Gridlock and inefficient policy instruments

Why do rational politicians choose inefficient policy instruments? Environmental regulation, for example, often takes the form of technology standards and quotas even when cost‐effective Pigou taxes are available. To shed light on this puzzle, we present a stochastic game with multiple legislative veto players and show that inefficient policy instruments are politically easier to repeal than efficient instruments. Anticipating this, heterogeneous legislators agree more readily on an inefficient policy instrument. We describe when inefficient instruments are likely to be chosen, and predict that they are used more frequently in (moderately) polarized political environments and in volatile economic environments. We show conditions under which players strictly benefit from the availability of the inefficient instrument.

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Improving poverty reduction in Europe: What works best where?

Journal of European Social Policy ◽

10.1177/0958928718792130 ◽

2018 ◽

Vol 29 (1) ◽

pp. 29-43 ◽

Cited By ~ 3

Author(s):

Chrysa Leventi ◽

Holly Sutherland ◽

Iva Valentinova Tasseva

Keyword(s):

Poverty Reduction ◽

Policy Design ◽

Social Assistance ◽

Policy Instruments ◽

Cost Effective ◽

Policy Instrument ◽

Income Poverty ◽

Child Benefits ◽

What Works ◽

Effective Instrument

This article examines how income poverty is affected by changes to the scale of tax-benefit policies and which are the most cost-effective policies in reducing poverty or limiting its increase in seven diverse EU countries. We do that by measuring the implications of increasing/reducing the scale of each policy instrument, using microsimulation methods while holding constant the policy design and national context. We consider commonly applied policy instruments with a direct effect on household income: child benefits, social assistance, income tax lower thresholds and a benchmark case of rescaling the whole tax-benefit system. We find that the assessment of the most cost-effective instrument may depend on the measure of poverty used and the direction and scale of the change. Nevertheless, our results indicate that the options that reduce poverty most cost-effectively in most countries are increasing child benefits and social assistance, while reducing the former is a particularly poverty-increasing way of making budgetary cuts.

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Ecolabeling as a Policy Instrument for More Sustainable Development: The Evidence of Supply and Demand Interactions from Russia

Sustainability ◽

10.3390/su13179581 ◽

2021 ◽

Vol 13 (17) ◽

pp. 9581

Author(s):

Svetlana Ratner ◽

Konstantin Gomonov ◽

Svetlana Revinova ◽

Inna Lazanyuk

Keyword(s):

Sustainable Development ◽

Supply And Demand ◽

Policy Instruments ◽

Cost Effective ◽

Policy Instrument ◽

International Standards ◽

Consumer Awareness ◽

Inaccurate Information ◽

Goods And Services ◽

Environmental Labels

Ecolabeling can complement more conventional policy instruments such as taxes and subsidies to stimulate more sustainable development of the economy. However, in practice, ecolabels may not always comply with legal requirements in terms of reliability, accuracy and clarity, and sometimes deliberately mislead the consumer. In Russia and many other developing countries, the problem of inaccurate information on the environmental properties of goods and services is still not recognized. The only regulatory document that currently defines the basic principles for developing and using environmental labels and declarations is the national versions of international standards ISO 14020/14021/14024/14025-Environmental Labels Package. This paper contributes to the literature in two main dimensions. It assesses the degree of prevalence of ecolabeling in the Russian market of everyday goods and the reliability and informational content of frequently used labels (supply-side research). Second, it estimates the consumers’ awareness and reaction to ecolabeled products (demand-side research). The most obvious finding to emerge from this study is that low consumer awareness keeps the level of greenwashing low, but at the same time does not stimulate eco-innovations. We suggest developing smartphone applications that allow buyers to check the compliance of ecolabels on a product with ISO standards directly during the shopping process. We propose to use this approach as a cost-effective and straightforward way to simultaneously raise consumer awareness of ecolabeling and reduce the likelihood of greenwashing.

