pubpol quiz 2 - evaluative criteria + tools of public policy

effectiveness

likelihood of achieving goals

efficiency

values of benefits in relation to dollar costs

equity

fairness in distribution of the policy’s costs, benefits and risks across groups

feasibility

extent to which policy is feasible politically, socially, administratively, and technically

what are the 4 tools of public policy?

regulatory tools, economic and market-based tools, information and persuasion tools, organizational tools

regulatory tools

require or prohibit certain behaviours

Economic and Market-Based Tools

alter economic incentives to shift behaviour

Information and Persuasion Tools

inform, persuade, or nudge to change behaviour

Organizational Tools

develop structures to manage resources, deliver services, or enforce compliance

economic regulation

applied to activities in a particular industry that protect consumers, promote fair competition, and manage monopolies

what are examples of common economic controls?

price, quantity, service quality, market entry/exit

price

setting a max or min e.g. rent control, minimum wage

quantity

controlling the amount of a good or service that can be produced e.g. fishing quot

service quality

ensuring that services meet specific standards e.g. food safety

market entry/exit

managing the number of firms, by limiting new entrants or regulating firm exit from a market e.g. bank charters

social regulation

focus on negative externalities and information asymmetries

what are the common types of social regulation?

means-based, performance-based, disclosure

means-based

regulators set specific methods, technologies, or standards that businesses must adopt e.g. requiring specific pollution-control equipment in power plants

performance-based

regulations define the desired outcome or goal but allow regulated entities to choose the best method to achieve it e.g. limiting pollution to a certain level

disclosure

regulations about what information must be shared, in order to allow consumers to make informed choices e.g. energy ratings on appliances

key features of regulatory tools

mandatory and transparent standards - high level of control and clear compliance expectations

backed by sanctions - penalties and fines, criminal charges, admin consequences, court injunctions

disadvantages of regulations

reducing innovation, pushing out competitors, businesses must leave the industry, enforcement costs

types of rulemaking

formal, informal

formal rulemaking

only happens when statute says rulemaking must be on the record
involves hearings and presenting formal documentation to support the rule in front of a commission or administrative law judge

informal rulemaking

notice and comment rulemaking
agency proposes a new rule or standard and the public can comment through a Notice of Proposed Rulemaking, which affects the agency’s final decision to publish a rule
final rule must acknowledge the rulemaking record, otherwise could be overturned

gov taxation

federal and state income tax
federal - source of revenue generation, progressive
state - widely variable

payroll taxes

paid on wages/salaries to finance social insurance programs
e.g. social security, medicare

capital gains taxes

taxes on gains from assets owned for personal investments, purposes

corporate income taxes

levied by gov on business profits

sales tax

consumption tax on goods and services
variation among states
significant source of revenue, significant cost for consumers

excise tax

imposed on specific goods, meant to limit consumption or activity
e.g. alcohol, cigarettes

property taxes

property’s assessed value and tax rate
local gov - tax real property (land, buildings)

state gov - tax personal property (equipment, inventories)

estate/inheritance tax

imposed on individual property at time of death

wealth taxes

exist in European nations

tax expenditures

exceptions to paying your full share of taxes, revenue forgone by fed gov
e.g. student loans, childcare, tax deductions

expanded child tax credit

example of fiscalization of social policy
use of tax policy for social policy purposes

other examples of tax credit

research and development

investment tax credit for renewable energy

enterprise zone tax incentives

electrical vehicle tax credit

R&D tax credit

companies receive tax credit for investing in innovation and research activities

ITC for renewable energy

businesses or individuals installing renewable energy system receive tax credits

enterprise zone incentives

businesses operating in economically distressed areas can receive federal, state and local tax breaks

EV tax credit

consumers receive tax credits for purchasing EVs

subsidies

public payments to influence levels of production or prices e.g. agricultural, education

vouchers

gov funded coupons that allow consumers to purcahse a specific good or service from approved providers e.g. housing, GI bill for veterans

information and persuasion tools

inform, persuade or nudge to change behaviour

informational tools

non-coercive policy instruments to change behaviour through communication or choice architecture

what do informational tools do?

provide factual neutral info to improve decision making

reduce info asymmetry

direct public provision of info e.g. nutrition labels

persuasion tools

actively shape attitudes or norms through messaging and framing

how can persuasion tools be used?

aim to shift beliefs or values through emotional appeals, social norms, authority endorsement and fear-based messaging

nudges

small changes to choice architecture

what do nudges do?

design an environment or context where people make decisions

e.g. automatic opt-in/out with organ donation

organizational tools

developments or partnerships with institutions and structures to act directly

what do organizational tools do?

direct public provision through gov of goods and services

what are the pros of organizational tools?

high accountability

direct democratic control

equity over profit

what are the cons of organizational tools?

potential bureaucratic inefficiency

less competition and flexibility

political interference

what are the implications of the gov working with external orgs to provide goods or services?

flexibility

specialized expertise

innovation

risk of profit over public interest

reduced transparency

public private parternships

long term collabs btw gov and private sector to finance, build or manage public infrastructure or services
e.g. hospital facilities, childcare provision, transit systems

what are the implications of public private partnerships?

access to private capital

risk transfer or pooling

technical expertise

long term commitments

authorizing new market designs

marketable/tradeable permits - systems allow firms to buy and sell permits for emissions

insurance exchanges - state and fed public health insurance exchanges authorized by the ACA