Page79

DistinguishBetweentheFunctionsEachoftheElementsPerformsandtheMethodsUsedtoPerformThem
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

NotethatinmycharacterizationofmilestonepaymentstocontractorsIspokeofelementssuchasdefiningmilestonesandverifyingclaimsofachievementfunctions
tobeperformedbutleftthemethodsunspecified.AndincharacterizingtheessenceofthehighexpectationswelfaretoworkprogramIreferredto"creatinga
certainkindofpsychologicalenvironment"withoutspecifyingthemethods.Itisgenerallydesirabletousethisfunctionalcharacterizationoftheelementsthatgoto
makeupapracticeandthustoleaveopentolocaloptionexactlyhowtocarrythefunctionsout.Inotherwords,thefunctionalcharacterizationworksasastatement
atanabstractlevelofanendorresulttobeachievedbysomecomponentwithinafunctioningsystem,anditavoidstyingthedefinitionofthepracticetoexactlywhat
thatcomponentmustlooklike.Alinguistichint:Tocharacterizefunctions,usegerundsthatis,verblikenounsendinginingasIdidabovewithdefining,verifying,
andcreating.

Theexceptionstotheprincipleofrelyingonfunctionallanguagearisewhenyoureallyneedorwanttospecifyaparticularmethodforcarryingoutafunction.Inthe
milestonescaseIintentionallyreferredtoacontractasaspecificmeansofdefiningexpectationsamongthepartiesandtodocumentsasameansofattestingthatthe
milestoneshadbeenmet.

AllowingforVariationandComplexity

CharacterizationShouldbeGenericandFlexible,notPrescriptiveandOverlyPrecise

Considertheexpenditurecontrolbudgetdescribedearlier.Isthe"practice"theregivingallthesavingsbacktothedepartment,orwould,say,50percentqualify?If
theideaistoprovideincentivestospendwisely,probably50percentwoulddo.Probablythebestcharacterizationwouldbe"allowingthedepartmenttoretain
enoughofthesavingsforthemtofeelmotivatedtocreatethesavingsinthefirstplace."11Itwouldbeleftuptowhoeverimplementstheexpenditurecontrolbudgetto
determinewhatenoughmeansinthelocalcontext.

Iwouldalsosaythatitshouldbelefttolocalimplementerstofigureoutthedetailsofthegenericpracticethatmakesenseintheirowncontext.Allowingforlocal
adaptationofnonessentialelementsnotonlyservescommonsensebutalsoencouragesgreaterbuyinbylocalsofapracticethatinsomesenseisbeingimportedfrom
elsewhereor,worseyet,imposedfromoutside.

11.Notethatthisisaninterpretationassertedbytheresearcherobserver,notnecessarilysomethingthathasactuallybeendoneinpracticeorendorsedbyanypractitioners.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page80

CharacterizationoftheEssentialElementsofaPracticeisnotNecessarilySimpleItCouldbeComplex
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

Inmylistofexamplesofcandidatesmartpractices,Iincludedonlyrelativelysimplepractices,soasnottocauseconfusion.However,somesmartpracticesare
multifaceted,complex,andnoteasytosummarizeinafewsentencesorevenparagraphs.MichaelBarzelayanalyzedwhathecalledthe"postbureaucraticparadigm"
formanagingstatewideoverheadandcontrolfunctionsinMinnesotastategovernment.Heconsideredtryingtoreducethemanyaspectsofthispostbureaucratic
paradigmwhichIwouldalsocallasmartpractice,albeitaverylargepracticetoafew"coreideas"suchas"service,"''customerfocus,""quality,""incentives,"
"creatingvalue,"and"empowerment."But,heconcluded,"themajorconcepts...arenotorganizedhierarchically,withonemasterideaatthetop."Instead,weare
workingwith"anextendedfamilyofideas."12

Arelatedmanagementreformparadigm,calledbymanythenewpublicmanagement(NPM),emergedinNewZealandinthemid1980sandisalsoan"extended
family"ofideasandpractices.Oneobservernotesthatit"isnotreducibletoafewsentences,letaloneaslogan"andgoesontostateits"keyideas":

Governmentshouldprovidehighqualityservicesthatcitizensvalue

Theautonomyofpublicmanagers,particularlyfromcentralagencycontrols,shouldbeincreased

Organizationsandindividualsshouldbeevaluatedandrewardedonthebasisofhowwelltheymeetdemandingperformancetargets

