300 Reviews/Comptes rendus
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BOOKS REVIEWED
Maureen Baker Canadian Family Policies: CrossNational Comparisons reviewed by John B. Bond,
Jr. 306
Arnold Birenbaum Putting Health Care on the
National Agenda reviewed by Gail J. Donner 306
Paul Boothe The Growth of Government Spending
in Alberta reviewed by John C. Strick 307
Martin D. Dooley, Ross Finnie, Shelley A. Phipps
and Nancy Naylor Family Matters: New Policies
for Divorce, Lone Mothers, and Child Poverty reviewed by G.N. Ramu 308
Masao Nakamura and Ilan Vertinsky Japanese
Economic Policies and Growth: Implications for
Business in Canada and North America reviewed
by William J. Milne 301
Lars Osberg, Fred Wein and Jan Grude Vanishing Jobs: Canada’s Changing Workplaces reviewed
by Andrew Sharpe 302
Filip Palda (ed.) Essays in Canadian Surface Transportation reviewed by Konrad W. StudnickiGizbert 303
Michael J. Trebilcock and Daniel Schwanen (eds.)
Getting There: An Assessment of the Agreement on
Internal Trade reviewed by Brian R. Copeland 305
CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES,
VOL . XXII, NO . 3 1996
Reviews/Comptes rendus
301
Japanese Economic Policies and Growth:
Implications for Business in Canada and North
America
by Masao Nakamura and Ilan Vertinsky. Edmonton:
The University of Alberta Press, 1994. Pp. xxiv, 220.
$22.95.
tems, and enterprise unionism. Another industrial
practice is the role of corporate groups (Keiretsu)
in shaping the Japanese industrial structure. The two
different kinds of Keiretsu — the production-based
groups and the bank-based groups — provide different forms of industrial stability.
This book provides an informative description of the
Japanese economy, their industrial organization, and
their government economic policies. The book is
divided into sections: the first dealing with the broad
issues of economic growth in Japan and the second
examining economic relationships between Canada
and Japan.
One point stressed by Nakamura and Vertinsky
is the difference between size and influence of the
governments of Japan and Canada. They describe
the Japanese government as being small; that is, their
financial expenditure is small relative to North
American governments. Despite being a “small”
government or, as the authors suggest, because of it
the government tends to exhibit more influence over
the economy. Japan’s Ministry of International Trade
and Industry (MITI) plays at picking “winners.”
According to Nakamura and Vertinsky, MITI has
been very successful with this policy at the industrial level, but not as successful at the firm level.
The first section of this book is an analysis of
Japanese economic growth. Starting with a history
of the macroeconomic perspective, this section includes chapters on industrial relations, government
industrial and technology policies, foreign trade, and
direct investment. There is a great deal of information in this section that should be of use to researchers interested in an overview of Japanese macroeconomic and industrial policy since the 1960s.
The macroeconomic perspective provides historical data along with projections by the Japanese Ministry of Labour. Interestingly, the demographic structure of Japan is likely to play a large role in the future since their population structure is older than in
Canada or the US. As a consequence of these
demographics, instead of businesses offering early
retirement packages, the likely future in Japan is
long-term labour shortages and, therefore, serious
consideration is being given to extending the retirement age. The authors argue that Japan must accept
more women into the workforce and further develop
their secondary labour market in order to meet the
labour demands.
Nakamura and Vertinsky discuss Japanese business practices that make entry into the Japanese
market hard for foreigners. One such industrial practice is the belief in the “three sacred treasures,” —
lifetime employment, length of service-wage sys-
Throughout this section there is a wealth of statistics, tables, and figures. However, it is necessary
for the reader to examine carefully the data and the
text for consistencies. Often, the tone of the text is
different from the image the data suggest. The authors obviously favour Japanese policies, yet they
successfully present both the benefits and the flaws
of the Japanese approach.
The second section is where the implications for
Canadian businesses of the Japanese system are examined. Much of the information from the previous
section is repeated in an attempt to present it in a
light that would make it more accessible to Canadians. At the end of chapter six the lessons for Canada,
from the Japanese experience, are outlined — preceded by the regular warning about the dangers of
using policies that are successful in one country at
one point in time in another country at another point
in time.
