PLCY 210 Exam 2

Generic Policy Solutions 

Market Mechanism

Incentives 

Rules

Nonmarket Supply 

Insurance and Cushions

Traditional Market Failures

Public Goods

Externalities

Natural Monopolies

Information Asymmetries

Distributional Concerns

Equity of opportunity

Equity of outcomes 

Market Mechanisms 

Freeing Markets 

Facilitating Markets

Freeing Markets

Deregulate

Legalize
Privatize

Facillitating Markets

Allocate through property rights

Create new marketable goods

Altering Incentives 

Supply side taxes

supply side subsidies 

Demand side taxes 

Demand side subsidies 

Establishing Rules

Frameworks

Regulations

Regulations

Price Regulation

Quantity Regulation

Direct information provision

Indirection information provision

Supplying Goods through Nonmarket mechanisms 

direct supply

contracting out 

Direct supply

Bureaus

Providing insurance and cushions

Insurance

Cushions

Stockpiling

Transitional assistance

Cash grants

No Action Altternative Benefits 

Benchmark and clarification 

Bardach and Patashnik on “Do Nothing”

Natural course run its way

Needs to be evaluated against other things

Basic Alternatives

regulatory enforcement, subsidy, internventions/policies

Variant

Altered version of basic alternative

Arriving at Alternatives Process 

Start comprehensive, end up focused 

Think out of the box

Model the system and describe causes 

When there is a choice involving gains

People are risk averse

When there is a choice involving loss

People are risk taking

Mental accounting

Different accounts in your mind, we treat our dollars differently