Managersmustbeassuredthatthehumanandtechnologicalresourcestheyneedtoperformwellwillbeavailabletothem

Publicsectormanagersmustappreciatethevalueofcompetitionandmaintainanopenmindedattitudeaboutwhichservicesbelongintheprivate,ratherthanpublic,
sector.13

SpecimensofaSmartPracticeintheRealWorldLookRatherDifferentfromOneAnotherandRequireCarefulInterpretation

Youshouldtrytofindmultipleexemplarsorspecimensofasmartpracticetogetasenseofitsrobustnessandefficacywhen(1)itisbeingimplementedunderdifferent
supportive(orantagonistic)conditions,(2)itcomeswithdifferentoptionalfeaturesattached,and(3)itemployssupposedlyequivalentbutneverthelesssomewhat
differentmeanstoperformtherequiredfunctions.Ideally,youwouldbeabletofindsocial
12.MichaelBarzelay,BreakingthroughBureaucracy:ANewVisionforManaginginGovernment(Berkeley:UniversityofCaliforniaPress,1992),11517.
13.Borins,InnovatingwithIntegrity,9.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page81

scientificevaluationstudiesofpracticesthatwouldsupplybothdataandtheoreticalinterpretationregardingsuchmatters.Inmostcases,however,suchevaluationswill
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

notexist.Normallyorperhapsatbestyouwillfindswritingsorspeechesbypractitionersdescribingsuccessesinafewplaces,accompaniedbyonlysketchy
descriptionsofwhatwasdoneorthedifficultiesofimplementation.Youwillneedtothinkveryhardandreasonverycarefullyabouthowyouwillwantto
conceptualize(thatis,define)thesmartpracticeofinterestandtoassessthesupportrequirementsyouthinkarethemostimportant.Youneedtodothisevenbefore
yougettothinkingabouthowthepracticemightworkintheparticularcontext(s)youhaveinmindseethediscussionheaded"ButWillItWorkHere?"

GenericVulnerabilities

Itshouldbepartofstandardprofessionalpracticeindescribingsmartpracticestoexplainnotonlyhowandwhytheyworkbutalsohowandwhytheyfail,collapse,
backfire,andgenerallymakepeoplesorrytheyevertriedthem.Thatis,weshouldbetoldthenatureoftheirgenericvulnerabilities.Agenericvulnerabilityisa
potentialweaknessofthepracticethatissomehowconnectedwithitsbasiccausalstructure.Itmighthavetodowithahighsensitivitytosmallerrorsinexecution.Or
itmighthavetodowiththeenvironmentinwhichthepracticeisbeingimplemented(e.g.,anenvironmentthatmightimposecertaininsupportablestresses).

Ofcourse,allpoliticalandimplementationenvironmentsarestressfultoacertaindegree,andwecanreasonablyincludeinthe"essential"definitionofaparticular
smartpracticethosefeaturesnecessarytosafeguarditagainstthemorepredictableandpotentiallydamagingstresses.Withoutsuchsafeguardsanotherwisesmart
practicecouldbecomeaverydumbpractice!Forinstance,ifprivatizingcertainmunicipalservicefunctionsisasmartpracticewhenwouldbeprivatesuppliers
operateinacompetitivemarket,itmightbecomeaverydumbpractice:ifitweretobecarriedoutinanenvironmentmonopolizedbyasinglesupplierifthebidding
processisverycorruptibleandcorruptinterestsweretodiscoverthisfactifinappropriateperformancemeasuresweretobestipulatedinthecontractorifthe
municipalcontractmanagementprocedureswereoverlyrigidoroverlylax.Totakeanotherexample,ahighexpectationswelfaretoworkprogramisvulnerableto
theconditionofthelocallabormarket.Ifunemploymentishighandjobsarescarce,highexpectationswillproduceinparticipantsmoredefeatismaboutthemselves
andmorecynicismaboutthe"responsibility"thatsocietyisurgingonthem.Agovernmentneighborhood"partnership''regardingparksis,inagenericsense,vulnerable
to,amongotherthings,temptationson

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page82

thepartofpolicymakerstoslowlyshiftmoreandmoreburdensontoneighborswhilereallocatingbudgetaryfundstootherdepartments.
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

Genericvulnerabilitiesareonlythepotentialfortrouble,itshouldberemembered.Whetherthetroublesactuallymaterializedependsonthenatureofthelocal
environmentinwhichthesmartpracticeisimplementedandonthesuccessofvariouspartieswhoareawareofthevulnerabilitiesindesigningandimplementing
successfulcountermeasures.Contractingprocesses,forinstance,canbedesignedtominimizecorruption,albeitatsomecost.Andneighborsenteringintoa
partnershipwiththecityregardingparksmaintenancemightinsistonputtingthetermsofthepartnershipinwritingandholdingawellphotographedpressconference
toannouncethem.Evenifsuchadocumenthadnolegalstanding,itwouldgiveneighborhoodrepresentativesinlateryearssomeusefulpoliticalleverage.