Chapter seven is a long review of what Canada
exports to and imports from Japan, their importance
to Japan, their importance to Canada and, in some
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cases, Canada’s competitors for the Japanese market are identified. The authors argue that Canada
needs to move away from resource-based exports
toward high value-added exports. They suggest the
use of Japanese trading houses to improve the information link with buyers on desirable attributes
of products. The authors suggest that Canada should
increase the value-added content of its natural resources, through additional processing, before they
are exported. This follows since, with the projected
shortage of labour in Japan, combined with their
focus on high value-added processing, means that
Japan will need their natural resource inputs to be
more highly processed.
Although the book begins with a discussion of
different growth theories, the authors never try to
use these theories to explain economic growth in
Japan. Instead, the authors lay out the factors that
have contributed to growth in the Japanese economy,
but leave the link between theory and outcome to
the reader. This is a pity, since explaining this link
could have significantly strengthened the book. Furthermore, the book’s subtitle, Implications for Businesses in Canada and North America, implies that
there are some implications for businesses in Canada
that can be deduced. However, the authors draw
more implications for the Canadian government than
for Canadian businesses.
For anyone interested in the Japanese economy,
the first section of this book is recommended, both
for its readability and for its content. The second
section is geared toward those interested in a more
detailed look at the interaction between the Japanese economy and the Canadian market.
WILLIAM J. MILNE, Department of Economics, University of New Brunswick
CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES,
Vanishing Jobs: Canada’s Changing
Workplaces
by Lars Osberg, Fred Wein and Jan Grude. Toronto:
James Lorimer and Company, 1995. Pp. Xvi, 223.
$19.95.
Vanishing Jobs: Canada’s Changing Workplaces is
based on case studies of 25 firms and organizations
in the resource, manufacturing, low-wage service,
information services, and public sectors in Nova
Scotia conducted over the 1990-93 period. It provides fascinating insights into the operation of these
firms, giving a multifaceted portrayal of today’s labour market. Indeed, I cannot think of a book I have
read in the past decade that has increased my “real
world” understanding of the Canadian labour market as much as this book.
Firm behaviour is interpreted within an interdependent four-cornered framework. In terms of market demand, firms pursue either low-cost or highquality strategies. In terms of the technology of production, firms make choices regarding the “soft”
technology of organization design and individual
motivation and the “hard” technology of capital
equipment and training and cognitive skills.
The book stresses the importance of both the demand side (the availability of jobs) and supply side
(education and training) for a healthy labour market. A key theme is the pervasive negative impact
of restrictive macroeconomic policy on the labour
market in the 1990s, going well beyond the obvious
effect of increasing the number of unemployed. High
unemployment reduces the incentive for employers
to train their employees given the ready supply of
skilled labour. It also heightens worker concern over
job security, making workplace change more difficult to implement. Finally, high unemployment disproportionately hurts the disadvantaged. Employers can hire better qualified individuals at each skill
level, bumping the poorly educated out of the
running.
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The book is peppered with interesting observations arising from the case studies. The authors find
that employers almost never mentioned UI as an issue in their labour market problems; that the ability
of small employers to design and mount training
programs for their employees constitutes an important externality, which calls for collective action at
the sectoral level; that the primary/secondary labour
market distinction between sectors observed in the
1970s has been replaced by a core/contingent worker
dichotomy within firms; that high school retention
rates have risen dramatically because of the decline
in unskilled jobs; that the FTA has had limited effect on employment; and that realizing the potential of new technologies and market opportunities
requires substantial organizational change and new
motivational strategies.
I have a number of minor criticisms. First, the
authors are inconsistent in their classification of
resource-based manufacturing industries. A sawmill
and fish plant are included in their chapter on the
resource sector, but a pulp and paper mill is included
in the chapter on the manufacturing sector. In terms
of the standard industrial classification, all three
activities are considered manufacturing industries.
Second, the title of the book, Vanishing Jobs, is
misleading, suggesting the collapse of work or the
inevitability of mass unemployment. Of course,
many jobs disappeared in Nova Scotia in the 1990s,
but many were created. The overall level of employment was unchanged between 1989 and 1995.
Third, the book’s emphasis on the macroeconomic
environment may at times be stretched too far. For
example, the authors state that more expansionary
monetary policy could reverse the trend toward
greater labour market insecurity. Since this insecurity arises largely from rapid technological change
and increased market volatility, it seems unlikely
that monetary policy could reverse (as opposed to
attenuate) the impact of such fundamental forces.
