Policy Instruments and Policy Instruments and DesignDesignDouglas BrownDouglas Brown

St Francis Xavier UniversitySt Francis Xavier UniversityPols 342Pols 342

February 2008February 2008

Policy Instruments and DesignPolicy Instruments and Design

Definition of policy instrumentDefinition of policy instrument

Les Pal’s typology of instrumentsLes Pal’s typology of instruments

Doing NothingDoing Nothing

Acting through citizens and private playersActing through citizens and private players InformationInformation // Tax and Spend // Regulation// Tax and Spend // Regulation

Acting directlyActing directly

Choosing among instruments Choosing among instruments

What is policy design? What is policy design?

Les Pal’s definition:Les Pal’s definition:

“…“…choosing the most appropriate choosing the most appropriate instrument [or tool] to deal with a policy instrument [or tool] to deal with a policy problem as it has been defined in order to problem as it has been defined in order to achieve a given policy goal.”achieve a given policy goal.”

Policy Instruments….Policy Instruments….

““Resources and techniques that Resources and techniques that governments have at their disposal …to governments have at their disposal …to affect human behaviour…affect human behaviour…

Assumes that the state has the authority Assumes that the state has the authority to issue binding rules and prohibitions, to issue binding rules and prohibitions, and that this binding authority will be and that this binding authority will be accepted as legitimate, and can be accepted as legitimate, and can be enforced.enforced.

The ends of policy (simplified)The ends of policy (simplified)

Either getting people (or corporations, Either getting people (or corporations, other governments, etc.) to other governments, etc.) to do somethingdo something

Or Or

Getting them to Getting them to stop from doing stop from doing somethingsomething

Three more simple categories:Three more simple categories:

The policy instrument can be focused on The policy instrument can be focused on one or all of the following:one or all of the following: 1. 1. changing the behaviour of individualschanging the behaviour of individuals 2. changing political, economic or social 2. changing political, economic or social

conditionsconditions 3. providing services to the public3. providing services to the public

Les Pal’s Typology of Policy Les Pal’s Typology of Policy InstrumentsInstruments

Doing nothingDoing nothing

Acting indirectlyActing indirectly InformationInformation Taxing and spendingTaxing and spending RegulationRegulation

Acting directlyActing directly

Doing NothingDoing Nothing

When a problem is not a problem after allWhen a problem is not a problem after all

When the costs of action exceed the benefitsWhen the costs of action exceed the benefits

Other resource allocation problemsOther resource allocation problems

Sets a bad precedentSets a bad precedent

When the problem will take care of itself (or be When the problem will take care of itself (or be taken care of by society or another authority)taken care of by society or another authority)

Even “doing nothing” may require a lot of Even “doing nothing” may require a lot of analysis and deliberationanalysis and deliberation

Acting indirectlyActing indirectly1) use of information1) use of information

Public education as a policy toolPublic education as a policy tool

Public education as an end in itselfPublic education as an end in itself

Government as “bully pulpit”Government as “bully pulpit”

When does public information become When does public information become propaganda? propaganda?

Public disclosure as an instrumentPublic disclosure as an instrument

Acting indirectlyActing indirectly2) taxing and spending2) taxing and spending

Spending moneySpending money Transfers to persons, governmentsTransfers to persons, governments Grants and contributions, vouchers Grants and contributions, vouchers Subsidies, loans, loan guarantees, etc.Subsidies, loans, loan guarantees, etc.

Taxing moneyTaxing money Income and consumption taxesIncome and consumption taxes ““sin” taxessin” taxes User fees and chargesUser fees and charges

Not taxing – tax expenditures Not taxing – tax expenditures

Acting indirectlyActing indirectly3) regulation3) regulation

Passing a new or amended lawPassing a new or amended law

Authorizing new or amended regulations Authorizing new or amended regulations (subordinate legislation)(subordinate legislation)

Establishing licensing and permission Establishing licensing and permission processesprocesses

Authorizing self-regulationAuthorizing self-regulation

Endorsing voluntary codes of conductEndorsing voluntary codes of conduct

Acting DirectlyActing Directly

Government directly funds and provides a Government directly funds and provides a public (or private) good or servicepublic (or private) good or service

Arm’s length provision (crown corporation)Arm’s length provision (crown corporation)

Government contracts out the provision of Government contracts out the provision of a good or servicea good or service

Partnerships with other agencies, Partnerships with other agencies, governments or not-for-profit organizationsgovernments or not-for-profit organizations

Choosing Among InstrumentsChoosing Among Instruments

Criteria for choice:Criteria for choice: Administrative convenience, efficiencyAdministrative convenience, efficiency Legal and constitutional jurisdictionLegal and constitutional jurisdiction Accountability, transparencyAccountability, transparency Degree of legitimacy and political consensusDegree of legitimacy and political consensus Broad fit with political and fiscal priorities of Broad fit with political and fiscal priorities of

governmentgovernment

Choosing among instruments: Choosing among instruments: other considerations other considerations

Policy instruments often bundled, and one Policy instruments often bundled, and one often will not be enoughoften will not be enough

Government departments have their Government departments have their biases and specialized skills, and often biases and specialized skills, and often prefer to do what they knowprefer to do what they know

Intangibles of political leadership, i.e. Intangibles of political leadership, i.e. preferences can be personalpreferences can be personal