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Canadian Public Policy Corruption, Character, &Conflict: Essays on Canadian Government Ethics by John W. Langford; Allan Tupper Review by: Kenneth M. Gibbons Canadian Public Policy / Analyse de Politiques, Vol. 21, No. 4 (Dec., 1995), pp. 488-489 Published by: University of Toronto Press on behalf of Canadian Public Policy Stable URL: http://www.jstor.org/stable/3551362 . Accessed: 16/06/2014 01:05 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. . University of Toronto Press and Canadian Public Policy are collaborating with JSTOR to digitize, preserve and extend access to Canadian Public Policy / Analyse de Politiques. http://www.jstor.org This content downloaded from 91.229.248.187 on Mon, 16 Jun 2014 01:05:35 AM All use subject to JSTOR Terms and Conditions

Corruption, Character, & Conflict: Essays on Canadian Government Ethicsby John W. Langford; Allan Tupper

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Canadian Public Policy

Corruption, Character, &Conflict: Essays on Canadian Government Ethics by John W.Langford; Allan TupperReview by: Kenneth M. GibbonsCanadian Public Policy / Analyse de Politiques, Vol. 21, No. 4 (Dec., 1995), pp. 488-489Published by: University of Toronto Press on behalf of Canadian Public PolicyStable URL: http://www.jstor.org/stable/3551362 .

Accessed: 16/06/2014 01:05

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

University of Toronto Press and Canadian Public Policy are collaborating with JSTOR to digitize, preserveand extend access to Canadian Public Policy / Analyse de Politiques.

http://www.jstor.org

This content downloaded from 91.229.248.187 on Mon, 16 Jun 2014 01:05:35 AMAll use subject to JSTOR Terms and Conditions

detailed could be better understood as in large part a product of the department's closed system perspective and its failure to adopt a continuous improvement approach sensitive to the complexity of ecosystem and human interdependencies.

Doern and Conway argue that Canada has sometimes sought to outscience the United States. When this happens, how different are the questions posed by scien- tists in the two countries? Does action-forc- ing US legislation limit the questions the Americans address?

The absence of proposals addressing how environmental institutions and decisions could be improved is disappointing. If an ecosystem perspective is to prevail within DOE, what programs should be included in its mandate? What linkages to other minis- tries can improve environmental respon- siveness on the part of other federal minis- tries? What public participation processes and consultation processes are most useful for increasing decisional sensitivity to en- vironmental impacts? How can the funding for impact studies be increased and their use in evaluation be improved?

Although the book details recurring un- willingness of ministers to provide authori- zation to act on environmental issues, no ef- fort is made to use the case studies to de- fine the changes in institutions and deci- sions which could increase the federal government's sensitivity to the ecological and biophysical impacts of government ac- tion. DOE's inability to build coalitions with strong client-based constituencies, such as fisheries and parks, is well-docu- mented, yet the changes in institutions and decisional processes needed to green Canada are not explored.

ELLEN BAAR, Division of Social Science, York University

Corruption, Character, & Conflict: Essays on Canadian Government Ethics edited by John W. Langford and Allan Tup-

per. Don Mills, Oxford University Press, 1994. Pp.vi,234. $22.95.

Surely, when reviewing a book on ethics, one should be forthright. Thus, let it be stated at the outset that this is an interest- ing, important and useful book. These three adjectives constitute the main con- cerns that, in my view, any book review should address. The topic of the book is cur- rent and of ongoing concern. It is intrigu- ing in its complexity and in the way in which the topic intertwines with broader public policy considerations. Finally, it is useful in that it deals with issues which are both theoretical and practical, and does so in a way that should be well received by stu- dents and practitioners of public policy.

This book of readings consists of articles written specifically for the volume. This permits a certain unity of theme and pur- pose that is often less obvious in antholo- gies of previously published materials. As such, the articles work well together, though a minor point should be made that the logic behind the ordering of chapters is not as clear as it should be.

