2. Public Policy: Objectives and Principles Roger Kerr New Zealand Business Roundtable

3. “The framework of institutions, laws and programmes laid down by the arms of government (parliament, the executive and the judiciary) that regulate the economy and wider social interactions.”

4. Critical issue: The proper role of government

5. SINGAPORE IRELAND HONG KONG

6. Objective of public policy Human flourishing - not just about economy, monetary values, efficiency - encompasses fairness, environmental quality, freedom

7. Ideological? Should be evidence-based Role of economics Free trade, school choice, privatisation Boundaries of political debate

8. Common framework Markets vs government Invisible vs visible hand Need governments to set rules of game

9. Market exchanges Politics/collective choice Voluntary cooperation

10. Dominant means of getting what we want Norm in families, small groups Also clubs, associations, charities Involves redistribution within families and through altruism Works best in ‘face to face’ settings But can’t run a large society that way

11. Market exchanges Essential for society at large Gains from specialisation and trade Prices - transmit information - coordinate plans - markets continuously adjust Consumers’ interests paramount But - market failures

12. Politics Voting mechanism is imprecise - candidates, parties, electoral systems, accountability Coercion - not mutual benefits, as with markets & voluntary cooperation Tyrannies of majorities and minorities Political market failures

13. Upshot? No ideal yardstick Political/government failures routine, not exceptional Must compare real-world alternatives

14. In choosing among real world alternatives Focus on incentives Bias in favour of economic freedom Implies limited government

15. How do we constrain government ?

19. Economic constitutions Sound processes Compensation for Regulatory Takings Taxpayer/Ratepayer Bills of Rights

20. Public policy and business management A country is not a company National central planning doesn’t work Different skill requirements Problems with DIY economics

21. Conclusions Good public policy: institutions that promote human flourishing There is a significant role for government, but individuals need protection from government abuse governments don’t necessarily act in the public interest remedy of government intervention sometimes makes things worse

22. The biggest public policy mistake: to expect too much of government The challenge: how to restrain government to what it does well