist-on-the-importance-of-saving-seeds/10103 Shiva “The Enclosure of the Commons” http://www.twnside.org.sg/title/com-cn.htm

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COMPETITION POLICY, ANTITRUST AND STRATEGIC TRADE Doctrine Economics of Regulation and Antitrust, Chs 3-4, Ch 9 pp. 332-343 (Microsoft) David Hart, “Antitrust and Technological Innovation in the US,” Research Policy 30 (2001) 923-936. Stacey Mahoney, “Antitrust Enforcement Under President Obama” The Antitrust Counselor, January 2013. William Kovacic, “Competition Policy in the EU and US,” June 2, 2008. Section 3 “Similarities and Differences in Substance” p 8-13. EPRS, EU and US Competition Policies, 3/14 Antitrust & IT Brian Fung, “FCC Chair: Blocking AT&T/Tmobile Merger was Absolutely Right Call,” National Journal April 30 2013. Cecilia Kang, “FCC approves T-Mobile merger with MetroPCS,” Washington Post March 12, 2013 Comcast, “Comcast-Times Warner Fact Sheet” 2014 Mario Monti, “Statement on Microsoft” March 2004. Danny Hakim, Google is Target of EU Backlash at US Tech Dominance, NYT September 8, 2014. Strategic Trade Marc L. Busch, Trade Warriors: States, Firms, and Strategic Trade in High-Technology Competition, 1999. Ch 1 and 3. Glennon Harrison, “Challenge to Boeing-Airbus Duopoly in Civil Aircraft” CRS, July 25, 2011 http://fas.org/sgp/crs/misc/R41925.pdf James Kanter and Keith Bradsher, “Europe and China Agree to Settle Solar Panel Fight” NYT July 17, 2013. 1. US and EU Antitrust Doctrine: Hart offers a periodization of US antirust doctrines in the left and center columns below.. Formative Period 1890s-1930s Chicago School 1970s-1992 -------------2001-2008 New Deal 1930s-1970s New Critics of Chicago 1993 -2000 -------------2009-present a. What are essential elements of doctrine in each of Hart’s four periods? What links between market concentration and technological advance are assumed? What links between economic and political power are assumed? Read Viscusi on Bush and Mahoney on Obama. Fill in the blank with appropriate labels for doctrines. b. Should Viscusi be read as an example of what Hart terms Chicago School doctrine, or as social science that transcends doctrine and ideology? c. To what extent are doctrinal differences resolvable through empirical research? What information would be most useful in assessing the merits of schools of thought? Are doctrinal debates based on differences in values, hence not susceptible to resolution through empirical research? d. The EU stance on competition policy has traditionally been more interventionist than that of the US. Read Kovacic’s excerpt on similarities and differences in US and EU competition policy and the EPRS briefing document. To what extent are EU views based on principled differences in doctrine? In crassly regional interests in helping EU or US firms? Do you favor pre-2004 EU, post-2004 EU, or one of the four US approaches to competition policy? 2. Cases on Mergers and Acquisitions: Read Mahoney on Obama antitrust policy and the clippings on recent Obama administration antitrust actions. a. The FCC blocked AT&T-T-Mobile and approved T-Mobile MetroPCS. Is the AT&T decision a shift from Bush doctrine? What is your position on these decisions? b. The proposed Comcast-Times Warner merger is currently the object of regulatory scrutiny. Read the Comcast “fact sheet” on the merger and then do a bit of light research to evaluate the claims. What is your evaluation of the fact sheet? What is your position on the proposed merger? 3. Cases on Business Practices: Practices including price fixing, price discrimination, bundling, and superior management and structural factors including economies of scale and learning effects all play significant roles. Which sources of advantage would you ban? Permit? a. The US and EU have different postures on antitrust and Microsoft practices. Do somewhat distinct US-EU postures derive from differences in valuation of outcomes? Differences in assumptions on connections across design of technologies, sharing information on designs, and market outcomes? Differences in observations of Microsoft behavior and/or market structures? b. In September 2014, the EU reopened the Google antitrust settlement. Is the EU action based on unbiased application of EU antitrust doctrine? On naked regional interests in advancing the interests of European companies against a US competitor? What position should the US government take on this matter? 4. Strategic Trade and Industrial Policy: Busch assumes that learning and scale effects make entry into the aircraft production difficult, that the U.S. and EU derive substantial positive spillover benefits from aircraft production, and that these benefits do not diffuse readily across international boundaries. As a consequence, the US and EU subsidize and protect to support Boeing and Airbus. The Harrison CRS briefing provides an update from a US perspective. a. How strong are barriers to entry in aircraft production? What are consequences of moving from three to two to one major aircraft producers? - What potential linkage or spillover externalities may exist, with benefits beyond investors? Are spillover benefits largely national or international? - Who benefits from the European decision to launch and subsidize Airbus? From US policies to support Boeing in export markets? - Why do the US and EU not collude to rig prices and cut subsidies instead of competing head to head in markets for large civilian aircraft? - What aircraft development and purchasing options should be considered by AICs like Japan and developing countries like Indonesia, Malaysia, and the Emirites? c. Do concerns over market concentration justify government intervention in the civilian aircraft market? Or is this an area where Chicago School perspectives accepting concentration and criticizing intervention should prevail? Is the case for intervention stronger or weaker for aircraft than in Microsoft and Google cases? d. What means do the US and EU employ to implement strategic trade policies? How would you appraise the strategic effectiveness and international and domestic welfare implications of these methods? How do you read WTO findings? Are the twin findings a boon or a bane for the US Federal government and the EU? e. Subsidies have been used to champion Brazilian and Canadian regional jets, Korean automobiles, and Chinese solar panels. - From a global welfare perspective, should potential entrants into markets be allowed to rely on explicit and implicit subsidies to challenge dominant producers? - From a parochial national perspective, what costs and benefits should governments take into account as they consider inducing entry through industrial policies? - From a parochial national perspective, what costs and benefits should US and EU take into account as they use WTO and bilateral action against entrants?

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OPTIONAL SELECTIONS Philip Lowe, Competition Policy in the European Union http://www.eurunion.org/News/speeches/ http 2002/020701phillowe.htm Michael G. Egge et al, The New EC Merger Regulation: A Move to Convergence, Antitrust, Fall 2004. AEI-Brookings: Steltzer, Microsoft and AntiTrust, Nichols, Getting Facts Straight on Microsoft: Reply to Stelzer; Hahn, For Innovation's Sake. Ingrid Lunden and Darrell Etherington, “Apple to Appeal Injunction in US E-Book Antitrust Case,” Techcrunch Sept 6, 2013. James Kanter, “Google Makes New Offer to Settle EU Antitrust Case,” NYT Sep 9, 2013. “Microsoft Faces Fresh Antitrust Probe” Financial Times, Sept 2007. Jay Keizer,“Microsoft to 'comply immediately' with browser complaints”, Computerworld Sept 10, 2012. EU Commission, “The Intel Antitrust Case,” Amir Efrati and Vanessa Mock, EU, Google Nearing Antitrust Deal WSJ July 24, 2012 Trust Buster Takes Hard Line As E-Book Probe Continues SJ March 27, 2012. Stanley Holmes “Finally, a Boeing-Airbus Showdown,” Business Week Oct 7, 2004. Christopher Drew “A Feud Between Airbus and Boeing Has Given Neither Side a Clear Advantage” NYT Sept 16, 2010. Lawsky, "EU Crushes Microsoft Appeal" Hoover - EU Microsoft Precedent for Apple Intel? Smith, "Microsoft Comment on EU Court Decision." “Microsoft Ballot FAQ” http://www.networkworld.com/news/2009/072809-faq-microsofts-browser-ballot-screen.html?ry=gs Douglas A. Irwin and Nina Pavcnik, Airbus vs. Boeing Revisited” Journal of International Economics, 64 (2004) 223-245. WTO, Index of Disputes, Aircraft, DS316 and DS317 http://www.wto.org/english/tratop_e/dispu_e/dispu_subjects_index_e.htm#aircraft

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ENVIRONMENTAL EXTERNALITIES IDEAS Economics of Regulation and Antitrust, Ch 19, pp 646-650 (3rd) or 703-707 (4th), Ch 20, Valuing Life, Ch 21 Environmental Regulation. LONG: Heinzerling & Ackerman, Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection, Georgetown Law Center 2002 OR SHORT: Ackerman, “Priceless Benefits, Costly Mistakes,” Post Autistic Ec Rev, March 2005 http://www.paecon.net/PAEReview/issue25/Ackerman25.htm Ambec et al, “The Porter Hypothesis at 20,” Resources for the Future Discussion Paper No. 11-01 January 18, 2011 pp. 1-17 Oye & Maxwell, Self Interest & Environmental Management, in Ostrom/Keohane 1995 and J Theoretical Politics V 6, # 4, 593-624 1994. CASES Arturo et al, “Costa Rica’s Payment for Environmental Services Program,” Conserv Bio 2007, http://fds.duke.edu/db/attachment/310 (passim) Banuri and Opschoor, “Climate Change and Sustainable Development,” ST/ESA/2007/DWP/56, Oct 2007 (passim ) Chan “What can UN climate negotiators learn from ozone treaty?” Response to Climate Change, September 15, 2012. Stavins, “Climate Realities” NYT 9/21/2014 http://www.nytimes.com/2014/09/21/opinion/sunday/climate-realities.html Royal Society,“Geo-Engineering the Climate” September 2009, “summary” pp ix-xii. Socolow, “Wedges Reaffirmed,” Bulletin Atomic Scientists, 27 Sept 2011 http://thebulletin.org/web-edition/features/wedges-reaffirmed LONG US Executive Office of President, President’s Climate Change Action Plan, June 2013. (pdf) (passim) SHORT Mauldin, Obama Promises Push to Cut Emission” Harris, “What Happened to Biofuels?” Economist, September 7, 2013. “Revenue Neutral Carbon Tax” Guardian 6/14/14.http://www.theguardian.com/environment/climate-consensus-97-per-cent/2014/jun/13/how-revenue-neutral-carbon-tax-creates-jobs-grows-economy 1. Cost benefit analysis plays a prominent role in environmental, disease, security and safety policy. Be prepared to evaluate differences between Viscusi and Heinzerling/Ackerman on approaches to estimating mitigation costs, ascribing differential values to human lives, using quantitative and qualitative information, and discounting future benefits. What are the practical implications of these methodological choices? What are your views? 