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A RECONSIDERATION OF THE DOCTRINAL FOUNDATIONS OF MONETARY POLICY RULES: FISHER VERSUS CHICAGO

Journal of the History of Economic Thought ◽

10.1017/s1053837219000622 ◽

2021 ◽

Vol 43 (1) ◽

pp. 55-82

Author(s):

George S. Tavlas

Keyword(s):

Monetary Policy ◽

Price Level ◽

Policy Instruments ◽

Policy Instrument ◽

Superior Performance ◽

Policy Uncertainty ◽

Direct Link ◽

Policy Rule ◽

Policy Rules ◽

Monetary Policy Rules

There has long been a presumption that the price-level stabilization frameworks of Irving Fisher and Chicagoans Henry Simons and Lloyd Mints were essentially equivalent. I show that there were subtle, but important, differences in the rationales underlying the policies of Fisher and the Chicagoans. Fisher’s framework involved substantial discretion in the setting of the policy instruments; for the Chicagoans the objective of a policy rule was to tie the hands of the authorities in order to reduce discretion and, thus, monetary policy uncertainty. In contrast to Fisher, the Chicagoans provided assessments of the workings of alternative rules, assessed various criteria—including simplicity and reduction of political pressures—in the specification of rules, and concluded that rules would provide superior performance compared with discretion. Each of these characteristics provided a direct link to the rules-based framework of Milton Friedman. Like Friedman’s framework, Simons’s preferred rule targeted a policy instrument.

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Transformation of Sociocultural Integration Policy and Inherent Political Theories in the United Kingdom: A Way Forward

SAGE Open ◽

10.1177/21582440211007461 ◽

2021 ◽

Vol 11 (2) ◽

pp. 215824402110074

Author(s):

Samiul Parvez Ahmed ◽

Sarwar Uddin Ahmed ◽

Ikramul Hasan

Keyword(s):

United Kingdom ◽

Empirical Data ◽

Policy Instruments ◽

Diversity Management ◽

Policy Instrument ◽

Management Policy ◽

Policy Framework ◽

Theoretical Argument ◽

Integration Policy ◽

The United Kingdom

The contemporary integration policies (Community Cohesion Agenda [CCA]) of the United Kingdom have been criticized for their foundational weaknesses, conceptual inadequacies, myopic views with regard to the complexity of the issue, lack of evidence, and so on. Vast majority of the studies conducted to verify this discourse have been done in the line of theoretical arguments of diversity management rather than exploring their connections to a target community in reality. This study aims at establishing a linkage between the growing theoretical arguments of the integration discourse with empirical data in light of the policy framework of the CCA. We have selected the fastest growing Bangladeshi community of the CCA-adapted Aston City of Birmingham as the representative group of the ethnic minority communities of the United Kingdom. Qualitative data collection approach has been followed, where primary in-depth interviews were conducted on various policy actors, social workers, faith leaders, and Bangladeshi residents of Aston. The entire policy instrument, starting from its broad purposes to operational strategies, has been severely challenged by both residents of the community and relevant policy-implementing bodies in Aston. CCA policies appear to be largely inclined toward the interculturalism/communitarianism ideology rather than to multiculturalism. However, the empirical evidence shows that the need for multiculturalism, to be more specific—Bristol School of Multiculturalism, as a political theory remains in the integration discourse in the context of the United Kingdom. Findings are expected to have implications on practitioners and policy makers in designing diversity management policy instruments by having a wider synthesized view on both theoretical argument and empirical data.

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Towards a Circular Economy Taxation Framework: Expectations and Challenges of Implementation

Circular Economy and Sustainability ◽

10.1007/s43615-020-00002-z ◽

2021 ◽

Cited By ~ 1

Author(s):

Leonidas Milios

Keyword(s):

Circular Economy ◽

Action Plan ◽

Policy Instruments ◽

Policy Instrument ◽

Detailed Examination ◽

Raw Material ◽

The European Union ◽

Material Resource ◽

Waste Hierarchy ◽

Tax Relief

AbstractThe transition to a circular economy is a complex process requiring wide multi-level and multi-stakeholder engagement and can be facilitated by appropriate policy interventions. Taking stock of the importance of a well-balanced policy mix that includes a variety of complementing policy instruments, the circular economy action plan of the European Union (COM(2020) 98 final) includes a section about “getting the economics right” in which it encourages the application of economic instruments. This contribution presents a comprehensive taxation framework, applied across the life cycle of products. The framework includes (1) a raw material resource tax, (2) reuse/repair tax relief, and (3) a waste hierarchy tax at the end of life of products. The research is based on a mixed method approach, using different sources to analyse the different measures in the framework. More mature concepts, such as material resource taxes, are analysed by reviewing the existing literature. The analysis of tax relief on repairs is based on interviews with stakeholders in Sweden, where this economic policy instrument has been implemented since 2017. Finally, for the waste hierarchy tax, which is a novel proposition in this contribution, macroeconomic modelling is used to analyse potential impacts of future implementation. In all cases, several implementation challenges are identified, and potential solutions are discussed according to literature and empirical sources. Further research is required both at the individual instrument and at the framework level. Each of the tax proposals needs a more detailed examination for its specificities of implementation, following the results of this study.