303
This book represents a very important contribution to the empirical literature on the Canadian labour market. I highly recommend it be put on the
reading lists, or adopted as a supplementary text, in
principles and labour economics courses.
A NDREW SHARPE , Centre for the Study of Living
Standards, Ottawa, Ontario.
Essays in Canadian Surface Transportation
edited by Filip Palda. Vancouver: The Fraser Institute, 1995. Pp. xix, 178.
Seeing the imprint of the Fraser Institute, the initial
reaction of different groups of readers is predictable: those who share the Institute’s ideology will
turn to it with enthusiasm, those who find it unacceptable will avoid it. There may be, however, the
third group of readers, who, realizing the book’s
ideological bias, are interested in its “net valueadded” to the knowledge of transport policies.
As usual in a collection of essays, the quality of
papers included in the present volume is very uneven and, with the exception of the contribution by
Richard M. Soberman, contains a very predictable
bias. This bias is well articulated in the preface,
written in a journalistic style and containing all the
assertions and arguments one would expect from the
sponsoring institute.
The first essay, by David Gillen and Douglas
Cooper, deals with “Public versus Private Ownership and Operation of Airports and Seaports in
Canada.” The first part of the essay contains a short
review of the Canadian situation and attempts to
produce a framework of evaluation. It notes, in passing, a reference to the Vickers and Yarrow report
that “the evidence does not clearly establish the
clear-cut superiority of private ownership with respect to cost efficiency,” but asserts that the competitive forces must produce a higher efficiency. The
efficiency criteria are stated — inaccurately — as
CANADIAN PUBLIC POLICY – ANALYSE DE P OLITIQUES,
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follows: (i) [static optimum efficiency] “price of the
output reflects the marginal cost of production”
(p. 21), and (ii) [dynamic efficiency] “a firm has
achieved dynamic efficiency if it is operating with
no excess capacity, or with as little excess capacity
as the technology allows” (p. 22). A correct statement of “static optimum” would include “externalities” and absence of the “second-best” conditions
— both important in the analysis of transport problems. Later on, when the authors deal with the externalities, network effects, land-side development)
the treatment is imprecise and rather misleading.
Correct formulation of dynamic efficiency criteria
should be stated in terms of minimization of both
“shortage” and “excess capacity” costs; with “shortage costs” including also social costs of inadequate
capacity. The authors argue that investment programs would be more rational under private ownership, citing the example of Mirabel. One could give
opposite examples equally easily (Canary Wharf,
shortage of “public space” at London airports, displaced by commercial concessions, etc.), with equal
relevance, or irrelevance. A selective use of examples supporting a theory or generalization without
mentioning and explaining contrary cases is questionable; yet this is precisely the approach followed
in this essay.
The bulk of the essay contains a highly selective
review of evidence in favour of privatization. The
argument is unfocused; at times it deals with privatization of major facilities, at times with contracting some of the services, at times with management
issues. In all cases, privatization and competitive
solutions are held to be superior, but the reader is
left without guidance as to the feasibility of a competitive solution in a particular case. The essay contains many assertions about the nature of airports
and ports which are clearly wrong (e.g., that “since
airports cannot affect the revenues over the long
term, they must focus on costs as means to increase
profits” [p. 35] — yet, a more aggressive search for
revenue increase is one of the most persuasive arguments for privatization!).
CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES,
The essay fails to deal with a problem of control
of monopoly in a satisfactory manner. The authors
state that privatization should not lead to the substitution of a private for public monopoly, but, considering the nature of ports and airports, this is a
questionable statement. In the case of major infrastructure facilities, the control of monopoly or
oligopoly after privatization has proved to be a major problem (as proved by the United Kingdom experience), thus lack of an adequate treatment of this
issue should be considered as one of the major weaknesses of this essay. It is likely that the process of
privatization will continue for, at least, some time.
Thus the absence of a good analysis of the issues
involved is regrettable.
The second essay is by Norman Bonsor on “Competition, Regulation and Efficiency in the Canadian
Railway and Highway Industries.” It is a wellwritten, although hardly an original, review of the
subject even though many of the author’s historical
interpretations and policy recommendations are
questionable.
