Selection Of Policy Instruments Research Articles

Optimal policy instrument selection in monetary policy: endogeneity of money supply

Purpose- Nowadays, the central bank's primary objective is price stability which is defined as low and stable inflation. The central bank has to fulfill some institutional and operational conditions to achieve this goal. One of the operational conditions is the selection of the appropriate policy instrument to implement the monetary policy. The central bank can choose interest rate or monetary base as policy instrument. The main question of this paper is whether the monetary base the optimal instrument. The choice of monetary base as a policy instrument is dependent on the exogeneity of money supply, which means that the money supply is controllable by monetary base. Methodology- This paper investigates endogeneity of money supply of Turkey for a sample period of 1990-2016 using Johansen cointegration test. Findings- As a research method, the Johansen cointegration test and VECM is used to show long-run relationships and causality between variables and Granger causality test is used to examine short-run causality between the variables. Conclusion- It is seen that CBRT has very limited control over money supply, thus monetary base may not be optimal policy instrument to ensure price stability.

Blueprints of Effective Biodiversity and Conservation Knowledge Products That Support Marine Policy

Biodiversity and conservation data are generally costly to collect, particularly in the marine realm. Hence, data collected for a given—often scientific—purpose are occasionally contributed towards secondary needs, such as policy implementation or other types of decision-making. However, while the quality and accessibility of marine biodiversity and conservation data have improved over the past decade, the ways in which these data can be used to develop and implement relevant management and conservation measures and actions are not always explicit. For this reason, there are a number of scientifically-sound datasets that are not used systematically to inform policy and decisions. Transforming these marine biodiversity and conservation datasets into knowledge products that convey the information required by policy- and decision-makers is an important step in strengthening knowledge exchange across the science-policy interface. Here, we identify seven characteristics of a selection of online biodiversity and conservation knowledge products that contribute to their ability to support policy- and decision-making in the marine realm (as measured by e.g. mentions in policy resolutions/decisions, or use for reporting under selected policy instruments; use in high-level screening for areas of biodiversity importance). These characteristics include: a clear policy mandate; established networks of collaborators; iterative co-design of a user-friendly interface; standardised, comprehensive and documented methods with quality assurance; consistent capacity and succession planning; accessible data and value-added products that are fit-for-purpose; and metrics of use collated and reported. The outcomes of this review are intended to: (a) support data creators/owners/providers in designing and curating biodiversity and conservation knowledge products that have greater influence, and hence impact, in policy- and decision-making, and (b) provide recommendations for how decision- and policy-makers can support the development, implementation, and sustainability of robust biodiversity and conservation knowledge products through the framing of marine policy and decision-making frameworks.

Energy policy design and China’s local climate governance: energy efficiency and renewable energy policies in Hangzhou

This study probes into climate policy design at city level in China, with Hangzhou’s energy efficiency and renewable energy policies between 2005 and 2014 as a case. The study applies a political action arena approach to accentuate the importance of different normative preferences behind climate change policies in relation to Hangzhou’s emerging urban climate governance regime. Three main categories of policy instruments are identified: i.e. command-and-control, market-based, and collaborative governance instruments, and their development over time is examined. It is concluded that in Hangzhou energy efficiency is a more mature and comprehensive political action arena than renewable energy. The study also finds that there has been a significant shift away from preferences towards command-and-control to more market-based instruments, while cooperative governance instruments are still in their infancy. It finally shows that the design and implementation of local programs, especially the selection of policy instruments, are strongly influenced by the normative preferences of local officials. Thus, the approach of Hangzhou’s government to the design and implementation of climate policies seem to gradually become less authoritarian, more market based, and more accountable, due to the inherent complexity of this political action arena.

Evaluating public policy instruments in the Greek building sector

This paper applies a multi-criteria analysis (MCA) to evaluate public policy mechanisms that foster energy efficiency and renewable energy sources in the Greek building sector, based on stakeholders’ understanding and perceptions of the functionality of policy instruments. The objective is to shed light on the implementation of currently employed policy mechanisms that aim to achieve the 2020 energy savings targets and beyond, providing useful information to policy makers for future policy (re-) formulations. In this framework, policy instruments were evaluated against process-related criteria, such as implementation costs, distributional effects, and coherence of policy processes, so as to highlight successful policy practices during their implementation phase as well as to unveil cases of policy underperformance or unintended policy outcomes. To hedge uncertainties related to policy instrument selection, the method employs probabilistic evaluations of every alternative against each criterion. The MCA results showed that the country is still missing significant energy saving opportunities that could be reached through more streamlined implementation practices and political support. In times of fiscal crisis, the Greek government should also revitalize the implementation of alternative funding mechanisms and support policy alternatives such as green public procurement, voluntary agreements, and energy performance contracting.