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Developing a new national MDMA policy: Results of a multi-decision multi-criterion decision analysis

Journal of Psychopharmacology ◽

10.1177/0269881120981380 ◽

2021 ◽

pp. 026988112098138

Author(s):

Jan van Amsterdam ◽

Gjalt-Jorn Ygram Peters ◽

Ed Pennings ◽

Tom Blickman ◽

Kaj Hollemans ◽

...

Keyword(s):

Law Enforcement ◽

Decision Analysis ◽

Optimal Policy ◽

Policy Instruments ◽

Policy Instrument ◽

Organised Crime ◽

Sensitivity Analyses ◽

Environmental Damage ◽

Policy Model ◽

Outcome Criteria

Background: Ecstasy (3,4-methylenedioxymethamphetamine (MDMA)) has a relatively low harm and low dependence liability but is scheduled on List I of the Dutch Opium Act (‘hard drugs’). Concerns surrounding increasing MDMA-related criminality coupled with the possibly inappropriate scheduling of MDMA initiated a debate to revise the current Dutch ecstasy policy. Methods: An interdisciplinary group of 18 experts on health, social harms and drug criminality and law enforcement reformulated the science-based Dutch MDMA policy using multi-decision multi-criterion decision analysis (MD-MCDA). The experts collectively formulated policy instruments and rated their effects on 25 outcome criteria, including health, criminality, law enforcement and financial issues, thematically grouped in six clusters. Results: The experts scored the effect of 22 policy instruments, each with between two and seven different mutually exclusive options, on 25 outcome criteria. The optimal policy model was defined by the set of 22 policy instrument options which gave the highest overall score on the 25 outcome criteria. Implementation of the optimal policy model, including regulated MDMA sales, decreases health harms, MDMA-related organised crime and environmental damage, as well as increases state revenues and quality of MDMA products and user information. This model was slightly modified to increase its political feasibility. Sensitivity analyses showed that the outcomes of the current MD-MCDA are robust and independent of variability in weight values. Conclusion: The present results provide a feasible and realistic set of policy instrument options to revise the legislation towards a rational MDMA policy that is likely to reduce both adverse (public) health risks and MDMA-related criminal burden.

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Public support for ‘soft’ versus ‘hard’ public policies: Review of the evidence

Journal of Behavioral Public Administration ◽

10.30636/jbpa.42.220 ◽

2021 ◽

Vol 4 (2) ◽

Author(s):

Sanchayan Banerjee ◽

Manu Savani ◽

Ganga Shreedhar

Keyword(s):

Financial Incentives ◽

Public Policies ◽

Public Support ◽

Policy Instruments ◽

Policy Instrument ◽

Future Research ◽

The Public ◽

Future Research Agenda ◽

Educational Campaigns

This article reviews the literature on public support for ‘soft’ versus ‘hard’ policy instruments for behaviour change, and the factors that drive such preferences. Soft policies typically include ‘moral suasion’ and educational campaigns, and more recently behavioural public policy approaches like nudges. Hard policy instruments, such as laws and taxes, restrict choices and alter financial incentives. In contrast to the public support evidenced for hard policy instruments during COVID-19, prior academic literature pointed to support for softer policy instruments. We investigate and synthesise the evidence on when people prefer one type of policy instrument over another. Drawing on multi-disciplinary evidence, we identify perceived effectiveness, trust, personal experience and self-interest as important determinants of policy instrument preferences, along with broader factors including the choice and country context. We further identify various gaps in our understanding that informs and organise a future research agenda around three themes. Specifically, we propose new directions for research on what drives public support for hard versus soft behavioural public policies, highlighting the value of investigating the role of individual versus contextual factors (especially the role of behavioural biases); how preferences evolve over time; and whether and how preferences spillovers across different policy domains.