2. Coasian Payments: How will the effectiveness of bottom up decentralized Coasian payments vary under the following conditions? a. costs and benefits concentrated on few vs diffused over many actors b. information on external costs and benefits hard to gather vs clear c. initial distribution of rights favors polluters right to pollute vs favors right to clean air/water 3. Transfer payments are at the core of both Costa Rican and UN environmental programs. (a) The Costa Rican central government uses taxes to pay for ”environmental services.” Evaluate this approach to environmental bribery. Should the Costa Rican model be used in other countries? (b) Banuri calls for transfer payments from rich to poor to mitigate climate change and foster economic development. Evaluate Banuri’s proposal. What intellectual property issues are central if that program becomes a focal point for discussion? What are the merits of project based and permit based approaches? On binding baselines and trading? 4. Nonmarket Corporate Strategies: Conventional wisdom holds that environmental regulations come at the expense of firms. Consider other views. a. Stigler notes that regulations can benefit the regulated by providing: (1) subsidies for goods; (2) costs on substitutes or subsidies for complements; (3) price fixing; and (4) control over entry. Illustrate how environmental regulations may confer Stiglerian benefit.. In what cases do the regulated have a clear material interest in seeking or accepting regulation? Are cases of harmony between particularistic and general interests common? What ways of limiting unconstrained rent seeking can you suggest? b. Porter suggests that regulation induced innovation allows firms to use raw materials, energy, and labor more productively, thus offsetting costs of compliance. If reduced input costs and improved productivity more than offset the costs of compliance, then firms should be engaging in those actions on a voluntary basis. Thus, Porter is commonly cited to justify voluntary self regulation in environmental affairs. Evaluate the viability of the case for self-regulation across firms, sectors and countries. 5. International Climate Change Policy: Chan argues that climate change presents a commons problem that requires global agreements modeled after the Montreal Protocol on ozone. By contrast, Stavins projects failure of the UN process and favors bottom up approaches to climate change loosely related to the UN process.. a. What are the pros and cons on these approaches in terms of feasibility of negotiation and effectiveness if negotiated? Please consider the distributional effects of the proposals on interests of national, sectoral and nongovernmental actors and agents affecting negotiations. b. In the event that mitigation fails, the Royal Academy sees geo-engineering as an insurance option. What are the major arguments, pro and con, on moving adaptation and insurance options front and center in the climate change debate? Is a global framework needed in advance of use of geo-engineering? 6. US Climate Change Policy: Many elements of the US Climate Change Action Plan are based on Pacala and Socolow’s stabilization wedges. a. Pick one element of one wedge. To what extent will private firm interests be advanced or harmed by public action to stabilize emissions through that element? What patterns of support and opposition would you predict for the Pacala/Socolow program as a whole, for your wedge, and for the specific element you selected? b. The US Climate Change Action Plan states: “Biofuels have an important role to play in increasing our energy security, fostering rural economic development, and reducing greenhouse gas emissions from the transportation sector. That is why the Administration supports the Renewable Fuels Standard, and is investing in research and development to help bring next-generation biofuels on line.” The Economist piece on “What happened to biofuels?” describes ongoing difficulties in commercialization of advanced biofuels. Why has the Administration reaffirmed its commitment to advanced biofuels? What are merits and demerits of the policy? c. Economists are correct in noting that taxes are the most efficient methods of managing carbon externalities. Yet the US relies on a complex mix of CAFE standards, blending requirements, research programs, and EV subsidies. Why? Will current proposals for a revenue neutral carbon tax be politically acceptable? OPTIONAL READINGS REFERENCED IN CLASS AND SECTION OPT Karplus, “Climate and Energy Policy for U.S. Passenger Vehicles” Ch 7, February 2011 (passim) OPT Kenneth Oye, Economic Discrimination and Political Exchange, Ch 3 “The Logic of Contingent Action,” 1992, pp 35-50 (passim) OPT Michael Porter & Claas van der Linde “Green and Competitive: Ending the Stalemate” Harvard Business Review, September-October 1995. OPT S. Pacala and R. Socolow, “Stabilization Wedges” Science, August 13, 2004. OPT Daniel Esty, Rethinking Global Environmental Governance to Deal with Climate Change, Am Econ Rev Papers Proceedings, 2008 98:2 116-121. OPT W Kip Viscusi, “Racial Differences in Labor Market Values of a Statistical Life,” Journal of Risk and Uncertainty, Dec 2003. OPT IPCC, “Climate Change 2007: Mitigation – Policymaker Brief” May 2007. OPT Thomas Friedman, “The Power of Green” New York Times, April 17, 2007. OPT Sonja Peterson, “Greenhouse Gas Mitigation Through Technology Transfer?” Mitig Adapt Strat for Glob Change, 2008 283-305. OPT Mark A. de Figueiredo et al, Regulating CO2 Capture Storage,” CEEPR, April 2007. OPT J. C. Davies & J. Mazurek, Regulating Pollution: Does US System Work? 1997 OPT Peter Evans Kenneth Oye, “Conflict and Cooperation in Export Financing,” in EXIM Bank in the 21 st Century, IIE 2001, pp 113-158.

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DISEASE EXTERNALITIES WHO, The Evolving Threat of Antibiotic Resistance, 2012, Ch 1 3 4 http://whqlibdoc.who.int/publications/2012/9789241503181_eng.pdf 2012 Simon Carvalho & Mark Zacher, International Health Regulations in Historical Perspective. Published in Plagues and Politics, Price-Smith, 2001. Ebola Clippings: WHO “Ebola Virus” 9/2014; WHO “Study Warns Exponential 9/22/2014;” Garrett “Epic Failures” CFR 9/14/14 Gottlieb “Stopping Ebola Before It Becomes a Pandemic” WSJ 10/4/2014 1. Vaccination provides an individual with protection from disease, at some private cost in terms of the expense of vaccination and the risk of side effects. What benefits of vaccination are external to the individual? What are some policy implications of the existence of such externalities? 2. The WHO report describes sources and effects of increasing antibiotic resistance in microbes and outlines major policy options. a. How does indiscriminant use of antibiotics in treating patients, reliance on incomplete courses of treatment with antibiotics, basic sanitation and hygiene in hospitals and clinics, and use of antibiotics in animal feed contribute to development of drug resistant strains of microbes? b. What policies to influence patient / physician / farmer behavior do you favor to address this externalities problem? c. With respect to use of antibiotics in animal feed, the WHO favors severe restrictions, the FDA favors voluntary limits, the National Resources Defense Council favors mandatory restrictions, a Federal court has ordered FDA to move on mandatory restrictions, and the American Farm Bureau favors preservation of antibiotic access. How are interests of actors served by their positions? What position do you favor? Given actor interests and power, is your favored policy feasible? d. Do international differences in policies on use of antibiotics in animal feed create trans-border health externalities? What international policy measures toward nations with relatively lax policies would you favor? Why? 3. Discuss the appropriateness of compensatory transfer payments for management of externalities associated with disease prevention and treatment. In which of the following cases is compensation most appropriate? Least appropriate? * Industrial countries fund WHO programs that fund polio vaccination programs in developing countries * transfer payments from Asian governments to poultry growers for reporting and destroying birds infected avian flu * transfer payments from US government to US farmers for not using antibiotics in animal feed * transfer payments to patients with TB to complete full courses of treatment for TB 4. Policies to control diseases include domestic measures (such as vaccination and sanitation) to prevent or treat diseases within countries and border control measures (such as quarantines and travel bans) to limit the spread of disease across countries. Carvalho and Zacher discuss these issues in historical perspective with reference to plague, cholera, smallpox and yellow fever. We will discuss these issues with reference to HIV, TB, SARS, avian flu and Ebola today. a. With reference to border controls, discuss differences in the interests of states with infectious diseases and of other nations in limiting trade, shipping and travel. b. What incentives do governments have to overstate or understate the extent of outbreaks of infectious diseases to affect compensation flows or to minimize border controls? What costs are associated with over or under reporting? Has the capacity of states to manipulate information flows increased or decreased over time? c. The WHO evolved as a response to the limitations of unilateral and bilateral exchanges of compensation and information. How does this organization (and associated multilateral rules) serve to promote more efficient and equitable outcomes in international disease management? d. From a narrowly self interested perspective, what should advanced industrial nations do with respect to tuberculosis in sub-Saharan Africa and Russia? SARS and avian flu in Asia? Ebola in Africa? From a broadly ethical perspective, what departures from narrowly self interested behavior would you recommend? Optional Readings LGarrett, “Cause for Concern Beyond China? H7N9 Flu” . CDC, Antibiotic Resistance Threats in the United States, 2013 http://www.cdc.gov/drugresistance/threat-report-2013/pdf/ar-threats-2013-508.pdf Joshua Sharfstein, “Statement on Preservation of Antibiotics for Medical Treatment Act of 2009,” July 15, 2009. Centers for Disease Control and Prevention, “Antibiotic/Antimicrobial Resistance,” http://www.cdc.gov/drugresistance/index.html Nat Resources Def Council, “Saving Antibiotics” http://www.nrdc.org/food/saving-antibiotics.asp?gclid=CJe2vKLv2LICFcuh4AodqDgArA American Farm Bureau, Preserving Antibiotics Access, August 2012. http://www.fb.org/issues/docs/antibiotics12.pdf US District Court, NRDC v FDA, 2012. http://docs.nrdc.org/health/files/hea_12032301a.pdf Garrett, The Challenge of Global Health,” Foreign Affairs, January/February 2007. http://globalpublicsquare.blogs.cnn.com/2013/04/06/chinas-bird-flu-mystery/ Center for Science and the Public Interest, Antibiotic Resistance