Richard M. Soberman’s essay of high speed railway transport is a clear, useful review of the issues
and a delight to read. Since Soberman makes many
references to the French high speed trains (TGV), it
might be useful to note that the TGV system served
multiple objectives, including redevelopment of city
centres of Lyon and Lille. Of course, the considerations that led to the development of the TGV system are not applicable in the Canadian context, but,
indirectly, they throw some interesting light on the
planning of national infrastructure.
Wendell Cox and Jean Love contributed an essay
“How the Competitive Market Can Make Canadian
Transit Efficient and Effective.” The essay is a highly
critical review of the traditionally adopted Canadian
urban transport policies. Significantly, the authors
do not consider the link between urban transport and
urban development. As advocates of competitive
transit solutions, the authors may have considered
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the most extensive and well-documented evidence
of different solutions applied in Latin America —
they did not. References to international experience
are superficial and virtually restricted to the United
States. It is easy to argue that Canadian urban transport policies have been expensive and unsatisfactory, but the causes of their failures are quite complex and require a disciplined investigation and
analysis — including analysis of the interrelationships between urban development and transit —
which are absent in this essay.
To sum up: the reviewed book, with the exception of Soberman’s essay, cannot be considered to
be an important addition to the transport library, although the bibliographies attached to the collected
papers are of some value.
KONRAD W. STUDNICKI-GIZBERT, Chelsea, Quebec
Getting There: An Assessment of the
Agreement on Internal Trade
edited by Michael J. Trebilcock and Daniel
Schwanen. Toronto: C.D. Howe Institute, 1995.
Pp. vii, 226. $14.95.
This collection of essays gives an overview and assessment of the Agreement on Internal Trade, which
was signed by the Canadian federal and provincial
governments in 1994. The purpose of the agreement
is to reduce barriers to trade and factor mobility
between the provinces. It deals with issues such as
preferential procurement in the public sector, occupational licensing, and differences across provinces
in regulations and standards that can add to the costs
of trade.
Most of the contributors to the volume have a
background in law, and the strength of the book is
in its analysis of the ways in which the agreement
will constrain provincial governments. Michael
Trebilcock and Rambod Behboodi provide a chapterby-chapter interpretive overview of the agreement.
Daniel Lenihan assesses the success of the agreement
305
in harmonizing standards and regulations. Irving
Miller and Robert Howse (in two separate papers)
explain and assess the agreement’s dispute settlement procedures, while Katherine Swinton analyzes
its enforceability. Alex Easson compares the Canadian agreement on internal trade with the procedures
used to facilitate economic integration in Europe.
A theme running through much of the volume is
that the agreement contains many loopholes (especially in the provisions for provinces to pursue regional development policies), and that its enforceability is doubtful. Indeed, Swinton argues that without a constitutional amendment, it would be very
difficult to design an agreement that would legally
bind the provinces. Nevertheless, she thinks that the
agreement may have an important impact on policy
because governments may comply with public commitments they have made, in much the same way
that countries comply with international treaties that
are not legally binding.
Perhaps the main weakness of the book is that it
does not do enough to put the agreement in perspective. There is very little discussion of why we need
such an agreement and whether the benefits exceed
the costs of setting up another layer of bureaucracy.
After all, the empirical evidence supports the common sense view that trade within Canada is already
far freer than trade between Canada and other countries. Most of the “barriers” to trade arise from differences in regulations across provinces. And in a
federal system, diversity of regulations is not necessarily a bad thing. Albert Breton, in a very interesting short comment in the book, points out that
there is a tradeoff between harmonization and diversity, and that the theoretical and empirical issues
underlying this tradeoff did not seem to play much
role in the debate surrounding the agreement. The
book would have been better if it had explored the
notion of the optimal degree of integration in more
detail, and if it had included a chapter that gave an
economic assessment of the costs and benefits of
increased harmonization and economic integration
CANADIAN PUBLIC POLICY – ANALYSE DE P OLITIQUES,
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306 Reviews/Comptes rendus
in Canada (the Trebilcock and Behboodi paper only
very briefly touches on this literature). Nevertheless, the book will be useful for those who want an
overview of the legal aspects of the agreement.
BRIAN R. COPELAND, Department of Economics, University of British Columbia
Canadian Family Policies: Cross-National
Comparisons
by Maureen Baker. Toronto: University of Toronto
Press, 1995. Pp. Xiv, 466. $25.00.