Twoparticulartypesofvulnerabilityareespeciallyworthattendingto.Onepertainstolikelyfailuresofgeneralmanagementcapacity(e.g.,alowgenerallevelof
leadershiptalentorthelackofa"goodgovernment"ethosthatwouldmakeiteasiertoimplementthisoranyotherpracticesuccessfully).Theotherpertainsto
weaknessesintrinsictotheparticularpracticeitself(e.g.,asusceptibilitytoconflictinsomeservicedeliveryprogramoverwhethertogiveprioritytothisorthat
catchmentareaorneedysubpopulationor,insomesafetyorientedregulatoryprogram,whethertoerronthesideofinjurytolerantleniencyorcostlystringency).

ButWillItWorkHere?

Assumingthatyouhaveunderstoodtheessenceofthegenericsmartpracticeverywell,includingitsgenericvulnerabilities,andhavemappedthevarietyofsupportive
elementsthatcouldincreaseitsoddsofsuccess,intheend,youmuststillask:Assumingthispracticeisindeedsmartinsomecontexts,isoursacontextinwhichitcan
workwellenoughtowarranttryingit?Answeringthisquestionintelligentlyentailslookingatboththesourcecontexts,wherethepracticeappearstohaveworked
well,andatyourowntargetcontext,whereitisbeingconsideredforadoption.

TheTargetContext

Withinyourtargetcontext,acarefulassessmentofthepresentsituationisinorder,ofcourse,butastaticanswerbasedonthisassessmentisnotenough.Youneedto
thinkalsoaboutwhatmightbedoneatreasonablecostorrisktoimprovetheprospectsofthesmartpracticeinthetargetcontextwereittobeimplemented

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page83

there.Theseactionsfallintotwocategories:possiblesafeguardingstrategiesandpossibleenhancementstrategies.
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

First,considersafeguardingstrategies.Thesehavetodowiththegenericvulnerabilitiesofthesmartpractice.Arethemostdangerousofthemlikelytocause
unacceptabletroubleinyourcontext?Forinstance,ifexcessiverigidityinthecontractmanagementprocessisagenericvulnerabilityofpartneringwithanonprofit
agency,areyourcontractmanagementinstitutionsknowntobeunusuallyrigid?Andifso,isthereanythingyoucandotooffsetthisproblem?Mightyou,forinstance,
findsomeoneinthecontractmanagementbureauwhocanserveasaspecialprotectorandexpediter?Orifyoucannotdothat,canyoufindsomewaytostructurethe
contracttermssothatthecontractorisheldaccountableforachievinggeneralresultsratherthanforfollowingspecificprocedures?

Regardingenhancementstrategies,considerwhatIhavecalledabovethesupportiveelementsthatcanhelpapracticeworkrelativelybetter.Whatsupportive
elementswillbeputintoplay?Howwellaretheylikelytoperform?Canyoudoanythingtoimprovethem?Forinstance,canyouattracttopnotchpersonnelto
managethisprogramorundertakethisproject?Canyouobtainmorestablefundingthanannualappropriations?Canyoumobilizethepresstotakepositivenoticeof
whatyouaredoing?Canyoucountonthesupportofkeystakeholdersandrelevantpoliticalconstituenciesoratleastonweakactionfromopponents?

TheSourceContexts

Ifyouhavetosearchveryhardforsmartpracticesthatmightbeusableinyourownsituation,thechancesarethatthepracticewillnotbeverywidespread.This
meansthatthespecimensyoulocatewillcomefromjurisdictions,agencies,orlocaleswherepolicymakersandadministratorstendtolookmorefavorablyonnovelty
andinnovationthanisusuallythecase.Hence,theiroverallmanagerialcapacitymaybebetterthanaverage,andperhapsbetterthantheoneinyourownlocale.