Project, http://www.cspinet.org/ar/ Scott Barrett, Why Cooperate? Oxford University 2007, Ch 4, Financing and Burden Sharing. Google books / not on stellar. NPR, Kicking the Habit of Antibiotics on the Farm http://www.npr.org/programs/atc/features/2001/aug/foodsafety/010815.antibiotics.html World Health Report 2004, Chapter 1. A Global Emergency http://www.who.int/whr/2004/en/03_chap1_en.pdf Jon Cohen, Ground Zero: AIDS Research in Africa, Science 23 Jun 2000. http://www.sciencemag.org/cgi/content/full/288/5474/2150 Constance Holden, Reemerging Diseases: Stalking a Killer in Russia's Prisons Science 286: 1670. William Bishai, Rising Tide of Multidrug Resistant Tuberculosis in Developing Countries http://www.hopkins-id.edu/diseases/tb/tb_bishai.html Jeffrey Sachs, Malaria and Economic Development, http://www.cid.harvard.edu/malaria/ Barry R. Bloom, David E. Bloom, Joel E. Cohen, and Jeffrey D. Sachs, Investing in the World Health Organization Science 284: 911.1 Illana Ritov amd Jonathan Baron, Reluctance to Vaccinate: Omission Bias and Ambiguity in Cass Sunstein, Behavioral Law and Economics FDA, Enrofloxacin for Poultry, Federal Register, October 31, 2000, http://www.fda.gov/OHRMS/DOCKETS/98fr/103100a.htm Keith Bradshur, The Front Lines in the Battle Against Avian Flu Are Running Short of Money, NYT October 9, 2005 John Fauber, Bayer, FDA battling over animal drug, Journal Sentinal Nov 3,01 http://www.jsonline.com/alive/news/nov01/antisid04110301.asp Peter Piot, Global AIDS Epidemic: Time to Turn the Tide, Science, 23 Jun 2000. http://www.sciencemag.org/cgi/content/full/288/5474/2176 Salim A Karim, Globalization, Ethics, AIDS Vaccines, Science 23 Jun 2000. http://www.sciencemag.org/cgi/content/summary/288/5474/2129 WHO, “Progress Report 2002: Global Defence Against Infectious Disease,” Intro, www.who.int/infectious-disease news/cds2002/index.html Ifzal Ali, Asian Development Bank, “SARS and Asia’s Economy” 13 May 2003, www.adb.org/documents/Speeches/2003/ms2003044.asp

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SECURITY EXTERNALITIES Grosso, “Rare Earth Elements in National Defense,” CRS R41744, Sept 17, 2013, Summary + Options for Congress pp 22-25 Herzog, “Revisiting the Estonian Cyber-Attacks: Digital Threats and Multinational Responses,” Jrnl Strategic Studies, Summer 2011 pp. 49-56. Oye, “Proactive and Adaptive Governance of Emerging Risks: The Case of DNA Synthesis and Synthetic Biology,” IRGC 2012, pp 2-12. Nincic, “Getting What You Want: Positive Incentives in International Relations,” International Security, Summer 2010, pp. 138-183. Katzman, “Iran Sanctions,” CRS RS20871, Sept 2012, Summary + Effectiveness of Sanctions, pp. 47-54. Iran Clips - Erdbrink, “Iran Seek Nuclear Accord” NYT 9/20/2013; “Iran Vows to Bypass” Reuters 9/3/2014; “US to meet halfway” Haaretz 9/26/2014;. MIT Office of Sponsored Programs, Export Controls, http://osp.mit.edu/compliance/export-controls BIS Update on Export Control Reform, July 29, 2013 Kevin Wolf remarks 1. The rare earth crisis of 2010, the Estonia cyber-attacks of 2007 and the combination of the recreation of 1918 influenza in 2005 and the Guardian “mail order small pox” article of 2006 intensified debates over whether private actors acting on private interests take sufficient account of security externalities. a. What security externalities are associated with the market for rare earth elements? Consider each of the “options for Congress” presented by Grosso. Does each option rectify or exacerbate possible security related market failures? What winners and losers are associated with each option? What options do you believe are most likely to be adopted? b. What national and international security externalities are associated with cyber-infrastructure and security decisions? Are private interests and capabilities commensurate with public externalities? What are policy options for internalizing security externalities? What winners and losers are associated with options? c. Providers of DNA synthesis services confront obligations derived from international treaties including the UNBWC, agreements including the Australia Group, and national regulations and guidelines including the HHS guidance document on synthesis of double stranded DNA. Why have major synthesis firms chosen to form voluntary consortia and to adhere to screening protocols? What incentives and disincentives do firms not in synthesis consortia and nations not in the Australia Group have to join? What are advantages and disadvantages of voluntary consortia relative to regulations and treaties as a means to advancing biosecurity? 2. In our units on environmental and disease externalities, transfers of technology and/or money and sanctions were used in diverse settings. Both positive and negative incentives are used to address security externalities. a. Miroslav Nincic suggests that positive incentives have been more effective than negative sanctions. Is he correct? What conditions affect the probability of success of positive incentives in managing WMD externalities? Are strategies of compensation likely to work in the current North Korean and Iranian cases? b. Iran has been the target of comprehensive economic sanctions directed at altering Iranian incentives and of nuclear technology sanctions directed at limiting Iranian capabilities. As you read the 2012 CRS report on the effectiveness of sanctions and the 2013-2014 news stories on the current state of US-Iran negotiations, reach your conclusions on the effectiveness of sanctions against Iran. 3. Put yourself into the shoes of an MIT Lab Director in a technical area that you understand and open the link to MIT OSP Export Controls. Search the OSP website for help in figuring out what research and educational activities you can and cannot do. Make up a list of “allowed” “not allowed” and “unsure / need to consult others.” What are the most reasonable, least reasonable and most ambiguous features of current policy? To what extent do regulations affect the day to day operations or research strategies of your lab? How should MIT revise the OSP website and its internal procedures? What reforms in US policy do you favor? 4. The Obama administration is conducting a full scale reform of export controls, seeking to construct a higher fence around a smaller number of important goods and technologies. In evaluating reforms, focus on identifying principles underlying intervention in commercial transactions with military implications. * All trade has at least some possible implications for security. At one end of the spectrum, sales of weapons systems pose obvious security issues. In the middle, consider sales of dual use technologies with military as well as civilian applications. At the other end of the spectrum, any commercial transaction including sales of food or medicine may indirectly increase the military capabilities of a potential adversary by freeing up internal resources that might be used for military ends. Where should the U.S. draw the line? On what factors should this decision be based? * In a globalized economy, export controls are unlikely to be effective in denying technologies or goods to potential adversaries without substantial multilateral coordination. Yet international agreements are weak, and the US and other advanced industry countries often disagree over how to define export control lists. How should differences between the US, Europe, Japan and NIC definitions of militarily significant be handled? * In the absence of a stronger international regime, what unilateral reforms in export controls should the US undertake? NOTE: The controversy over H5N1 gain of function research and DURC (dual use research of concern) will be treated in Classes 17 and 21. Optional Selections on Export Controls and Negative Security Externalities David Cortright and George Lopez, “Bombs, Carrots and Sticks: The Use of Incentives and Sanctions,” http://www.armscontrol.org/print/1751 Thomas Bernauer and Dieter Ruloff, The Politics of Positive Incentives in Arms Control, excerpts from Introduction and Ukraine chapters. Stimson Center, Biological and Chemical Weapons Program, http://www.stimson.org/cbw/programhome.cfm Kenneth Durhst, From Containment to Cooperation: Collective Action and Wassernaar Arrangement, Cardozo Law Rev, 1079, Dec 1997, pp 1-14. . Daniel Drezner, Bargaining, Enforcement and Multilateral Sanctions: When Is Cooperation Counterproductive? Internat Org 54, 1, Winter 2000. Wassenaar Arrangement on Export Controls for Arms and Dual-Use Technologies http://www.wassenaar.org/docs/index1.html Gary Hufbauer, Jeffrey Schott, and Kimberly Ann Elliott, Economic Sanctions Reconsidered Third Ed

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INFORMATION ASYMMETRIES AND ADVERSE SELECTION George Akerlof, “Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism,” Quarterly Journal Economics, V 84 #3, 1970 pp. 488-500. Steven Shavell, "On Moral Hazard & Insurance," Quarterly Journal of Economics V 93, 1979. NIH, National Human Genome Research Institute, Genetic Discrimination, http://www.genome.gov/10002077 (updated September 2014). Neil Manson, “Genetic Testing and Insurance: Why Fear of Genetic Discrimination Does Not Justify Regulation,” Competive Enterprise Institute, April 2007, pp 1-20. Robert Carpenter & Bruce Petersen. “Imperfect Capital Markets, High-Tech Investment, and New Equity Financing,” Economic Journal, Feb 2002. 1. In “Market for Lemons,” Akerlof examines situations where asymmetries in information between buyers and sellers, borrowers and lenders, investees and investors, result in adverse selection and market collapses. Make sure that you understand what he means by asymmetric information and adverse selection, with specific attention to how asymmetric information may affect quantities provided and quantities demanded at particular prices. Work through his examples of markets for new and used cars and for health insurance, and then come up with examples of your own. We use Akerlof’s arguments heavily in our applications below. 2. The NIH National Human Genome Research Institute “Genetic Discrimination” website describes GINA provisions, justifications and effects.The Competitive Enterprise Institute argues against regulating use of genetic testing in insurance. Consider both equity and efficiency implications as you develop your position on the questions below. a. What information asymmetries and selection effects existed in insurance markets prior to the development of genetic screening? What were/are the implications of these information asymmetries for insurers and insured? For public policy on insurance? b. Should insurers be allowed to require genetic screening as a condition of granting coverage and/or setting premiums? What effects would widespread use or nonuse of genetic screening have on markets for medical insurance? c. Should insurers be barred from access to information provided by genetic screening to patients and physicians in the course of diagnosis and treatment? Should insurers be required to pay for such medically useful generic screening only if they have access to results? d. Should genetic screening be allowed in life and disability insurance? With reference to life and disability insurance, do you favor or oppose the use of discriminatory pricing or out denials of coverage based on evidence of the existence of preexisting conditions? 