Drawing Lessons When Objectives Differ? Assessing Renewable Energy Policy Transfer from Germany to Morocco

Given the tremendous energy challenges Morocco faces, and its potential role as an exporter of green electricity to Europe, the country has been particularly targeted by Germany’s efforts to promote the uptake of renewable energies abroad. This paper explores whether ideas and policies in the field of renewable energy effectively traveled through transfer channels established between Germany and Morocco. In particular, the question of how Morocco’s policy objectives shaped the result of transfer processes is discussed, shedding light on a currently under-researched determinant for policy transfer. Drawing upon forty-five semi-structured interviews with Moroccan, German, and international stakeholders, as well as card-ranking exercises, the article provides first-hand insights into the dynamics and drivers of Morocco’s “energy transition”. Findings presented in the article show that differing policy objectives did not preclude the transfer of ideas between Germany and Morocco, but shaped its outcome with regard to policy instrument selection. While basic policy orientations in favour of renewable energies were facilitated by transferred knowledge, a perceived incompatibility between domestic policy objectives and the policy instruments used in the foreign model led to selective lesson-drawing from the German example. This finding underlines the importance for “senders” who wish to actively promote sustainable energy policies abroad to adapt outreach strategies to the policy objectives of potential followers.

SHIFTING USE OF POLICY INSTRUMENTS FOR ENVIRONMENTAL PROBLEMS: NEW SOUTH WALES, AUSTRALIA, 1979–2010

It is generally accepted that choice and use of environmental policy instruments has changed over recent decades, however this has rarely been investigated empirically. A quantitative analysis of 505 policy instruments to address environmental problems between 1979–2010 in New South Wales, Australia, was undertaken to explore this further, in a jurisdiction reasonably typical of advanced economies. The data do show a shift in the use of instrument types, with the most common type of policy instrument being regulation. However, there was no trend away from regulation as a way of delivering policy outcomes, but a relative strengthening in the importance of newer policy instrument types such as strategy, education, incentives and schemes, compared with foundation policy types including regulation and land reservation. Foundation policies dominated the earlier years and provided significant structural elements of the policy system, including setting up organisations, assigning roles and responsibilities and prescribing rules. The political party holding government at the time does not drive the selection of policy instruments. The methods in this paper could be applied in other jurisdictions or to other policy areas.

The Creeping of Neo-Liberal Influences into Teacher Education Policy: The Case of Hong Kong

Neo-liberal values have pervasive influence on education and teacher education around the globe. By analyzing findings from document analysis and interview with key policy actors as well as reviewing other academics’ work, this article examines the penetration of neo-liberal ideas through policy content, selection of policy instruments, process of policy production and policy outcomes in teacher education in Hong Kong. The study reveals that neo-liberal values have driven large-scale education reforms with English as a key concern and Government’s exertion of greater power to influence teacher education policy in the policy ecology. Regarding entry into teaching, the paradoxical policy content is manifested in the “open market” of teacher preparation, absence of regulatory mechanism in relation to professional standards yet mandatory requirements on language teachers. With the use of “economy” and “mandate” as policy instruments, the Government has exerted greater power to influence teacher education policy. The process of policy production associated with mandatory requirements for language teachers is characterized as a change of approach from “coercion” to “soft landing”. Policy outcomes, including preparation of language teachers and repercussions for the teaching profession, are discussed. While the Hong Kong case adds to understanding of the impact of neo-liberal values through linkages between global trend and local realities, it may provide a narrative for those in other contexts and countries to explore and reflect on local understandings of policy trajectories in teacher education.