On the content side, the editors deserve kudos for their effort. The articles are uni- formly strong in terms of conceptualiza- tion, writing and documentation. Unfor- tunately, in a short review, one cannot cite each chapter, but some specific points can be made.

The articles are generally quite good at confronting the need for balance in the ap- plication of ethical standards, though this occasionally leads to oversensitivity to the business world's claim that stringent rules will force 'good' people to avoid public of- fice. This is never demonstrated, nor is there enough attention given to the com- peting claim that we can do without such 'good' people, if they cannot order their fi- nancial affairs properly. This is especially evident in the otherwise excellent chapters by Langford and Tupper (together and in- dividually).

A second conceptual concern is that many of the articles acknowledge, at least

488 Reviews/Comptes rendus

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in passing, the argument that a focus on ethics can sometimes trivialize public policy. Clearly, this is true to some extent, but it should be more clearly argued that even apparently trivial ethical issues have much more substantial implications for public perceptions of power and legitimacy, and that these perceptions are potentially of great consequence in the overall scheme of things. Perhaps this is a mere quibble on my part, as the authors do generally address this point, though (with exception of Sutherland) not as forcefully as they might.

These small objections aside, there isn't a single chapter that I do not already rec- ommend to my graduate students, who are a combination of full-time students and current public servants. The coverage of the material is noteworthy in its chapters on the federal government and several pro- vinces (BC, Quebec, Alberta, Ontario and Nova Scotia), though one might have pre- ferred that all ten provinces were included. Three chapters of special note are those that deal with First Nations, large cities and the often ignored small cities. Their in- clusion speaks well of the editors' vision.

In the final analysis, practising policy- makers and administrators, policy faculty and graduate (or advanced undergraduate) students in politics, policy and administra- tion should all benefit from this excellent volume. It is highly recommended both as general reading and as a classroom text.

KENNETH M. GIBBONS, Department of Political Science, University of Winnipeg

Ensuring Failure: Financial System Stability and Deposit Insurance in Canada by J.L. Carr, G.F. Mathewson and N.C. Quigley. Observation 36. Toronto, C.D. Howe Institute, 1994. Pp.xi,110. $12.95.

Explanations for the endogenous emer- gence of federal deposit insurance in the Canadian economy, traditionally noted for

an unusual degree of stability in its bank- ing system, have long been a topic of some fascination for financial economists and economic historians. Recent distress from numerous costly failures of financial inter- mediaries in the United States, and an in- crease in the frequency of similar insol- vencies in Canada over the last two decades, makes the relative efficiency of Canadian deposit insurance a pressing topic for policy-makers as well.

Advances over the last several years in game theory and the economics of informa- tion have led to a more precise articulation of the role of information and incentives in financial market failure and, consequently, to a more rigorous economic basis for regu- latory policy in financial markets (see Chant, 1987; Bodie and Merton, 1995). Combining an application of these prin- ciples with a rich historical study of Canadian banking, this book offers a timely argument that the introduction of deposit insurance in Canada was undertaken pri- marily for political reasons, rather than to enhance economic efficiency. The creation of the CDIC in 1967 and its provision of full insurance to small depositors, more specifi- cally, provided a subsidy to entry by re- gional intermediaries, by nature more nar- rowly diversified, as well as a subsidy to those incumbent intermediaries able to ex- ploit the insurance contract by increasing the riskiness of their loan portfolios. Such a subsidy came at the expense of incumbent chartered banks, which, it is argued, tended to be more broadly diversified and more conservatively managed. Adverse incen- tives created by such deposit insurance, as a consequence, exacerbated existing ineffi- ciencies and reduced the stability of the Canadian banking system. This explana- tion for the appearance of deposit insurance in Canada contrasts with its potential role in mitigating the external effects of asym- metric information about bank solvency. Government loan guarantees, in this con- text, preclude runs on solvent but illiquid banks by uninformed depositors who infer the solvency of their banks from an obser-

Reviews/Comptes rendus 489

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