Ifthesourcecontextsarelargelypilotordemonstrationprograms,youneedtobeparticularlycautious,because

Pilotprogramimplementersprobablybringmoreenthusiasmandtalenttobearontheirworkthantheaverageprogramimplementers,andenthusiasmandtalent
countforsomething.

Thepoliticalandfinancialconditionsatthepilotsitesareprobablymorefavorable(orlessunfavorable)thanthoseattheaveragesite.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page84

Bureaucraticresistancetoapilotistypicallylessintensethantoapermanentchangethatthreatensexistingvalues,status,jobsecurity,orworkroutines.
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

Howcautiousshouldyoubeinextrapolatingfromsuccessesobservedinpilotordemonstrationcontexts?Nosystematicresearchexiststoanswerthisquestion.
However,aRANDCorporationanalysisofavarietyofjuvenilecrimepreventionprogramsdiscountedtheeffectivenesslevelsattainedinthepilotcontextsby15to
40percentwhenestimatinga"scalinguppenalty"thatwouldapplywhenimplementingtheprogramsonawidescale.14AlthoughtheRANDanalystsofferedno
explicitreasoningforchoosingthepenaltyfactorsthattheydid,theirchoicesdoseemreasonable.

Ifyouareanalyzingthepossibilityofimplementingasmartpracticenotjustinsomeknownlocalcontextbutonawidescale,youshouldbeconcernedaboutmore
thanthefactthatpilotprogramresultsmaybemuchbetterthanaverage.Youshouldalsobeconcernedabouttheexistenceofmanybelowaveragesiteswherethe
smartpracticewouldbeimplemented,someofthemperhapsquiteabitbelowaverage.Inanerawhenitwasmuchlessnaturaltothinkaboutthefederaldevolution
ofprogramandpolicyresponsibilitiestostategovernmentsthanitistoday,federalpolicymakers,particularlypoliticalliberals,oftenworriedaboutthe"Mississippi
problem."Mississippiwastherhetoricalsymbolofthepoor,backward,andprobablyracistjurisdictionthatwouldalmostsurelywreckorpervertanysmartpractice
itwasgivenresponsibilityforimplementing.

BacktotheEightfoldPath

Giventhetypicalshortfallofgoodevidencerelativetotheoryandspeculationwhenitcomestoassessingasmartpractice,thereisadangerofunwarrantedoptimism.
Nowonderacommoncriticismofthebestpracticeresearchtraditionisthatitbecomesexcessivelyenthusiasticaboutwhatappeartobegoodideasbeforetheir
worthissufficientlytested.15

Buthowmuchtestingis"sufficient,"anyway?Theanswerhastobeframedpartlyintermsofthecostsofdisplacingwhatmightactuallybeabetterpractice,perhaps
eventhepracticescurrentlyinuse(calledabove,"lettingpresenttrendscontinue").However,ifoneisreasonablyconfidentthatcurrentpracticesare

14.PeterH.Greenwood,KarynE.Model,C.PeterRydell,andJamesChiesa,DivertingChildrenfromaLifeofCrime:MeasuringCostsandBenefits(SantaMonica,Calif.:RAND
Corporation,1995).
15.Unfortunately,excessiveenthusiasmforexperimentsthateventuallyfailgivesevenappropriateenthusiasmforexperimentationabadname.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page85

ineffectiveand/orharmful,thecostsofwronglyabandoningtheminfavorofthenewanduntriedmaynotbesohighafterall.Thus,althoughthenewanduntiredshould
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

bearsomeburdenofproof,itshouldnotbeanexcessiveone.Thecorrectapproachistotreattherisksanduncertaintiesinvolvedinadoptingsomeseeminglysmart
practiceasbeingonaparwiththeuncertaintiesassociatedwithalltheotheralternativesunderconsideration.

Ofcourse,thecostsofchangenegotiation,insecurity,hardfeelings,andsoonmustalsobecountedagainstbringinginanewandseeminglysmartpractice.But
suchcostsmustbecountedagainstanychange,notjustchangetoaccommodatesmartpractice.Moreover,ifinstitutionsandpeopleareverystuckintheirways,
theremaybebenefitstochangeassuch,notmerelycosts.16
16.Alternatively,ifinstitutionsandpeopleareforeverbeingreformedandreinventedandremodeledasoccursinmanypublicschoolsystemstheremaybebenefitsto
stability,consistency,andfocus.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page87
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

APPENDIXA
THINGSGOVERNMENTSDO
Thefollowinglistof"thingsgovernmentsdo"ismeanttostimulatecreativityandgiveyouideas.Thewaytouseitistothinkaboutyourpolicyproblemandthengo
downthelist,askingyourself,"Mighttherebeanywaytousethisapproachonthisproblem?"