A method for the deliberate and deliberative selection of policy instrument mixes for climate change adaptation

Policy instruments can help put climate adaptation plans into action. Here, we propose a method for the systematic assessment and selection of policy instruments for stimulating adaptation action. The multi-disciplinary set of six assessment criteria is derived from economics, policy, and legal studies. These criteria are specified for the purpose of climate adaptation by taking into account four challenges to the governance of climate adaptation: uncertainty, spatial diversity, controversy, and social complexity. The six criteria and four challenges are integrated into a step-wise method that enables the selection of instruments starting from a generic assessment and ending with a specific assessment of policy instrument mixes for the stimulation of a specific adaptation measure. We then apply the method to three examples of adaptation measures. The method's merits lie in enabling deliberate choices through a holistic and comprehensive set of adaptation specific criteria, as well as deliberative choices by offering a stepwise method that structures an informed dialog on instrument selection. Although the method was created and applied by scientific experts, policy-makers can also use the method.

Research on market-based policy instruments for eco-environmental protection

The selection of policy instruments involves policy efficiency and policy effect. Effective settlement of eco-environment problems in the process of industrialization and implementation of active eco-environment protection depend on the innovation of policy instruments. In this paper, based on a descriptive analysis of the policy instruments for eco-environmental protection of our country, combined with the theoretical analysis and the empirical research on current marketization of eco-environmental protection, the authors indicate that eco-environmental problems originate from the damage of eco-environment and the externalities of eco-service, and that the market-based policy instruments which are helpful to balance the relationship between right, responsibility and interest in the eco-service are effective measures to eliminate externalities and protect eco-environment.

Selecting Policy Instruments for Better Environmental Regulation: a Critique and Future Research Agenda

ABSTRACTThere is a lack of evidence on regulatory effectiveness available to support policy makers with the selection of appropriate instruments to deliver better environmental regulation. We identify the types of evidence required to enable regulatory reform, characterize evidence gaps, and explore how these may be filled through future research. A typology of regulatory instruments is presented, and evidence of what has worked when and why is examined, drawing on international experience and recent cases from the United Kingdom (UK). Evidence of the capabilities of good environmental regulators for regulatory effectiveness is lacking, and it is proposed that ethnographic research that captures the nuances of regulatory practice will prove necessary to address this. This paper is of value to policy makers and regulators around the world considering the selection and deployment of the full range of environmental regulatory instruments to respond to environmental risks and in support of economic growth. It can inform the selection of suitable approaches and the design of institutions capable of delivering them. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.

Hard Questions, Hard Solutions: Proceduralisation through Impact Assessment in the EU

An important proposition in public policy analysis is that the design and selection of policy instruments is a manifestation of power relations; in other words, ‘politics determines instruments’. However, except where it degenerates into tick-the-box routines, instrumentation can also generate its own political effects at the implementation stage – the ‘instruments determine politics’ argument. Examining the impact assessment (IA) element of the EU's Better Regulation agenda of the European Union, this article argues that procedures and meta-instruments are chosen by policy-makers when there is disagreement on fundamental issues of power. Policy-makers activate meta-instruments that do not address fundamental issues directly, but change procedures of policy formulation. In so doing, however, they create a new structure of opportunity, which produces its own effects on politics. Our findings point to unintended effects of IA, such as administrative coordination and organisational learning, as well as strengthening of the Commission Secretariat General.

Instruments and Intentionality: Civilian Crisis Management and Enlargement Conditionality in EU Security Policy

This article applies a public policy instrumentation approach to two instruments of EU security policy – civilian crisis management and enlargement conditionality. Both have come to be portrayed, by policy-makers and observers alike, as deliberate and efficient responses to specific policy challenges. Our analysis of the processes behind their adoption challenges such claims. In a complex institution like the EU, and in a sensitive sector like security, the development of new policy instruments requires negotiation within dense institutional settings. The resulting instruments do not necessarily match the initial intentions of their creators. The focus on unanticipated – albeit in retrospect not necessarily undesired – consequences in the development of the instruments of EU security policy also contributes to the broader research agenda on policy instruments, which problematises the selection of policy instruments yet nevertheless tends to perceive them as part of a deliberate strategy of policy change.