3. As Shavell indicates, most forms of insurance tend to give rise to the problem of moral hazard. a. What is moral hazard? Provide examples of insurance (broadly defined) in politics and economics. Did provision of insurance give rise to moral hazard? Shavell suggests moral hazard can be limited if insurers impose conditions on coverage. His examples of conditions in ordinary insurance policies are clear. What problems are associated with developing credible conditions on coverage for other forms of insurance? b. How will development of technologies for detecting voluntary behaviors that affect health risks or automobile accident rates affect the problem of moral hazard discussed by Shavell? To what extent should insurers be limited or encouraged in their monitoring of voluntary behaviors set as conditions on coverage? 4. Carpenter and Peterson relate information asymmetries to the phenomenon of high technology investment. a. What are the sources of information asymmetries in assessing risks and returns in high technology areas as distinct from more traditional venues of investment? Are markets for high technology investments more prone to the market for lemons problem than other markets? Do normal requirements for disclosure and reporting work as well for high technology investments as for conventional offerings? b. Do you buy their argument on differences in the extent and implications of information asymmetries and adverse selection for investors assuming equity positions in new enterprises and lenders to new enterprises? Do you buy their argument on how institutional differences between the US and UK in ease of equity financing account for the more rapid US growth of high tech investments? c. Do information asymmetries help explain the rise and decline of high-tech offerings? What are the consequences of oscillation in such markets for the private interests of investors? For general welfare? What public policy implications do you derive from these issues? OPTIONAL Edward Kennedy, “Report on Genetic Information Nondiscrimination Act of 2007,” Senate Comm Health, Ed, Lab, Pensions, April 2007, pp 1-33. Eduardo Porter, “For Obamacare, Some Hurdles Still Ahead,” NYT August 7, 2013 . US OTA Genetic Tests and Health Insurance, Glossary, http://www.wws.princeton.edu/cgi-bin/byteserv.prl/~ota/disk1/1992/9219/921912.PDF UK Human Genetics Comm, UseofGeneticinformation in Insurance, 2001, http://www.hgc.gov.uk/business_publications_statement_01may.htm U.S. Senate Bill Would Bar Genetic Discrimination, medline Oct 14, 2003, http://www.nlm.nih.gov/medlineplus/news/fullstory_14304.html Michael Hoy, “Genetic Screening and Price Discrimination in Insurance,” York, Oct 1999. http://www.york.ac.uk/depts/econ/dp/9925.pdf AssocBritInsurers,Code ofPractice2nd Ed Aug 1999 http://www.abi.org.uk/Display/default.asp?Menu_ID=946&Menu_All=1,946,0&Child_ID=203 Nicholas Kristof, “Genetic screening provides questions and answers alike, “ February 14, 2003, NYT, Mercury News etc. Peter Dixon, Genetic Testing and Genetic Screening: Ethics of Genetic Testing for Insurance, http://www.globalchange.com/genescreen.htm NIH-DOE Working Group on Ethical, Legal and Social Implications of Human Genome Research , “Genetic Information and Health Insurance Report of the Task Force on Genetic Information and Insurance,” May 10, 1993 http://www.genome.gov/10001750 UK Department of Health, Genetics and Insurance Committee, Genetic Screening for Huntington's Disease Approved in UK Life Insurance Premiums, 2000, http://www.doh.gov.uk/genetics/gaic.htm

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IMPERFECT INFORMATION AND IMPERFECT CONSENT-- RISKSHIELDING MIT COUHES, please read section on “informed consent” and pass human subjects training http://web.mit.edu/committees/couhes/ Viscusi, Economics of Regulation and Antitrust, Ch 22 European Environment Agency, Late Lessons from Early Warnings: Precautionary Principle 1896-2000, pp 11-16. Nicholas Ashford & Claudia Miller, Low-Level Chemical Exposures, Environmental Science & Technology, Nov 98. Harvey M. Sapolsky, The Politics of Risk, Daedalus 119, Fall 1990. Granger Morgan, Risk Analysis and Management, Scientific American, July 1993. Elaine Watson, “CSPI: There are legitimate concerns about GMOs, but not about food safety, and labeling would be misleading,”July 3, 2013 http://www.foodnavigatorusa.com/Regulation/CSPI-There-are-legitimate-concerns-about-GMOs-but-not-around-food-safety-and-labeling-would-be-misleading Michele Simon and Andrew Kimbrell, “Why Center for Science in the Public Interest is Wrong Not to Support Genetically Engineered Food Labeling” July 10, 2013 http://www.centerforfoodsafety.org/blog/2353/why-center-for-science-in-the-public-interest-is-wrong-not-to-support-genetically-engineered-food-labeling# Hans Georg Eichler, Kenneth Oye et al, “Adaptive Licensing,” Clinical Pharmacology and Therapeutics, March 2012. 1. Review COUHES sections marked overview, definitions, procedures, informed consent and policies. Then pass the online test. Discuss merits and demerits of an alternate policy of freeing MIT students to accept any risks so long as they are fully informed of risks they accept. Should children, addicts, the retarded, the mentally ill, prisoners, or sleep deprived financially strained MIT students be free to make decisions to accept or reject risks as subjects? BONUS: Is it hard or easy to game the test? 2. Chapter 22 of Viscusi limits the government risk shielding role to situations where information asymmetries, imperfect consent or externalities associated with risk acceptance adversely affect efficiency. By contrast, the EU Environment Agency Late Lessons from Early Warning” sees a larger role of government risk shielding, with ready reliance on the precautionary principle under conditions of uncertainty. a. Review economic and non-economic justifications for risk shielding. Provide an example of information imperfection associated with risk acceptance and explain how it may reduce efficiency. Provide an example of imperfect consent associated with risk acceptance and explain how it may reduce efficiency. Provide an example of an externality associated with individual risk acceptance and explain how it may reduce efficiency. Provide an example of a noneconomic justification for a government role in preventing an individual from accepting a risk. b. How would Viscusi respond to advocates of precaution? What criticisms would advocates of precaution offer of Viscusi’s economic arguments? What are your views? 3. Fights over risk shielding extend beyond fights over justification to fights over merits of classes of solutions. Break out policies into four piles: Command and control regulation (bans and standards); Provision of information on risks and precautions (labels); Resort to judicial protection through tort action (law suits for unsafe products and workplaces); and Laissez faire (buyer beware or employee beware) Are you predisposed for or against any of these approaches? What elements of specific situations would matter in deciding to tilt toward or against approaches? When would you favor command and control? Labels? Individual reliance on the courts through torts? When would you favor laissez faire? 4. Ashford and Sapolsky see the US regulatory response to low level exposures as deeply flawed, albeit in different ways. Ashford identifies biases toward underregulation of hazards with long latency periods, interaction effects, and controversial or unclear biomarkers. By contrast, Sapolsky identifies biases toward overregulation of what he sees as innocuous low dose hazards and underreaction to what he believes to be more substantial risks. On what differences in assumptions, values, problem definition and case selection do these contrasting positions rest? 5. Morgan contends that suboptimal risk policies are endemic. He creates a two dimensional risk space to explain variation in responses to risks, and urges adoption of techniques to ground risk policies on what he terms a scientific basis. How does Morgan define observable and controllable dimensions? How does he locate risks within his space? Evaluate his recommendations for improving risk shielding policies? 6. Regulations governing food supplements and pharmaceuticals differ markedly. To secure marketing approval, pharmaceutical firms (sponsors) are required to demonstrate efficacy and safety of new drugs to the FDA, EMA or other regulatory authorities. By contrast, firms producing food supplements are not allowed to make medical claims and are not required to demonstrate efficacy and safety. Should your right to accept risks associated with taking drugs and consuming food supplements be limited by regulatory authority? Should food supplements come under the same regulatory machinery used to determine safety and efficacy in pharmaceuticals? Conversely, should the regulation of pharmaceuticals be redefined to resemble current standards for food supplements? What standards would you deploy in these areas? 7. The current default pathway for drug approval hinges on a thumbs up or thumbs down decision based on a dossier of information (with emphasis on RCTs) provided by the sponsoring pharmaceuticals firm. Once approval is granted, regulators do not typically limit how physicians may prescribe the drug and do not typically require additional evidence on the safety and effectiveness of the drug in use. Adaptive licensing would provide earlier access, limit initial use to patients with best benefit-risk profile, harvest information on drug safety, efficacy and effectiveness in use, and modify terms of access in response to information harvested. Discuss the merits and demerits of moving toward adaptive licensing from the perspectives of patients, providers, sponsors and payers. Which actors would you expect to support and oppose adaptive licensing? 8. In November 2014, Colorado and Oregon voters will be asked to approve or disapprove mandatory labelling of GMO content of food. How would you vote? Why? OPTAshford, Precautionary Principle in US Law, http://dspace.mit.edu/bitstream/handle/1721.1/38470/LegacyOfPrecaution_19.pdf?sequence=1 OPT Vicki Kemper, “FDA Will Let Food Industry Put Health Claims on Labels,” 1 pp. OPT Mark deFiguerido, Fen-Phenand Redux, 6 pp. OPT Chris Adams, The Growing Case Against Herbs --- More Research Questions Safety, Effectiveness, 2 pp. OPT Clippings on US Supreme Court 2008 Preemption Cases on Drugs and Tobacco.

