1. Policy Instruments and Design Douglas Brown St Francis Xavier University Pols 342 February 2008

2. Policy Instruments and Design Definition of policy instrument Les Pal’s typology of instruments Doing Nothing Acting through citizens and private players Information// Tax and Spend // Regulation Information// Tax and Spend // Regulation Acting directly Choosing among instruments

3. What is policy design? Les Pal’s definition: “…choosing the most appropriate instrument [or tool] to deal with a policy problem as it has been defined in order to achieve a given policy goal.”

4. Policy Instruments…. “Resources and techniques that governments have at their disposal …to affect human behaviour… Assumes that the state has the authority to issue binding rules and prohibitions, and that this binding authority will be accepted as legitimate, and can be enforced.

5. The ends of policy (simplified) Either getting people (or corporations, other governments, etc.) to do something Or Getting them to stop from doing something

6. Three more simple categories: The policy instrument can be focused on one or all of the following: 1. changing the behaviour of individuals 1. changing the behaviour of individuals 2. changing political, economic or social conditions 2. changing political, economic or social conditions 3. providing services to the public 3. providing services to the public

7. Les Pal’s Typology of Policy Instruments Doing nothing Acting indirectly Information Information Taxing and spending Taxing and spending Regulation Regulation Acting directly

8. Doing Nothing When a problem is not a problem after all When the costs of action exceed the benefits Other resource allocation problems Sets a bad precedent When the problem will take care of itself (or be taken care of by society or another authority) Even “doing nothing” may require a lot of analysis and deliberation

9. Acting indirectly 1) use of information Public education as a policy tool Public education as an end in itself Government as “bully pulpit” When does public information become propaganda? Public disclosure as an instrument

10. Acting indirectly 2) taxing and spending Spending money Transfers to persons, governments Transfers to persons, governments Grants and contributions, vouchers Grants and contributions, vouchers Subsidies, loans, loan guarantees, etc. Subsidies, loans, loan guarantees, etc. Taxing money Income and consumption taxes Income and consumption taxes “sin” taxes “sin” taxes User fees and charges User fees and charges Not taxing – tax expenditures

11. Acting indirectly 3) regulation Passing a new or amended law Authorizing new or amended regulations (subordinate legislation) Establishing licensing and permission processes Authorizing self-regulation Endorsing voluntary codes of conduct

12. Acting Directly Government directly funds and provides a public (or private) good or service Arm’s length provision (crown corporation) Government contracts out the provision of a good or service Partnerships with other agencies, governments or not-for-profit organizations

13. Choosing Among Instruments Criteria for choice: Administrative convenience, efficiency Administrative convenience, efficiency Legal and constitutional jurisdiction Legal and constitutional jurisdiction Accountability, transparency Accountability, transparency Degree of legitimacy and political consensus Degree of legitimacy and political consensus Broad fit with political and fiscal priorities of government Broad fit with political and fiscal priorities of government

14. Choosing among instruments: other considerations Policy instruments often bundled, and one often will not be enough Government departments have their biases and specialized skills, and often prefer to do what they know Intangibles of political leadership, i.e. preferences can be personal