Canadian politicians, program planners, policy analysts, service providers, and academics are grappling
with the changing demographic and economic forces
within the country. At no other time in the history
of the nation have the factors that drive change been
so inextricably interwoven with actions taken in
other countries. This timely and detailed book by
Maureen Baker, Professor of Social Work at McGill
University, thoughtfully and analytically explores
the complex domain of family policy in Canada.
While the descriptions of the Canadian systems are
well presented, a significant strength of the book is
the well-documented contrast of similar issues to
seven other countries. Three are English speaking
(Australia, the United States, and the United Kingdom) and four are not (France, Germany, Sweden,
and the Netherlands); policy differences repeatedly
emerge as two patterns, which are dichotomized by
English/non-English as the national language.
The first two chapters provide the essential demographic, economic, and political background for
each of the countries, helping frame the policies
within each country. Baker categorizes family policy
into three areas: laws relating to family issues,
policies supporting family income, and direct services. Baker wisely chooses to accept each country’s
census definition of the subsequent comparative
problems that emerge, rather than eliminate all public data by developing her own common definition.
However, it is clear that Baker prefers to focus on
younger families with children (both single and dual
CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES,
parent households) rather than older couples or families without children.
Throughout the next six chapters, Baker examines policies related to poverty, child and family
allowances, parental leave, child care, child welfare
(including adoption) and family violence, and divorce and subsequent parenting issues. She admittedly uses political, rather than economic or demographic frameworks, to examine the issues. Each
chapter is structured similarly, beginning with a
detailed description of the area of concern within a
Canadian context. She then provides an overview
of the issue for each country, which is followed by
a concluding section.
It first appears unfortunate that each policy area
is presented as an independent entity. However,
given the number of comparisons that would be
needed to examine the interactions of the various
issues combined with multiple national policies,
Baker’s approach is an appropriate one.
The final chapter begins to answer the complex
question that all readers will have, “Which approaches are most effective?” Her answers will be
of interest, but of little comfort, to those who must
develop or implement family policy in their chosen
professions.
As a final note, the extensive (65 page) bibliography is a wonderful resource for individuals who
wish to read the details behind Baker’s commendable volume.
JOHN B. BOND, JR., Department of Family Studies,
University of Manitoba
Putting Health Care on the National Agenda
by Arnold Birenbaum. Westport, CT: Praeger, 1995.
Pp. Xv, 228. US$18.95.
This very readable book provides an excellent overview of the US health-care system, its history and
its potential for change. Birenbaum is Professor of
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Pediatrics at Einstein College and a health policy
analyst and critic of the American health-care system. This book is a revised version of an earlier work
and is a passionate appeal for a massive overhaul in
the US health-care system, one with “serious holes
in the safety net.” Using the trend toward regulation, monetarization, and privatization as a framework, Birenbaum traces the history of the unrestrained growth in the 1970s that led to cost-control
measures and the introduction of managed care. He
looks at current service needs, the gaps in the system and describes the failure of the market system
to provide for its citizens.
The text, easy to read, with a mix of anecdotal
and research evidence is recommended reading for
policymakers and analysts, providers, and
laypersons. For those wishing to introduce the US
system in Canada or longing to go to the United
States either to provide or receive care, the book
may be an eye opener. The discussion on managed
care, what it is and how it works, should be required
reading for all Canadians. Managed care is slowly
being introduced in Canada either in parts or as a
whole, and using vulnerable populations, the uninsured and the uninsurable. Birenbaum describes the
potentially disastrous effects on those populations
when the market rather than needs determine who
gets what. Birenbaum also describes very clearly
how managed care interferes with the physicianpatient relationship and ultimately with physician
autonomy. Medical students and practising physicians might find his analysis instructive. “Medicine
as a profession cannot be free while there is no
health-care security for the uninsured and no way
of reining in the runaway costs of care” (p. 52).
Birenbaum also provides a thorough history of hospital services in the US and the impact of beds on
both how care is provided and on costs. “There is
an oversupply of doctors and hospital beds.... Payers have become increasingly aware of the advantage they hold over providers” (p. 55).