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COORDINATION – TECHNICAL STANDARDS AND REGULATORY HARMONIZATION Robert Mallett, “Why Standards Matter,” Issues in Science and Technology, Winter 1998. Carl Shapiro, “Setting Compatibility Standards: Cooperation or Collusion?” UCBerkeley, 2000 Timothy Sincoe, “Governing the Commons: Institutional Design for Standard Setting Organizations,” Boston University / NBER 2013 David Clark et al, “Tussle in Cyberspace: Defining Tomorrow’s Internet “ IEE/ACM Transactions on Networking, V 13, N 3,(June 2005, pp 462-475. Andrew Torrance and Linda Kahl, “Synthetic Biology Standards and Intellectual Property,” NRC Draft Report, September 17, 2012. Dale Murphy "The Business Dynamics of Regulatory Competition," UCIAS, 2002. David Vogel, “Trading Up and Governing Across: Transnational Governance & Env Protection,”Journal of European Public Policy 1997. 556-571. Lori Wallach et al, “WTO Dispute Settlement Procedure” and “Gattzila Ate Flipper,” from Whose Trade Organization, 2004 Thomas Bernauer and Philipp Aerni, “Trade Conflict over GM Organisms,” in Handbook on Trade and the Environment 2008. 1. Conflicts over technical protocols and standards can be as intense as conflict over regulatory standards. a. Mallett’s introduction emphasis on certification requirements in information technology. Consider who wins and who loses with no accepted technical protocols or certification standards. Then assess how different versions of common standards may favor producers in one nation over another. What limits on the ability to favor one producer over another exist? What role, if any, might transnational and international institutions play in managing disputes over protocols? To what extent are individual firms the most important architects of broadly accepted technical standards? Do his findings hold for IT? Beyond IT? b. Shapiro notes that “Standard setting is here to stay, with a vengeance. As more and more products work in conjunction to form systems, interface standards play a bigger and bigger role in the economy. And, as computer and communications systems encompass for a larger portion of economic activity, compatibility standards become an ever-more important aspect of competitive strategy.” He then raises connections among standard setting, antitrust and IPR. Should cooperative (or collusive) standard setting be viewed in terms of antitrust implications? Should cross license and patent pools be used to define new product standards? c. Sincoe examines the role of Standard Setting Organizations (SSOs) in developing shared technology platforms, with emphasis on tensions between capturing network externalities by enlarging user communities and maximizing short term revenues by imposing fees for access. Evaluate his invocation of Ostrom and Hardin on the commons and of Heller-Eisenberg on the anti-commons as metaphors for the political economy of standard setting. 2. Clark et al describe security, economic, and privacy challenges for evolving internet, link these challenges to what they term architectural or systems design problems, and then break out the design issues into specific issues on protocols and standards for the next generation internet. * In practice, the internet is being redesigned in bits and pieces rather than as a whole. Which protocol and standards issues must be handled at the level of the internet as a whole? Which may be addressed by regions or nations? Which may be addressed on a voluntary basis by subgroups? By individual users? * Are interests of major actors in internet protocols and standards becoming less compatible? Are problems associated with redefining internet architecture unique to IT, or are similar tussles commonly found elsewhere? How should institutional arrangements evolve to manage standard setting in tussle space? 3. Torrance and Kahl provide a legal overview of emerging problems of defining technical standards and protocols in synthetic biology, while Arkin’s short technical article examines effects of standards for characterization, manufacture and information sharing on the pace and diffusion of innovation in biological engineering. * What are the functions of standardization in this field? What do we know -- and not know -- about the functionality of standards in this domain? Do you favor rapid or deliberate development of complete or minimal standards covering small or large subsets of potential users? * How are synbio standards defined? What IP issues may emerge with synbio commercialization? How do IP policies intersect with standard setting? 4. Divergent regulations can at times give rise to "competitions in laxity" “upward harmonization” and “stable heterogeneity.” To explain and predict outcomes, look to the interests of firms, NGOs and countries as they struggle to secure competitive advantage. To evaluate outcomes, look to effects on welfare and equity assuming that rational actors take account of differences in regulations as they make investment and trade decisions. a. Murphy and Vogel discuss regulatory competition and harmonization in shipping, banking, and environmental cases. Are there any examples of competition in laxity? Of upward convergence? What factors account for differences in outcomes? b. Wallach and Woodall offer a critique of key WTO cases on salmon, fumigants, bovine growth hormones, dolphins, sea turtles, clean gasoline. What criteria are presently used by the WTO to address conflicts over SPS standards? What criteria should be used? c. Bernauer and Aerni contrast EU and US positions on GMOs, review the WTO decision favoring the US, and speculate on long term implications for the EU, US and developing countries. How do organized US and EU interests on GMOs differ? How will relative EU stringency and US laxity affect the strength of interested parties over the next decade? Do you predict convergence or divergence in US and EU policies? d. For what problems could free trade and regulatory divergence be sustained simultaneously? For what problems will regulatory convergence be a requisite of free trade? Where conflicts between domestic regulatory diversity and free trade exist, which should give way? Optional Readings and Lecture References David Clark et al, “Architectural Responses to Real World Demands on the Evolving Internet,” ACM SIGGCOMM 2003 Workshops, Karlsruhe. Tom Knight, “Technical Standards SynBio,” http://webcast.berkeley.edu/events/details.php?webcastid=15766, scroll to “community org,” 2006. Adam Arkin, “Setting the Standard in Synthetic Biology”, Nature Biotechnology 26, 771 - 774 (2008) Barry Canton et al, “Refinement and Standardization of Synthetic Biological Parts and Devices,” Nature Biotechnology 26, 787-793, 2008 Thomas Bernauer, Kenneth Oye, and David G. Victor, Regulatory Diversity: Can the World Trading System Cope? Schweizerische Zeitscrift fur Politikwissenschaft, V6, I 3, Autumn 2000. Friends of Earth WTO, http://www.foe.org/international/wto/guide.pdf pp 1-8, and http://www.foe.org/international/wto/scorecard.pdf pp 1-2 Paul Krugman, "Importance of Regulatory Asymmetries" & "Regulating Banking" from Intl Economics, pp 636-646. Marsha Echols, Food Safety Regulation in the EU and US: Different Cultures, Different Laws, Columbia Journal of European Law, Summer 1998. Suzanne Berger, "Introduction" in Berger and Dore, National Diversity and Global Capitalism, 1996. American Bar Association, Transnational Issues in Cyberspace: A project on the Law Relating to Jurisdiction http://www.abanet.org/buslaw/cyber/initiatives/prospect.html William L. Cary, "Federalism and Corporate Law: Reflections Upon Delaware," Yale Law Jrnl, V 83 No 4 March 1974. Ralph Winter, "State Law, Shareholder Protection and the Theory of the Corporation," Journal of Legal Studies, 1977. Charles Tibout, “A Pure Theory of Local Public Expenditures,” Journal of Political Economy 64: 416–424, 1956. Thomas Oatley & Robert Nabors, "Redistributive Cooperation: Market Failure, Wealth Transfers & Basle Accord," Internatl Organization, Winter 1998. Patrice Laget et al, European Responses to Biotechnology, ISTP, Summer 2001. Thomas Bernauer, Genes, Trade and Regulation, Ch 1 Princeton 2003. http://press.princeton.edu/chapters/s7665.pdf

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EVALUATING KNOWLEDGE 1. Introduction Sheila Jasanoff, “Contested Boundaries in Policy Relevant Science,” Social Studies of Science 17, 1987, pp 195-230. Lawrence McCray,"Doing Believable Knowledge Assessment for Policymaking: How Six Prominent Organizations Go About It.” August 2003. . REVIEW Economics of Regulation & Antitrust, Ch19 and Morgan, "Risk Analysis and Management" Scientific American, July 1993, 32-41.* (a) Jasanoff views risk assessment from a constructivist perspective, and cautions against the naive embrace of what she views as objectivist methods as a "solution" to problems. Jasanoff contests simple assumptions of rationality and objectivity. She notes that science is subjected to extreme deconstruction in the US regulatory process, then argues that the legitimacy of regulatory decisions ultimately rests on the persuasive reconstruction of justifications in scientific, economic and legal terms. Make sure that you understand her approach to interpreting changes in discourse on risk and her treatment of contested boundaries between science and policy. What are the implications of Jasanoff's position? (b) If Jasanoff were to treat Morgan and Viscusi as objects of a case study, what interpretations might she place on their arguments? You may wish to consider Viscusi table 19.3 with its assessments of relative risk. What are their purposes in setting forth the table? What is your view of the quality of risk assessments within the table? Or consider Morgan's analysis of objective risk appraisal and communication in light of Jasanoff. How may Morgan or Viscusi defend their objectivism against Jasanoff? Do you incline toward Morgan, Jasanoff, or other views? Why? (c) McCray examines third-party organizations that have evaluated the state of knowledge on defense, environmental, medical and other areas marked by uncertainty and controversy. Do they provide an escape from the problems Jasanoff identifies? When will parties to controversies be willing to forward issues to these organizations? When will these organizations have an interest in accepting and declining roles in controversies? What alternatives to third party appraisal can you suggest as (necessarily imperfect) solutions to knowledge assessment fights? 2. Research Affiliations and Research Results: The Health Effects of Passive Smoking Deborah E. Barnes and Lisa A. Bero, Why Review Articles on the Health Effects of Passive Smoking Reach Different Conclusions, JAMA, May 20, 1998. http://jama.ama-assn.org/issues/v279n19/rfull/jrv71060.html Letters by J Heck, KJ. Gorelick, Lisa A. Bero, Deborah Barnes, JAMA, October 7, 1998, http://jama.ama-assn.org/issues/v280n13/ffull/jlt1007-5.html OPT Duff Wilson, Medical Industry Ties Often Undisclosed in Journals, NYT 9/16/2010 (a) Barnes and Bero find that conclusions of review articles correlate strongly with author affiliations and funding. As you read their essay and letters, keep track of explanations of the correlation and figure out which explanations you find plausible. (b) What are the prescriptive implications of this controversy for research funding, editorial reviews, and disclosure? If you were a journalist or a regulator, how would you take account of research funding in assigning credibility to sources? 3 Research Findings and Policy Lags: Transfats and Coronary Disease Sabrina Tavernese, “FDA Ruling Would All But Eliminate Transfats,” NYT November 7, 2013, 2 pp. M. Warner, “A Life Long Fight Against Transfats” NYT December 17, 2013. F.A. Kummerow, “Lipids in Atherosclerosis,” Journal of Food Science, Volume 40, 1975 pp 12-17. T.H. Applewhite, “Nutritional Effects of Hydrogenated Soya Oil,” Journal of the American Oil Chemists’ Society, March 1981, V 58, 260-269. R.P. Mensink and MB Katan, “Effect of Dietary Transfatty Acids on HDL and LDL levels in Healthy Subjects,” NEJM, v 321 1989 436-441. Walter Willett, “Intake of Transfatty Acids and Risk of Coronary Disease Among Women,” Lancet, March 6, 1993, pp 581-585 In November 2013, the FDA announced that it will effectively ban transfats. This lecture covers the history of studies on transfats and CHD and then offer explanations of the lag between research and changes in policy. The readings include many of the primary research articles cited in lecture. (a) As the Warner and Tavernese pieces suggest, the lag between early studies and changes in US policy in this case is exceptionally long. Speculate on what factors may account for the delay and on what changes in processes governing research funding, knowledge assessment and FDA policy might have reduced the lag? What bad side effects might follow from the changes in processes that you are recommending? (b) Read Kummerow on rat and pig research (1975) and Applewhite’s critique (1981). Evaluate methods and results. If you were a journalist, how would you report on these pieces? What are key areas of uncertainty? If you were NIH, would you fund follow up research? (c) Read Mensink (1990) and Willett (1993). How do these studies differ from the Kummerow rat and pig studies? Evaluate methods, results, and implications for additional research. Evaluate implications for policies on dietary standards, labels requirements and transfat bans. 4. Judicial Role in Risk Assessment: The Breast Implant Case and the Use of Scientific Evidence after Daubert Frontline Marcia Angell, Science on Trial: Medical Evidence & Implants http://www.pbs.org/wgbh/pages/frontline/implants/medical/book.html Caitlin Burke, Review of Science on Trial, http://www.thenetnet.com/readme/angell.html Federal Judicial Center, Reference Manual on Scientific Evidence (2nd edition), Stephen Breyer, Introduction and Margaret Berger, Supreme Court's Trilogy on Admission of Expert Testimony, pp 1-38. http://air.fjc.gov/public/pdf.nsf/lookup/sciman00.pdf/$file/sciman00.pdf OPT Gina Kolata, F.D.A. Panel Backs Breast Implants Made of Silicone, New York Times, October 16, 2003. OPT The Breast Implant Controversy: A Snapshot in Documents and Pointers http://www.marmoset.com/60minut/Webnav/breast.html OPT Daubert vs Merrell Dow Pharmaceuticals, case syllabus http://supct.law.cornell.edu/supct/html/92-102.ZS.html (a) Read Angell and Burke on process and outcomes. Should the implant fight be read as a failure of the courts, with damages and costs awarded on the basis of junk science? Or as a triumph of the courts, with torts incentivizing testing of a potentially unsafe product? (c) Angell supports Daubert, noting that it requires judges to knock out junk science and to value scientific evidence properly. By contrast, critics argue that Daubert assigns the key gate keeping function to judges who, lacking the knowledge to appraise science, will privilege scientific orthodoxy, filter out results at odds with conventional paradigms, and seize upon uncertainty to reinforce the status quo.. As you read Breyer and Berger, try to place yourself in the position of a judge ruling on the admissibility of scientific evidence. What criteria would you adopt? What are the scientific, economic and political implications of the criteria that you select?

