public policy: objectives and principles roger kerr new zealand business roundtable
TRANSCRIPT
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Public Policy:Objectives and Principles
Roger KerrNew Zealand Business Roundtable
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“The framework of institutions, laws and programmes laid down by the arms of government (parliament, the executive and the judiciary) that regulate the economy and wider social interactions.”
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Critical issue:
The proper role of government
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SINGAPORESINGAPORE
IRELANDIRELAND
HONG KONGHONG KONG
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Objective of public policy
Human flourishing
- not just about economy, monetary values, efficiency
- encompasses fairness, environmental quality, freedom
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Ideological?
• Should be evidence-based
• Role of economics
• Free trade, school choice, privatisation
• Boundaries of political debate
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Common framework
• Markets vs government
• Invisible vs visible hand
• Need governments to set rules of game
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Market exchanges
Politics/collective choice
Voluntary cooperation
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Voluntary cooperation
Dominant means of getting what we want
• Norm in families, small groups
• Also clubs, associations, charities
• Involves redistribution within families and through altruism
• Works best in ‘face to face’ settings
But can’t run a large society that wayBut can’t run a large society that way
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Market exchanges
Essential for society at large
• Gains from specialisation and trade
• Prices- transmit information- coordinate plans
- markets continuously adjust
• Consumers’ interests paramount
But - market failuresBut - market failures
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Politics
• Voting mechanism is imprecise - candidates, parties, electoral systems, accountability
• Coercion - not mutual benefits, as with markets & voluntary cooperation
• Tyrannies of majorities and minorities
Political market failuresPolitical market failures
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Upshot?
• No ideal yardstick
• Political/government failures routine, not exceptional
Must compare real-world alternatives
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In choosing among real world alternatives
• Focus on incentives
• Bias in favour of economic freedom
Implies limited governmentImplies limited government
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How do we constrain government ?
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How do we constrain government ?
Economic constitutions
Sound processes
• Compensation for Regulatory Takings
• Taxpayer/Ratepayer Bills of Rights
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Public policy and business management
• A country is not a company
• National central planning doesn’t work
• Different skill requirements
• Problems with DIY economics
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Conclusions
Good public policy: institutions that promote human flourishing
There is a significant role for government,
but
• individuals need protection from government abuse
• governments don’t necessarily act in the public
interest
• remedy of government intervention sometimes
makes things worse
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The biggest public policy mistake:
to expect too much of government
The challenge:
how to restrain government to what it does well
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