Having provided a very compelling review of the
US system and its many casualties, Birenbaum be-
307
gins the final section of the book, “Caring for the
Future” with a chapter on the benefits of the Canadian health-care system. There are a few technical
errors (“Health and Welfare Canada, a not-for-profit
think tank,” p. 183) but generally the chapter describes the benefits of the Canadian system and provides Birenbaum with a framework for his plan for
the US system. After providing his analysis of the
failure of the Clinton health-care reform plan,
Birenbaum describes his preferred solution (which
comes as no surprise to the reader): a single payer
national health insurance system. He is clear about
the problems and stresses that will accompany this
major structural reform, but remains determined that
this is “still the right time.” While I must applaud
Birenbaum’s determination and passion, I find it
difficult to share his optimism for the future.
GAIL J. DONNER, Faculty of Nursing, University of
Toronto
The Growth of Government Spending in Alberta
by Paul Boothe. Toronto: Canadian Tax Foundation,
1995. Pp. Viii, 166.
In this monograph, Paul Boothe examines the factors that have determined the growth of government
spending in Alberta. In the process, he presents statistical information on Alberta government revenues
and expenditures from 1905 to 1990-91. The statistical tables are accompanied by a fiscal history of
the Alberta government, highlighting the forces that
helped shape the province and its government. In
addition, detailed time-consistent data have been
constructed by department and by function which
cover 25 government departments and 12 functional
areas for the period 1968-69 to 1990-91.
Boothe contends that when government spending is examined at the level of a department or a
functional area, it can be understood in terms of its
history and a combination of economic, demographic, and political factors, and taken together
these factors explain a substantial portion of government spending in Alberta.
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Boothe finds that Alberta’s fiscal history has been
shaped by three factors: a need to construct infrastructure to develop the province; the reliance of the
provincial economy, and consequently government
revenue, on primary products, including oil; and
difficult relations with the federal government, particularly in regard to natural resources. Two perceptions that found little support in the data were the
perceptions that government spending is strongly
influenced by the electoral cycle and the perception
that precedence among ministers is a significant
determinant of spending.
From his study Boothe concludes that the primary
determinant of spending by the Alberta government
was public demand for government-provided goods
and services, tempered by political variables. Government response to this demand has produced a
steady increase in government spending. The key
implication of Boothe’s finding is that spending
control must include influencing the public’s demand for government services. This requires breaking with the past trend of steady growth of government spending and encouraging public acceptance
of a lower level of government services. Boothe refers to Premier Ralph Klein’s experiment of radical
expenditure reduction, but faced with revenue constraints and budget deficits, other provincial governments along with the federal government have
also embarked on similar programs of curbing expenditures and attempting to find alternative means
for the provision of services. This has not been an
easy task and has produced protests and unrest
among various elements of society. As Boothe’s fiscal history of Alberta illustrates, in the past the government responded to economic and social problems
by becoming an ever larger presence in the construction of infrastructure and the provision of expanded
and improved services. This has been true of governments at all levels in Canada and the public has
come to expect this of government.
Boothe has provided a better understanding of
the forces that shaped Alberta government expenditures and a methodology for research on government
CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES,
spending. The implication of his findings for spending control would appear to apply to all governments
in Canada that are attempting to change their expenditure behaviour.
JOHN C. STRICK, Department of Economics, University of Windsor
Family Matters: New Policies for Divorce, Lone
Mothers, and Child Poverty
by Martin D. Dooley, Ross Finnie, Shelley A. Phipps
and Nancy Naylor. Toronto: C.D. Howe Institute,
1995. Pp. Vii, 290. $16.95.
Family Matters, the eighth report in the C.D. Howe
Institute’s The Social Policy Challenge series, deals
with such difficult issues as single mothers and divorce and child poverty in Canada, which many believe not only destabilize families, but also put an
enormous burden on the financial resources of society. To their credit, the four economists who are
the main contributors to this work have treated these
matters in a rigorous way, even though they differ
in their ideological and analytical approaches.
William Watson provides a cogent introduction to
these essays and Douglas Allen critiques them in
the concluding chapter.
In an informative discussion, Martin Dooley uses
data from Statistics Canada’s Annual Survey of Consumer Finances for the periods of 1973-75, 197982, and 1990-91 to contradict many stereotypes
about single mothers in Canada. He shows, for example, that they are not a homogeneous group: they
differ in age, income, number of children, as well
as the extent of their dependence on social assistance. Moreover, the percentage of lone mothers dependent upon welfare has not increased. In fact, the
fraction of older women (i.e., those over 35 years)
on social assistance has declined slightly in the last
20 years. Only about 25 percent of those who are
on social assistance are single mothers. Nevertheless, about 40 percent of single mothers under the
age of 35 years are on welfare because of the tight
labour market, social assistance policies, and
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personal circumstances (e.g., number of children,
marketable skills).