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5. Third Party Knowledge Assessment -- Particulates, Health and The Six Cities Case John F. Lauerman, A Tale of Six Cities, Harvard School of Public Health http://www.hsph.harvard.edu/review/a_tale.shtml Steven Milloy and Joel Bucher, EPA’s Peer Reviewed Perversion, Public Risk Management Association, 1997. http://www.junkscience.co Laura Johannes, “Pollution Study Sparks Debate Over Data,” Wall Street Journal, 7 April 1997, http://www.junkscience.com/news/secret.htm Health Effects Institute, Reanalysis of the Harvard Six Cities Study and the American Cancer Society Study of Particulate Air Pollution and Mortality, July 2000. pp iiv and 1-6. http://www.healtheffects.org/Pubs/Rean-ExecSumm.pdf Health Effects Inst, “Revised Analyses of Time-Series Studies of Air Pollution&Health,” 2003, http://www.healtheffects.org/Pubs/st-timeseries.htm (a) Lauerman sees a high quality epidemiological study that provides a sound basis for regulation. Milloy/Bucher see a study based on bad data with inadequate treatment of confounders. These are typical secondary reports on controversies. (i) Can you evaluate the quality of the study from the information presented in such reports? (ii) Can you identify potential institutional sources of bias from the information presented in such reports? What additional information do you need? (b) This controversy moved beyond the typical. Read Allen’s news report, and evaluate the arguments, pro and con, on release of data. Then read the preface and synopsis of the HEI reanalysis. (i) Step back from the dispute, and think through what factors made it possible to set up a reappraisal. Why would the Harvard researchers have agreed to share data? Why would industry and EPA have provided funding? What degree of agreement on goals and methodology is needed to perform a legitimate reappraisal? (ii) Evaluate the methods used and the results of the reanalysis. At the end of the day, whom do you believe? Why? (iii) To what extent is the HEI third party model one that could be used often to address controversies marked by substantial uncertainty and by claims of need to protect data? 6. “Climategate”and Beyond –IPCC, East Anglia and Evidence on Climate Change UK Commons Sci&Tech Comm, “Disclosure of climate data from CRU East Anglia, March 2010. 3-9, 47-51, balance as needed to evaluate claims. US Senate Comm Env & Pub Works, Minority “Consensus Exposed: CRU Controversy,” Feb 2010. 1-9, balance as needed to evaluate claims. “Accentuate the negative,” Jul 5th 2010, Economist online. OPT Netherlands PBL, “Assessing an IPCC Assessment: An Analysis of Statements on Projected Regional Impacts in 2007 Report,” July 2010. Interacademy Council, “Climate Change Assessments: Rev Processes & Procedures of IPCC” Aug 2010. 1-6, balance as needed to evaluate claims. IPCC, Climate Change 2014: Synthesis Report, http://www.ipcc.ch/pdf/assessment-report/ar5/syr/SYR_AR5_SPM.pdf NIPCC Climate Change Reconsidered II: Physical Science, Willie Soon, Chapter 3 “Solar Forcing of Climate.” 2013. a. The IPCC describes itself as “the leading international body for the assessment of climate change. It was established by UNEP and the WMO to provide the world with a clear scientific view on the current state of knowledge in climate change and its potential environmental and socio-economic impacts. The IPCC is a scientific body. It reviews and assesses the most recent scientific, technical and socio-economic information produced worldwide relevant to the understanding of climate change. It does not conduct any research nor does it monitor climate related data or parameters. Thousands of scientists from all over the world contribute to the work of the IPCC on a voluntary basis. Review is an essential part of the IPCC process, to ensure an objective and complete assessment of current information. IPCC aims to reflect a range of views and expertise. … Because of its scientific and intergovernmental nature, the IPCC embodies a unique opportunity to provide rigorous and balanced scientific information to decision makers. By endorsing the IPCC reports, governments acknowledge the authority of their scientific content. The work of the organization is therefore policy-relevant and yet policy-neutral, never policy-prescriptive.” Read and evaluate the 2007 Synthesis in light of the stated objectives of IPCC. b.“Climategate” narrowly defined centers on the implications of the hacked emails of the CRU at East Anglia. It has been the object of many inquiries, including the UK Commons Science and Technology Committee and US Senate Committee on Environment and Public Works (Minority Staff Report). Read the assigned portions of those reports and be prepared to summarize the differences in their conclusions. Then review the balance of the reports as needed to figure out where you stand on the points of difference. If you were the head of CRU, how would you respond? If you were the head of the IPCC, how would you respond? c. “Climategate” broadly defined centers on the credibility of the IPCC process and findings, with evaluations by news organizations, NGOs, political parties and knowledge assessment organizations including the Netherlands PBL (Environmental Assessment Agency) and the Interacademy Council. Consider alleged deficits in the findings of IPCC reports and in the processes used by IPCC to reach conclusions. Which present significant issues in terms of biases and errors on the substance of findings on climate change? Which present significant issues in terms of the credibility of findings on climate change? What adjustments in process might enhance the quality and credibility of conclusions? d. Compare and contrast the assumptions, reasoning, evidence and conclusions of the IPCC Climate Change 2014 IPCC and the Soon chapter on Solar Forcing of Climate. Place yourself in the shoes of an earnest MIT undergraduate or graduate student searching for truth, a journalist writing a story to deadline, and a harried policymaker seeking legitimate guidance. How would you go about evaluating and using these pieces for those purposes? 7. Geoengineering Options and Climate Change Juan B. Moreno-Cruz and David Keith,”Climate Change Policy Under Uncertainty: A Case for Solar Geoengineering,” Climate Change, May 2012. ETC, Climate and Geoengineering, http://www.etcgroup.org/issues/climate-geoengineering. David Victor, et al, “The Geoengineering Option: A Last Resort Against Global Warming? Foreign Affairs, March/April 2009. UK Royal Society, “Geoengineering the climate: science, governance and uncertainty,” http://royalsociety.org/document.asp?tip=0&id=8770 Greenpeace “Why Geoengineering Can’t Cut Thermostat” http://www.greenpeace.org.uk/blog/climate/perspectives-geoengineering-20090902 a. Debate over the potential risks and benefits of geo-engineering will become a central feature of climate change negotiations over the next few years. What groups, sectors, or organizations have an interest in the outcome of this debate? b. What scientific and technical issues sit at the core of the debate? What sources of scientific and technical uncertainty over benefits and risks are most policy relevant? What other sources of uncertainty are germane? What experiments may be appropriate to reduce policy relevant sources of uncertainty? What risks may be associated with such experiements? c. What bodies of expertise are most germane to the appraisal of risks and benefits of geoengineering and of experiments on geoengineering? What potential sources of bias may be associated with experts from these relevant areas? Based on your analysis of earlier knowledge assessment cases, what advice would you offer on how to structure knowledge assessment institutions and processes in this area?