Canada’s constitutional separation of (wind) power

This paper investigates the impact that a federal government structure has on strategic selection of renewable energy policy instruments. The context for this study centers on wind power development in Canada. Canada is a nation that is blessed by all the attributes necessary to catalyze global leadership in installed wind power capacity. Unfortunately, the constitutional separation of powers that underpins Canada’s federal system impedes the creation of a national wind power development strategy because Canada’s provinces have constitutional authority over electricity governance. The insights gleaned from the case study are used to develop a conceptual framework for understanding the impact that federal structure has on policy instrument selection and efficacy under areas of federal, regional and concurrent policy jurisdiction. Finally, this framework is re-applied to identify specific approaches the Canadian federal government could take to resolve what currently amounts to be a fragmented, ineffective approach to wind power development planning.

The Real but Limited Influence of Expert Ideas

A number of influential studies in political science argue that important economic policy changes in the rich democracies since the mid-1970s were caused by the introduction of new economic ideas. This article claims that while experts exert strong influence over the selection of policy instruments, their influence over the formulation of policy objectives is much weaker. In the 1970s, 1980s, and 1990s, the predominance of Keynesianism in Austria and Denmark did not lead Austrian and Danish governments to maintain low unemployment longer than Sweden, where Keynesianism was less strong. But it did lead them to regard fiscal policy as an instrument that can be used to control the level of activity in the economy, while their Swedish counterparts relied instead on exchange rate and monetary policy.

The level and composition of tax revenue in developing countries: Evidence from unbalanced panel data

Tax reforms in developing countries must necessarily include changing the level of tax revenue and/or its composition. In this connection, we specify models for total tax revenue and its components and estimate them using an unbalanced panel of developing countries over the period 1973–2002. A general finding is that some variables affect both the level and composition of total tax revenue while other affect its components in opposite directions rendering their net effects on the revenue level statistically insignificant. This distinction underscores the need for selecting policy instruments with an eye on the way they might affect individual tax types.

Green electricity market development: Lessons from Europe and the US

This study compares the development and implementation of green electricity policies in Germany, the Netherlands, Sweden, and the United States, a set of countries applying a range of policy instruments to encourage electricity from renewable energy sources. A general tendency is identified that policies shift emphasis from R&D stimulation towards dissemination and market application of renewable energy technologies. We argue that in light of the long term nature of policy goals on energy security, mitigation of climate change, and environmental protection, the applied range of policy instruments may be lacking in providing incentives for the long term development of new technologies. Clarifying policy objectives would allow careful selection of policy instruments, including support for R&D. Improved capacity building for policy implementation is also important.

Identification of public objectives related to agricultural sector support

The Common Agricultural Policy (CAP) is a widely debated policy in terms of both its budget and its instruments. In order to serve the citizens of Europe properly, CAP requires optimal identification of the public objectives desired. This paper aims to analyse the relative weights that citizens assign to the various potential objectives of the CAP and to show how these can be used to improve the selection of policy instruments. As a means of identifying social preferences we used the Analytical Hierarchy Process (AHP) technique on a population sample in Castilla y León (Spain). Results show how the current policy decision process lacks mechanisms capable of identifying social preferences and thus leading to the choice of sub-optimal policies.

Review - Thomas Sterner (2003): Policy Instruments for Environmental and Natural Resource Management