In Dooley’s view, strategies such as financial incentives to get single mothers off welfare rolls or
assistance to improve employment opportunities
(training, daycare, etc.), or measures such as mandatory employment will not work in the long run.
He recommends an increase in child support payments, but without any empirical evidence or consideration of the impact such a policy would have
on men (especially those who remarry and have new
family obligations). Dooley has not dealt with this
matter in a systematic fashion.
Ever since Lenore Weitzman’s study of the economic consequences of divorce for women in California was published (The Divorce Revolution,
1985), there have been numerous other investigations of this topic, but few in Canada. Ross Finnie’s
piece, “Economics of Divorce,” fills this gap. Using data from the Longitudinal Administrative Database for the years 1982 to 1986, Finnie concludes
that women do very poorly after divorce and that
men, after initial losses, are better off over the years.
In addition to decreased income, women suffer a
decrease in “economic well-being” which is calculated on the basis of income-to-needs ratio (p. 121).
For instance, the economic well-being for men improves by 6 percent in the first year. By contrast,
economic well-being for women in the first year
declines to 60 percent of what it was prior to divorce although it rises to 70 percent in the third year.
After discussing the reasons for income variations, Finnie proposes a set of policies that might
alleviate the post-divorce situation for women. Three
points are worth noting here. First, he recommends
child support guidelines that set awards according
to a fixed percentage of the non-custodial parent’s
gross income on a per-child basis (e.g., first child,
17.7 percent, third child 39.1 percent, and fifth child
51.7 percent), with the amounts deductible at source.
Second, he convincingly argues for maintaining the
existing rules on child-support tax payments (non-
309
custodial tax deductions) because changes could
lead to a decline in custodial families’ net income.
Finally, he suggests that in order to minimize perceived injustices and bitterness about child and
spousal support, couples write contracts before marriage and before the birth of a child stipulating the
terms of settlement in the event of divorce. Although
all three recommendations appear feasible, the last
one is impractical given the conditions under which
people enter marriage, for example, the initial euphoria and expectations of success. Moreover, even if prenuptial and pre-parenthood contracts were used by couples, their legal status might be questionable if matrimonial property regimes were ruled to take precedence.
In the third essay, Shelley Phipps proposes a replacement of the current child benefit program
which provides low-income families with refundable tax credits and all mothers with generous cash
allowances. (The recommended amounts range from
$1,000 to $1,500 per child, per annum.) While the
principle of universality entitles every mother to
child allowances, those in the higher tax brackets
would pay more. Given that approximately 18 percent of all Canadian families with children and 58
percent of single mothers live in poverty, Canada is
not doing as well as many industrialized countries
such as Sweden and Germany in reducing child poverty. Phipps maintains that since “children are our
most precious resource” it is imperative that we invest in their future so that they can become lawabiding, educated, and skilled citizens. Put simply,
she argues that higher family allowances will significantly lower child poverty in Canada. I disagree
with her recommendation because the overall welfare of children cannot be improved simply by giving mothers an extra $100 which, in many instances,
may not be directly spent on children. Unless there
are measures to ensure that each family gets adequate
income either through employment or through other
measures, children will share the poverty of the families they are born into. If Sweden or Germany are doing better than Canada in this regard, we must look for
other social programs directed at families in these
countries and not just child benefits.
CANADIAN PUBLIC POLICY – ANALYSE DE P OLITIQUES,
VOL. XXII, NO. 3 1996
310 Reviews/Comptes rendus
Finally, Nancy Taylor, in her proposal for a National Child Benefit Programme, points to certain
philosophical and administrative problems with the
existing programs. After reviewing three possible
programs that might improve child benefits, Naylor
proposes her own model. Specifically, her plan consolidates provincial and federal programs and expands them in such a way that the low-income families receive between $2,400 and $3,000 annually.
The annual cost would be an additional $2 billion
(an increase from $5.1 billion to over $7 billion in
1993), not including start-up costs and annual administrative costs. Taylor’s recommendations are
laudable but unrealistic in the current political and
economic climate which stresses “restructuring,
reengineering, and downsizing.”