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OPTIMAL ENVIRONMENTAL POLICIES AND RENEWABLE ENERGY INVESTMENT: EVIDENCE FROM THE TEXAS ELECTRICITY MARKET

Climate Change Economics ◽

10.1142/s201000781650010x ◽

2016 ◽

Vol 07 (04) ◽

pp. 1650010 ◽

Cited By ~ 11

Author(s):

WICHSINEE WIBULPOLPRASERT

Keyword(s):

Renewable Energy ◽

Electricity Market ◽

Policy Instruments ◽

Cost Effective ◽

Status Quo ◽

Environmental Benefits ◽

Welfare Gain ◽

Energy Investment ◽

Welfare Benefits ◽

The Status

Renewable electricity subsidies have been popular policy instruments to combat climate change because of their ability to offset emissions. This paper studies the long-run welfare benefits of optimizing the design of the existing renewable energy subsidy (the status quo) in the presence of heterogeneity in the offset emissions. In particular, I measure the welfare gain from differentiating renewable subsidies across location and time to reflect the environmental benefits from emissions offset in the context of wind energy in the Texas electricity market. I find that the welfare gain from differentiation is small compared to the gain already achieved under the status quo subsidy. In contrast, the optimal emissions tax yields much larger welfare gain because it engages in other cost-effective emissions abatement channels that renewable energy subsidies do not: namely, demand conservation and cross-plant fuel substitution.

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Transparency and timeliness: the monitoring of agricultural policies in the WTO using OECD data

World Trade Review ◽

10.1017/s1474745612000535 ◽

2013 ◽

Vol 12 (3) ◽

pp. 533-547 ◽

Cited By ~ 8

Author(s):

TIM JOSLING ◽

KLAUS MITTENZWEI

Keyword(s):

Policy Instruments ◽

Agricultural Policies ◽

Multilateral Trade ◽

The Future ◽

Domestic Support ◽

Shed Light ◽

The Eu ◽

Oecd Data

AbstractTransparency in the multilateral trade system is fundamental. Monitoring the compliance of WTO members with their obligations is an important part of that transparency, and timeliness in the notification of compliance is crucial. In the case of domestic support to agriculture, the notifications of compliance with obligations has been slow and opaque. But another database exists that could both illuminate the extent to which policy instruments are correctly notified and provide a convenient way to ensure timely ‘pre-notifications’ in the event that delays occur in the future. This note shows how the OECD database can be used, for example, to shed light on the extent to which payments to producers that require production as a matter of eligibility are presently notified to the WTO as having no effect on production. We also demonstrate the feasibility of using OECD data to construct ‘pre-notifications’ by calculating the (as yet un-notified) domestic support notifications for the EU for the years 2009/10 and 2010/11.

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Demand-Side Food Policies for Public and Planetary Health

Sustainability ◽

10.3390/su12155924 ◽

2020 ◽

Vol 12 (15) ◽

pp. 5924

Author(s):

Elisabeth H.M. Temme ◽

Reina E. Vellinga ◽

Henri de Ruiter ◽

Susanna Kugelberg ◽

Mirjam van de Kamp ◽

...

Keyword(s):

Public Health ◽

Human Health ◽

Food System ◽

Food Policy ◽

Policy Instruments ◽

Policy Instrument ◽

Overweight And Obesity ◽

Demand Side ◽

Effective Policy ◽

Food Policies

Background: The current food system has major consequences for the environment and for human health. Alignment of the food policy areas of mitigating climate change and public health will ensure coherent and effective policy interventions for sustaining human health and the environment. This paper explores literature on demand-side policies that aim to reduce consumption of animal-based foods, increase plant-based foods, and reduce overconsumption. Methods: We searched for publications, published between January 2000 and December 2019, considering the above policy domains. Articles were distinguished for type of policy instrument, for topic via keywords and examples were given. Results: The majority of demand-side policies focus on preventing overweight and obesity, using all types of policy instruments including more forceful market-based policies. Hardly any examples of public policies explicitly aiming to lower animal-based foods consumption were found. Policies combining health and sustainability objectives are few and mainly of the information type. Discussion: Moving towards environmentally sustainable and healthy diets is challenging as the implemented demand-side policies focus largely on human health, and not yet on environmental outcomes, or on win-wins. Policies targeting foods from the health perspective can contribute to lower environmental impacts, by indicating suitable animal-based food replacers, and aiming at avoiding overconsumption of energy dense-nutrient poor foods. Preferred policies include a variety of instruments, including strong measures. Conclusions: Working solutions are available to ensure coherent and effective demand side food policies aligning public health and environmental aims. Implementation of aligned and effective policy packages is urgent and needed.

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