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8. Assessing US Capabilities: The Patriot Missile Case Daniel Golden, “Missile Blower” Boston Globe Magazine, July 19, 1992. Jeremiah D. Sullivan, Dan Fenstermacher, Daniel Fisher, Ruth Howes, O'Dean Judd and Roger Speed, (American Physical Society), “Technical Debate over Patriot Performance in the Gulf War," email, Patriot Missile study original.pdf OPT Commentary by Stein, Kantelis, Zimmerman, http://www.princeton.edu/~globsec/publications/pdf/8_2steindisclaimer.pdf OPT Commentary by Lewis and Postol http://www.princeton.edu/~globsec/publications/pdf/8_3lewis.pdf Secrecy differentiates the debate over effectiveness of the Patriot missile against Scuds from our environmental and health knowledge appraisal cases. On the one hand, public disclosure of information on the effectiveness of weapons systems can facilitate the development of countermeasures that reduce the effectiveness of weapons systems. As a consequence, defenders of weapons systems are not free to release all information that may be needed to evaluate analyses of critics. On the other hand, secrecy can cloak analyses that serve interests of corporations and governmental organizations. As a consequence, conclusions unsupported by public release of data are often viewed with suspicion. (a) Looking at the Patriot case, what evidence can you muster on the importance of these perils? In what respects is this case typical or atypical? (b) The American Physical Society weighed in with an assessment on the narrow technical issues of whether frames of commercial video provide sufficient information to identify hits and misses and whether video evidence supported Postol/Lewis or Raytheon/Army. (i) Step back from the dispute, and think through what factors made it possible to conduct a reappraisal. Whose cooperation was needed? (ii) Did you find the panel and its results credible? Why or why not? (iii) If you were a member of APS, what position would you have taken on APS joining in a controversial policy dispute? (iv) What are the pros and cons of relying on professional associations to evaluate controversies over the efficacy of weapons? (c) What recommendations can you offer on managing tradeoffs between the need for unbiased appraisals of the efficacy of weapons systems and the legitimate need for secrecy? 9. Assessing Prospective US Capabilities: Near Term Deployment of National Missile Defense U.S. Department of Defense, Missile Defense Agency, homepage, http://www.acq.osd.mil/mda/mdalink/html/mdalink.html Union of Concerned Scientists, Technical Realities: An Analysis of the 2004 Deployment of US. NMDS http://www.ucsusa.org/global_security/missile_defense/page.cfm?pageID=1403, click on summary or full report. OPT Federation of American Scientists http://www.fas.org/irp/threat/bm-threat.htm http://www.fas.org/spp/starwars/program/nmd/ OPT High Frontier homepage http://www.highfrontier.org/hf_links.html OPT Americans For Missile Defense homepage http://www.conservative.org/md/ OPT Center for Defense Information http://www.cdi.org/ The websites by the US Department of Defense Missile Defense Agency and the Union of Concerned Scientists provide current initial sets of contrasting views. You may wish to move into the other sites for further info Take an hour or so to browse pro and con positions on the efficacy of deployment of a missile defense system and then formulate your position on the issues. a. What technical issues, if any, are at the heart of the policy controversy? Where do you stand on the technical controversies? How did you proceed to evaluate claims? What additional information would you like? b. How do assessments of component technologies and weapons systems affect international security strategy, domestic funding strategy, and domestic electoral strategy? What incentives do parties have to exaggerate or understate performance c. What capacity do the following actors have for evaluating claims of effectiveness? North Korea? South Korea and Japan? US electorate? CBO and appropriations committees? Do you have recommendations on how knowledge should be assessed on this issue? 10. Assessing Adversarial Capabilities: Iraq WMD U.S. Senate, Select Committee on Intelligence, "Report on the U.S. Intelligence Community's Prewar Assessments on Iraq: Conclusions" Overall Conclusions on Weapons of Mass Destruction," July 2004, pp 1-14. http://intelligence.senate.gov/ Arms Control Association, "Senate Intelligence Committee Report Overlooks Handling of Iraq Intelligence and UN Inspectors' Findings," July 2004. http://www.armscontrol.org/pressroom/2004/20040709_SenateIntel.asp?print Robert Jervis, “Reports, Politics and Intelligence Failures: The Case of Iraq,” Journal of Strategic Studies, February 2006 OPT Duelfer Report to the Director of Central Intelligence on Iraq's Weapons of Mass Destruction http://www.cia.gov/cia/reports/iraq_wmd_2004/ OPT Seymour Hirsch, The Stovepipe, New Yorker 2003-10-27 http://www.newyorker.com/printable/?fact/031027fa_fact OPT Greg Miller and Bob Drogin, "CIA Feels Heat On Iraq Data," LA Times 10 October 2002. OPT George J. Tenet, Press Release, 11 June 2003, http://www.cia.gov/cia/public_affairs/press_release/2003/pr07112003.html (a) As you read on the US-Iraq WMD case, please identify key technical and political knowns and unknowns and explain what evidence, assumptions and organizations came to be accepted as credible by whom and why. To what extent are organizational and bureaucratic interests reflected in pulling and hauling over intelligence estimates? To what extent could positions on threat be predicted from straightforward organizational interests? From top down ideological as distinct from bottom up bureaucratic priors? (b) Do you support creating an “Intelligence Czar?” Are competitive processes (Team A and Team B) used systematically to improve the quality of threat estimates or used selectively to delegitimate unwanted or inconvenient estimates? What are the costs and benefits of moving intelligence assessment out of conventional channels like CIA/NSA/DIA/State into White House or special DoD units less constrained by SOPS? (c) Some argue that false positives on Iraq WMD will create a bias favoring false negatives on Iran and North Korea. Substantial and irreducible uncertainty is associated with technical and political threat assessment. Step back and examine tradeoffs between Type I and Type II error with respect to threat assessment. Think through dangers that might be associated with each, and about whether power curves might be relocated through adjustments in institutional and organizational processes? (d) Does Jasanoff’s analysis fit the Iraq case? Is evidence subject to extreme deconstruction in the US threat assessment process? Does the legitimacy of security policy ultimately rest on the persuasive reconstruction of justifications in scientific, economic, ethnical and legal terms? Does her treatment of contested boundaries between science and policy apply to problems in security policy?

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11. Tradeoffs Across Information Sharing/Integration and Information Protecting/Compartmentalization: Wikileaks and NSA Snowden 2014 CRS. “The Intelligence Community and 9/11: Congressional Hearings and the Status of the Investigation,” “Wikileaks.org–An Online Reference to Foreign Intelligence Services, Insurgents or Terrorist Groups?” NGIC-2381-0617-08, 18 March 2008. pp 1-22 Peter Galison, “Removing Knowledge.” Critical Inquiry 31, August 2004, pp 229-243. Washington Post, NSA Secrets, http://www.washingtonpost.com/world/national-security/nsa-secrets/ Joel Brenner, “NSA NotSoSecretAnymore” http://joelbrenner.com/n-s-a-not-so-secret-anymore/ VetsDay http://joelbrenner.com/a-reflection-on-veterans-day-2014/ National security communities have long been attuned to the need to protect information through compartmentalization and classification. Since 9-11, intelligence agencies have been asked to focus on methods of sharing and integrating information. This unit will consider the issue of protecting and sharing information in security affairs, then turn to the multiple implications of the wikileaks case, and conclude with discussion of the general issue of the political implications of classification. (a) The CRS report provides a concise summary of studies of intelligence issues associated with 9/11. Evaluate the finding that problems were the result of failures in information sharing across the FBI, CIA and intelligence agencies and the recommendations to improve information sharing. In what specific ways could information sharing across and within agencies be improved? What tradeoffs across information security and information sharing can you anticipate? What sources of resistance to sharing would you anticipate? (b) Read the one page cover memo by Wikileaks and the classified report on Wikileaks.org produced by the Army Counterintelligence Center as part of a debate over the costs and benefits of forced draft declassification. How great is the damage? How substantial the benefit? What effect will the leaks have on interventions in Iraq and Afghanistan? What effect will the leaks have on information sharing within US intelligence services? (c) Peter Galison’s essay “Removing Knowledge” describes the extent of classification and concludes “ … secrecy, measured in the staggering units of Libraries of Congress, is a threat to democracy. And that is not a problem to be resolved by an automated Original Classifier or declassifier. It is political at every scale, from attempts to excise a single critical idea to the vain efforts to remove whole domains of knowledge.” Is there a general problem with excessive classification? Who should resolve that problem? How? (d) The Washington Post website provides a sampling of recent disclosures on NSA activities and Joel Brenner provides commentary on the accuracy and significance of reporting on disclosures. What major policy issues should be the focus of class discussion on Monday 24 November? What additional research do you wish to do to prepare for this class? 12. Proactive Design, Testing and Demonstration to Manage Security and Safety Risks MIT PoET Proposal to NSF DRMS, “Design and Demonstration of Emerging Technologies for Safety, Security and Sustainability,” January 2009. Systems engineers are now working on the proactive design of the nuclear fuel cycle for proliferation resistance, of biological parts, chassis and systems to reduce security and safety risks and of internet protocols and standards to improve tradeoffs across privacy, security and authenticity. These cases represent examples of efforts to engage with security and safety risks without waiting for catastrophic failure. The common knowledge assessment issue centers on how to test and demonstrate the performance of systems without waiting for the clarification of awful reality tests. Reflect on technical and political aspects of the creation of credible tests and demonstrations of systems performance. (a) Through what processes should tests be developed? (b) What technical and political properties should testing and demonstration systems exhibit? (c) How should the results of testing and demonstration be fed back into technical design systems and political regulatory systems to improve safety and security? 13. Dual Use Research of Concern: H5N1, Gene Drives Life Science DURC Clippings - H5N1: Fouchier (Science 2012), Wade-Hobson (Nature 2013); Gene Drives: Oye/Esvelt; Gurwitz and Oye letters (Science 2014) US DURC Policy September 24, 2014 (a) H5N1: evaluate Fouchier and Wade-Hobson? How were decisions made? By whom and how should decisions be made? (b) Gene drives: should gene drives fall under DURC? Should research on gene drives be classified? (c) DURC: In September 2014, the US released a final DURC policy and NSABB halted funding of gain of function research. On November 25, 2014, NSABB will hold a conference call (11-1) on gain-of-function research policy. Please a 3 minute remark for the public comment period. 1-888-469-1981, code NSABB