Summary RFF Press, Washington D. C. ISBN 1-891853-12-0 As research in environmental policy has accumulated, and the number of applications of policy instruments for environmental and natural resource management has grown, so has the arsenal of different instruments available for the policy maker. This development has continued up to a point where it now becomes difficult for the individual researcher or policy maker to survey this vast field. With this in mind, there are many that have reason to be grateful for Thomas Sterner's effort in his new book, Policy Instruments for Environmental and Natural Resource Management . This book not only details the economic principles behind environmental policy, but also presents a wide range of examples of practical policy design in areas such as road transportation, industrial pollution and the management of natural resources and ecosystems. In the preface Thomas Sterner states that the book is intended for academicians, like university professors, graduate and undergraduate students, as well as analysts who advice policy makers. In particular, the book turns towards people of these categories in countries who have not to date made extensive use of market-based policy instruments. Presumably, this includes countries in the developing world and former planned economies. The book is non-technical in the sense that only a small amount of mathematical formulas are presented to not deter reader with a less solid background in maths. The book is divided into seven sections. The first part (entitled: The Need for Environmental and Natural Resource Policy) details the causes behind environmental degradation and introduces important concepts in environmental economics, such as externalities and public goods. The section also gives an outline of bioeconomics and the evolution of rights. The material is similar to other textbooks, and should be well known to the environmental economist. Part 2 (Review of Policy Instruments) presents the most important policy tools in the economists tool box, including direct regulation, taxes, tradeable permits, subsidies and property rights related instruments. This material is presented in an accessible, non-technical manner. Part 3 (Selection of Policy Instruments) concentrates on how to choose between different policy instruments, taking into account aspects such as efficiency, uncertainty, equilibrium effects, cost distribution, etc. This section should be particularly useful for analysts who advice policy makers. The information in this section is also neatly summarized in a “Policy Selection Matrix” in Chapter 18. In Parts 4, 5 and 6 the book becomes really unique and interesting for an academic audience. In these sections the author analyses a wealth of examples of policy design in areas such as road transportation, industrial pollution and the management of natural resources and ecosystems. Part 4 (Policy Instruments for Road Transportation) describes the policy experience in areas such as road pricing, fuel taxation and vehicle standards. In Part 5 (Policy Instruments for Industrial Pollution) the attention is turned to a “classic” area for environmental policy. The examples from both developed and developing countries are numerous. Policies for natural resource management is the focus of Part 6 (Policy Instruments for the Management of Natural Resources and Ecosystems), which deals with water, waste, fisheries, agriculture, forestry and ecosystems. Readers of JFE are perhaps most interested in the chapter on forestry (Chapter 30), and I would have to argue that this chapter is rather short, although that cannot be regarded as a major shortcoming of the book as a whole. However, a reader with a deeper interest in forest policy might want to complement with the book by Boyd & Hyde (1989). What then can be said about the usefulness of the book for its intended audiences? Well, for at least one of the intended audiences, analysts who advice policy makers, this book is simply indispensable. It is also very useful as a reference text for researchers who specialize in environmental policy. I would perhaps not suggest this book as a textbook for undergraduate students, partly because of its sheer size and partly because the wealth of examples diverts attention from the need for undergraduates to focus on basic economic principles. It's better suited for graduate students, but then I would supplement it with a more technical volume, such as the book by Baumol & Oates. Overall, my impression is that the main field of application of the book is as a reference text on environmental policy instruments, and it should be of particular interest for people in developing countries and former planned economies. For the forest economist interested in forest policy the forest chapter feels somewhat like an appetizer, but the book gives a good opportunity to learn about policy instruments applied to other areas that could be applicable to forest related problems. Put simply, a good source of inspiration. Goran Bostedt Deptartment of Forest Economics Swedish University of Agricultural Sciences Umea

The Selection of Policy Instruments: a Network-based Perspective

The concepts of policy instruments and policy networks have played important roles in recent theoretical development on public policy, as research in several nations attests. These notions, however, have largely been considered in isolation from each other. Here a simple typology of policy networks is used to help explain the selection of different kinds of instruments by governments. Several instrument characteristics are considered for the expected impact of network features on instrument selection, and a set of propositions is developed that matches degrees of network interconnectedness and cohesion with the choice of different kinds of instruments – such as regulations, subsidies, and covenants. Examples from different national and policy-sectoral contexts are used to indicate the plausibility of the argument. The article suggests that considering network attributes can be useful in understanding governments' choice of instruments and can strengthen extant discussions largely focused on such variables as learning and policy style.

Selecting Policy Instruments: Neo-Institutional and Rational Choice Interpretations of Automobile Insurance in Ontario

AbstractThe rational choice model of politics, which construes important political processes as a series of choices taken by self-interested political actors, has dominated theorizing on the subject of policy instruments in Canada. While useful, this approach is nonetheless limited by its narrow conception of rationality and its inattention to the context of instrument choice. As an alternative, the neo-institutional approach offers a perspective on political choice that takes better account of contextual and organizational factors. In this article, the logic of both approaches is used to explain the policy process in the case of automobile insurance in Ontario. The purpose of this exercise is exploratory, not confirmatory. Both approaches do, in fact, offer plausible explanations for the creation of a rate review board, the retention of fault-liability as the basis of compensation and the apparent rejection of public automobile insurance. However, the study concludes that it is essential that research strategies in the realm of instrument choice incorporate insights from the neo-institutional approach.