Douglas Allen, in his commentary on the four
essays, contends that divorce is destroying the institutions of marriage and the family. I find his argument simplistic and uninformed. It ignores the fact
that nine out of ten Canadians still marry and,
moreover, that a majority stay married to the same
person until death. What he overlooks is that divorce
is not an act against the institution of marriage but
against a spouse who fails to fulfil some obligations
or violates a promise. I also take issue with his view
that no-fault divorce laws are the source of “all ills.”
In the first place, there is still a “no-fault” divorce
system in Canada comparable to California’s. Secondly, there is no moral or ethical justification for
legally coercing spouses to stay in a marriage that
is empty and mutually destructive.
Despite my reservations regarding the various
positions of the authors, this is a useful book, especially for those of us who are not economists. If and
when reprinted, attention should be paid to stylistic
and typographical errors.
G.N. RAMU , Department of Sociology, University of
Manitoba
WAR FINANCE AND RECONSTRUCTION
The Role of Canada’s Department of Finance, 1939 – 1946
by David W. Slater
with two chapters by R.B. Bryce
Copies can be obtained from David W. Slater, 199 Crocus Ave., Ottawa, Ontario, Canada,
K1H 6E7. Cost of Mailing and Handling: $5.00 Cdn, by cheque or money order. Limited
number of mimeographed end notes for additional $3.00 mailing and handling.
CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES,
VOL . XXII, NO . 3 1996
Reviews/Comptes rendus
NEW BOOKS
Walter L. Balk. Managerial Reform and Professional Empowerment in the Public Service.
Westport, CT: Quorum Books, 1996. Pp.viii,203.
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Stephen R. Barley. The New World of Work. Toronto: British-North American Committee. C.D.
Howe Institute, 1996. Pp.xvii,59. $18.95.
Charles M. Beach and George A. Slotsve. Are We
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the Myth of the Declining Middle Class in Canada.
Toronto: C.D. Howe Institute, 1996. Pp.ix,190.
$14.95.
Fred C. Bergsten and Il Sakong (eds.). KoreaUnited States Cooperation in the New World Order.
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George Fallis, Michael Poulton, Lawrence B.
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Sewell. Home Remedies: Rethinking Canadian
Housing Policy. Toronto: C.D. Howe Institute, 1995.
Pp.xxvi,244. $14.95.
Joe M.P. Freedman. The Charter School Idea:
Breaking Educational Gridlock. A Plain Language
Review of the Autonomous School Concept - A New
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Pp.111. $7.00.
Eric Marshall Green. Economic Security and High
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James Gwartney, Robert Lawson and Walter
Block. Economic Freedom of the World: 1975-1995.
Vancouver: The Fraser Institute, 1996. Pp.xxxii,308.
311
Arie Halachmi and Geert Bouckaert (eds.). Organizational Performance and Measurement in the
Public Sector: Toward Service, Effort and Accomplishment Reporting. Westport, CT: Quorum Books,
1996. Pp.xii,347. $75.00.
Peter Howitt (General Editor). The Implications
of Knowledge-Based Growth for Micro-Economic
Policies. Calgary: University of Calgary Press, 1996.
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Gary Clyde Hufbauer, assisted by Carol Gabyzon.
Fundamental Tax Reform and Border Tax Adjustments. Washington, DC: Institute for International
Economics, 1996. Pp.ix,90. $12.95.
Edward S. Kaplan. American Trade Policy, 19231995. Westport, CT: Greenwood Press, 1996.
Pp.x,176. $55.00.
Albert N. Link. Evaluating Public Sector: Research
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Stephen C. Loveless, Clifford P. McCue,
Raymond B. Surette and Dorothy Norris-Tirrell.
Immigration and its Impact on American Cities.
Westport, CT: Praeger Publishers, 1996. Pp.xvi,179.
$55.00.
National Council of Welfare. Poverty Profile 1994.
Ottawa: Minister of Supply and Services, 1996.
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Susan D. Phillips (ed.). How Ottawa Spends 199596: Mid-Life Crises. Ottawa: Carleton University
Press, 1995. Pp.viii,412. $22.95.
Lewis D. Solomon. Rethinking Our Centralized
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Bill Waiser. Park Prisoners: The Untold Story of Western Canada’s National Parks, 1915-1946. Saskatoon
and Calgary: Fifth House Publishers, 1995. Pp.x,294.
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VOL. XXII, NO. 3 1996