Typologies of Policy Instruments

… a core concept used in Policy Analysis and Process and Atlas101

Concept description

Leslie Pal (reference below) reviews the most well-known typologies of policy instruments.

Pal writes (p. 131):

“The history of attempts to classify governing policy instruments begins with Kirschen (1964). His system presented 62 different types of economic policy instruments, and the various contributors to the field since have tried various ways of combining aggregate categories with the more finely grained instruments within them.”

Pal highlights four:

Doern and Phidd (1992, p. 97, based on earlier work by Doern and Wilson, 1974) argue that there are really only five broad categories:

  1. self-regulation
  2. exhortation
  3. expenditure
  4. regulation (including taxation)
  5. public ownership.

This typology assumed that as one moves from the first category to the last, one moves roughly along a continuum of legitimate coercion. The argument was that all government in a liberal democracy involves some degree of imposition or coercion and that politicians generally prefer to use the least coercive instrument possible. Within these broad categories, Doern and Phidd identify as many as 26 finer “graduations of choice” such as grants and subsidies, guidelines, and speeches (p. 112).

Hood and Margetts (Hood (1983; Hood & Margetts 2007) developed what he called the “NATO scheme,” standing for the different resources that governments have at their disposal to effect policy change:

  1. N stands for nodality or information resources
  2. A, for authority;
  3. T, for treasure or money; and
  4. O, for organization or personnel.

Linder and Peters (1989, p. 44) developed their own schema that tries to draw on several existing schemes, including Hood’s. Four basic classes appeared over and over again in the literature they reviewed, but not always the same four, and so they combined them into a group of seven major categories of policy instruments:

  1. direct provision
  2. subsidy
  3. tax
  4. contract
  5. authority
  6. regulation (the only consensus class)
  7. exhortation

Salamon (2002) defines a policy tool or instrument as “an identifiable method through which collective action is structured to address a public problem” (p. 19). Salamon is particularly interested in the degree to which modern governments are third-party governments. “What is distinctive about many of the newer tools of public action is that they involved the sharing with third-party actors of a far more basic governmental function: the exercise of discretion over the use of public authority and the spending of public funds” (p. 2). His list includes”

  1. government enterprises
  2. economic and social regulation
  3. government insurance
  4. public information
  5. taxes
  6. charges and tradable permits
  7. procurement
  8. contracting
  9. purchase of service
  10. tort liability (giving people rights in law to seek compensation for wrongs).

Pal summarizes (p. 133):

“Given this rich variety of classifications and lists, how to proceed? Vedung (1998) defined policy instruments as the “set of techniques by which governmental authorities wield their power in attempting to ensure support and effect or prevent social change” (p. 21). The important thing about this definition is that it reminds us that policy, programs, and ultimately the policy instruments that give them effect are about deliberately achieving some desired outcome, and that moreover, social change is ultimately a result of human behaviour. The question of instruments, therefore, is really about the resources and techniques that governments have at their disposal to achieve certain outcomes through affecting human behaviour. In a phrase, it often involves making people do things or stopping them from doing some other things. For this reason most classifications of policy instruments stress the degree of coercion involved. Salamon (2002) defines coercion as the most salient dimension in understanding policy tools and suggests that it “measures the extent to which a tool restricts individual or group behaviour as opposed to merely encouraging or discouraging it” (p. 25). Stewart (2009, p. 90) argues that a basic distinction in instruments is between “tough” (coercive and sanction-based) and “tender” (relying on incentives, persuasion, and capacity building).The state has the monopoly of legitimate force in most societies, as well as the capacity to issue binding rules and prohibitions. It is useful therefore to consider the degree of state involvement and the degree of state coercion embedded in any policy instrument, as long as we understand that the choice of instrument assumes some grasp of what level of coercion will be accepted as legitimate in society.”

See also: Policy Design;  Pal’s Classification of Policy Instruments.

Atlas topic, subject, and course

Policy Instruments and Design (core topic) in Policy Analysis and Process and Atlas101 Policy Analysis and Process.

Sources

Leslie Pal (2014), Beyond Policy Analysis – Public Issue Management in Turbulent Times, Fifth Edition, Nelson Education, Toronto. See Beyond Policy Analysis – Book Highlights.

Works noted above in Pal’s review are:

Doern, G. B., & Phidd, R. W. (1992). Canadian public policy: Ideas, structure, process (2nd ed.). Toronto, ON: Nelson.

Doern, G. B., & Wilson, V. S. (Eds.). (1974). Issues in Canadian public policy. Toronto, ON: Methuen.

Hood, C. (1983). The tools of government. London, UK: Macmillan.

Hood, C., & Margetts, H. Z. (2007). The tools of government in the digital age. New York, NY: Palgrave Macmillan.

Kirschen, E. S., et al. (1964). Economic policy in our time (3 vols.). Amsterdam, Netherlands: North-Holland.

Linder, S. H., & Peters, B. G. (1989). Instruments of government: Perceptions and contexts. Journal of Public Policy, 9, 35–58.

Salamon, L. M. (Ed.) (2002). The tools of government: A guide to the new governance. New York, NY: Oxford University Press.

Stewart, J. (2009). Public policy values. New York, NY: Palgrave Macmillan.

Vedung, E. (1998). Policy instruments: Typologies and theories. In M.-L. Bemelmans-Videc, R. C. Rist, & E. Vedung (Eds.), Carrots, sticks and sermons: Policy instruments and their evaluation (pp. 21–58). New Brunswick, NJ: Transaction.

Page created by: Ian Clark, last modified 1 April 2017.

Image: Behance, Wrench Typology, at https://www.behance.net/gallery/5277353/Wrench-Typology, accessed 1 April 2017.