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GENERATING KNOWLEDGE – EDUCATION, RESEARCH AND INNOVATION Gerald Holton and Gerhard Sonnert, “A Vision of Jeffersonian Science,” Issues in Science and Technology, Fall 1999. Issues in Science & Technology, Innovation Issue, Spring 2010, Finneran Intro, Farrell US, Cunningham EU, Poh Singapore, Bezende Brazil. Charles Wolf et al, China and India, 2025, Summary pp xiii-xix and Ch 4, Science and Technology, pp 55-78. RAND 2011. Norman Metzger, “Pork Barrel Science,” Issues in Science and Technology, Fall 1999. Doug Lederman, “The Academic Pork Barrel, 2010,” Inside Higher Ed, April 29, 2010. Martin Rees, Our Final Hour, Ch 6, “On Slowing Science Down” 1. Conventional wisdom holds that research policy faces a tradeoff across Newtonian basic research and Baconian useful applied research. Holton/Sonnert suggest that Jeffersonian research – basic research serving useful ends – combines the best of both. Are they clear in specifying conditions under which tradeoffs across these values may be acute? Where conflicts do exist, how should tradeoffs be managed? Note: In Pasteur’s Quadrant, Donald Stokes offered a similar typology of basic research (Bohr), applied research (Edison) and use inspired basic research (Pasteur). 2. Private firms are generally assumed to focus on economic returns, narrowly defined, in funding research and education. Yet research and education can provide external benefits, not limited to the investor. Consider possible under-provision of research and education and public policies to offset market failure. a. Under what conditions will private firms invest in applied R&D? In basic research? Consider both the time private actors need to recapture research investments and their capacity to limit diffusion of benefits to others. In what technologies with what degree of industrial concentration will private firms invest in basic research? b. Do investors assuming equity positions in new enterprises and lenders to new enterprises face different information asymmetries and adverse selection problems? Do disclosure and reporting requirements work as well for high technology investments as for conventional offerings? c. Consider private incentives to invest in training of researchers who are free to move from firm to firm. Discuss the merits of public subsidization of training of researchers through educational programs and publicly subsidized national labs 3.The Issues in Science & Technology symposium and RAND chapter trat innovation in AICs and BRICs. a. Compare and contrast the S&T strategies of advanced industrial economies including the US, EU and Singapore with those of emerging economies including Brazil, China and India. Do you expect high rates of innovation for emerging market nations to continue or to slow as the gap between emerging markets and advanced industrial economies closes? What S&T strategies of emerging nations are both effective and sustainable? b. What measures should the US consider to raise levels of R & D? Do you favor public funding of basic research, fiscal incentives to raise levels of private research spending, or adjustments in IPR to sharpen incentives for private research spending? What are merits and demerits of government involvement in shifting research toward priority areas as distinct from raising levels of all research and development? c. Does globalization of research, including international mergers of firms and collaborative research relationships, render a narrowly national perspective irrelevant? 4. Metzger and Lederman examine pork barrel resource allocation in S&T research and education. a. Legislators exchange votes for projects in other districts to secure votes for projects in their districts. Economists typically argue exchange enhances welfare. Does the free exchange of votes increase or decrease welfare? Why? b. Join the debate over characterization of outcomes as porky or prudent, taking account of learning effects and other barriers to entry that we discussed under strategic trade. For what sectors do you buy a research/defense industrial base justification? How far would you go? 5. Rees raises concerns over research that may result in the generation and diffusion of dangerous knowledge, and proposes slowing down research and limiting access to findings. Are his recommendations desirable? Feasible? Who should decide using what criteria? With benefit of hindsight, are there areas of basic or applied research should not have received public support? That should be prohibited even if privately funded? SOME OPTIONAL WORKS REFERENCED IN LECTURES Donald Stokes, Pasteur’s Quadrant: Basic Science and Technological Innovation, Brookings 1997. Lewis Branscomb, “The False Dichotomy: Scientific Creativity and Utility,” Issues in Science and Technology, Fall 1999. National Academy of Sciences, “Rising Above the Gathering Storm Revisited” Summary, October 2010. EU Emerging Science and Technology Priorities in Public Research Policies in EU, US and Japan, March 2006, pp 13-24 and 25-35. Richard Atkinson and Patricia Pelfry, Science and the Entrepreneurical University, Issues in Sci Tech, Summer 2010. Michael McGeary & Philip Smith, "The R&D Portfolio: A Concept for Allocating Science and Technology Funds," Science 29 Nov 1996. McCain on Pork, http://mccain.senate.gov/public/index.cfm?FuseAction=Issues.View&Issue_id=d1a878d9-f16c-4570-b402-9d1bc3fe6ab9 NSF Science and Engineering Indicators 2000, Vol 1. Ch 7, p 18. Robert Carpenter & Bruce Petersen. “Imperfect Capital Markets, High-Tech Investment, and New Equity Financing,” Econ Journal, Feb 2002. NSF Science and Engineering Indicators 2012, Vol 1. Overview.

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EVALUATING AND IMPROVING POLICY – SETTING PERFORMANCE CRITERIA, IMPROVING ANTICIPATION, FOSTERING ADAPTATION David Reiner, Getting from Here to Where? Causal Reasoning and Goal Setting in the Policy Process,” Ch 1 pp 1-29. Beat Habegger, “Strategic Foresight: Anticipation and Capacity to Act” CSS Analyses # 59, April 2009, pp 1-3. Lawrence McCray et al, “Planned Adaptation in Risk Regulation,” Tech Forecasting & Social Change, Vol 77, Issue 6, July 2010, pp 951-959. Robin Kundis Craig and J.B. Ruhl, “Designing Administrative Law for Adaptive Management” Vanderbilt Law Review, V67, #1 Jan 2014, pp. 1-62. Katherine Martin, Arthur Petersen “Anticipation and Adaptation in Particulate Matter Policy” Oct 2006, “Summary” pp 1-10. (OPT pp 11-73) REV Hans-Georg Eichler et al, “Adaptive Licensing,” Clinical Pharmacology and Therapeutics, March 2012. (from unit on risk shielding). OPT Hans-Georg Eichler, Balancing Early Market Access to New Drugs wi Need for Benefit/Risk Data” Nat Rev Drug Discovery 7, 818-826 (Oct 2008). OPT Ann Kinzig and David Starrett, “Coping With Uncertainty: Call for New Science-Policy Forum,” Beijer Institute Forum, 2002. pp 1-15. OPT James Foster, “The Deadhand of Environmental Regulation,” MIT Center for Environmental Initiatives 1999, pp 1-10. OPT Lawrence McCray and Kenneth A. Oye, “Anticipation and Adaptation: Learning from Policy Experience,” Oct 2006. pp 1-35. (OPT pp 35-55). OPT Brian Zuckerman, “Adaptation Cases: Food Safety and Banking.” introduction pp 1-29. OPT Institute of Medicine, The Future of Drug Safety 2006, “Summary” pp S1-S11. (note: pp 26-36 of pdf). OPT pp 37-269 of pdf) 1. David Reiner differentiates among three types of goals or performance indicators for assessing the effectiveness of policy – behavioral, intervening and consummatory indicators. Provide examples of each of these classes of indicators from daily life, from private business, and from public policy. Although you will want to consider examples from earlier parts of the semester, you need not limit yourself to examples from this course. Be prepared to discuss the pros and cons of each of these classes. For what purposes is each useful? For what purposes is each worthless? 2. Beat Habegger provides a 3 page overview of the need for strategic foresight, some methods to improve anticipation, and some problems associated with acting on foresight. To what extent is credible anticipation viable under conditions of uncertainty, complexity and controversy? Please reflect on this question in light of our last unit on evaluating knowledge. In what areas of public policy will credible anticipation most and least likely? Why? 3. McCray et al favor planned adaptation in situations where foresight is expected to fail. But their preliminary survey of US EHS cases suggests that even when adaptation is required, it is uncommon. Is there a realistic prospect for improving adaptive capacity in domestic and international applications? Under what conditions would it be possible to assemble a coalition supporting planned adaptation? What are the merits and demerits of moving toward consummatory performance indicators? Are the benefits of increased adaptive capacity offset by potential problems with assigning responsibility or other difficulties? 4. In their Vanderbilt Law Review piece, Kundis and Ruhl discuss the theory of adaptive management and then: a. specify conditions where adaptive management is appropriate . . .and inappropriate; b. argue that public participation, judicial oversight and provisions for finality impede adaptive management; c. suggest reforms to make adaptive management work. Evaluate their positions on conditions, impeding factors and reforms, with attention to cases considered in this class and other readings in this unit. OPT: Kinzig and Starrett recommend educational and institutional reforms to maintain flexibility, improve reassessment, and change direction as needed. Do you accept their basis for arguing the need for decisionmaker and mass re-education? What reforms do they support? How does their approach differ from the administrative law approach of Kundis and Ruhl? OPT: Borrowing from James Q. Wilson’s classic essay on the “deadhand” of regulation, Foster discusses the strong tendency of policy systems to lock in to place, even as indicators may point to failure and additional information may suggest ways of improving policy. Can you identify clear examples of lock in from our earlier units in the course? What are the principle sources of tendencies toward stasis in policy? Are Foster’s sources of inertia treated by Kundis and Ruhl? 5. Consider articles that look back at sources of policy rigidity and look ahead at methods of improving adaptive capacity in US and EU PM policy and pharmaceuticals. a. PM: Martin and Petersen offer a comparative case on anticipation and adaptation in particulates policy, with materials on the US, Netherlands and EU. (1) How is the boundary between risk analysis and risk management handled in their cases? Which interested and affected groups weighed in on the policy choices to be made? Were their preferences material to the outcome? (2) Standards looked more demanding in the US, with the 9-year lag in EU. Why? Do actual exposure/risk differ in the US and EU? (3) Can we spell out the sense in which the EU has "more regulatory freedom in their dealings with scientific evidence?" (4) Why the asymmetry in the use of independent knowledge assessment? In the US, the NAS, CASAC, and HEI played a role. In EU, only the WHO statement. Why? (5) Is planned adaptation only found in setting ambient PM standards? Why? b. Drugs: Eichler et al lay out a strategy of adaptive licensing for drugs, with a focus on providing earlier access to drugs, on limiting initial risks, on obtaining updated information on risks and effects, and on using updated information to modify or retract terms of authorization. Evaluate the benefits, costs and feasibility of planned adaptation. Specifically, what impediments to adoption can you anticipate? b. OPT Food and Banking: Brian Zuckerman discusses the tendency of policy systems to lock in to place, by contrasting food safety and banking cases. What are the principle sources of tendencies toward stasis in policy in food and banking? What was the role of crisis in breaking lockin? How was stasis partially overcome? 6. Looking back over the semester, what were our best significant examples of successful adaptation in the presence of significant uncertainty? By contrast, what are significant examples of mal-adaptation and unresponsiveness to emerging information? In what ways could policymakers improve capacity for information acquisition and policy adaptation.