The"whyyoumightdoit"discussionthataccompanieseachlistof"whatyoumightdo"isnecessarilybrief.Itisintendedprincipallytobesuggestive.

I
Taxes

A
WhatYouMightDo

1.Addanewtax

2.Abolishanoldtax

3.Changetaxrate

4.Changetaxbase

5.Improvecollectionmachinery

6.Taxanexternality

B
WhyYouMightDoIt

Themostcommonconditionsinwhichtaxesareasolutionarewhenthereisinadequategovernmentrevenueforsomepurposeandprobablymoreimportant
whenthestructureofmarketpricesfailstocapturethetrueeconomicopportunitycosts.Ifmarketpricesarewrong,thereareusuallydeeperstructuralreasons,like
oligopolisticpowerorgovernmentoverregulationofsomeinput,whichmightbearcorrectingbyothermeansaswell.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page88

Naturally,toomanytaxescanalsobeaproblem.Theymaybeinhibitingusefuleconomicorsocialactivity.
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

II
Regulation

A
WhatYouMightDo

1.Addanewregulatoryregimeorabolishanoldone

2.Writenewstandardsorremoveoldones

3.Tightenorloosenexistingstandards

4.Improvescientificandtechnicalbasisforwritingstandards

5.Closeoropenloopholes

6.Add,train,orbettersuperviseenforcementpersonnel

7.Improvetargetingofenforcementtocatchbadapples,ortoincreasedeterrence,ortoincreaseresourceefficiency

8.Raiseorlowerlevelofeffectivesanctions

9.Tightenorloosenappealsprocedures

10.Changereportingandauditingprocedures

11.Add,subtract,orimprovecomplaintmechanismsforworkersorpublic

B
WhyYouMightDoIt

Distinguishthreequitedifferenttypesofregulation.Oneaimsatpricesandoutputsinnaturalmonopolies.Thepublicutilitiescommissionregulatinglocaltelephone
serviceisanexample.

Asecondtypesometimescalledsocialregulationiscommoninregardtohealthandsafetyissues.Itaimstocorrectimperfectionsarisingfrompoormarket
informationorfromexcessivefrictionsresultingfromtheuseofcivillaw(usually,tortorcontract)remedies.DrugsafetyregulationbytheFDAisanexample.Inthis
typeofregulation,twosortsofproblemsarecommon:toolittleandtoomuch.Scientificuncertainties,technicaldifficultiesofmeasurement,andpoliticalpressures
typicallyleadtobothoftheseproblemsundervaryingconditions.

Athirdtypeofregulationconcernsentry,exit,output,price,andservicelevelsinsupposedlyoligopolisticindustries(e.g.,transportation).Administeringthistypeof
regulationpresentslargeproblemsofinformationcollectionandofcoordinatingtheoutputsofmanyfirms.Politicallythereareoftenproblemsofanticompetitive
"capture."Thederegulationmovementsincearound1978hasledtoanewappreciationofhowmuchbeneficialcompetitiontheremightbeintheseindustriesif
governmentweresimplytoletgo.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349
 Page89

Mostairandwaterpollutionregulationisthoughtofassocialregulation.However,administratively(andsometimespolitically)itismorelikethethirdtypeof
Copyright 2000. Chatham House Publishers, Seven Bridges Press. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S.

regulation,inasmuchastheprincipallawsnowonthebooksinvolvegovernmentagenciesincoordinatingtheoutputsofavarietyoffirms.

III
SubsidiesandGrants

A
WhatYouMightDo

1.Addanewone

2.Abolishanoldone

3.Changethelevel

4.Changethemarginalrate

5.Introduce,abolish,orchangeaformulabywhichsubsidiesareallocated

6.Modifytheconditionsofreceiptoreligibility

7.Loosenenforcement

8.Tightenenforcement

B
WhyYouMightDoIt

IncentiveEffects

Subsidiesandgrantsareoftenusedtostimulateactivitiesthatneithermarketsnornonprofitnorvoluntaryactionappearstoproduceinadequatequantityorquality.
Theyalsoplayanimportantroleinthesystemofintergovernmentalrelationships,whenonelevelofgovernmentwishestoencourageanotherlevelofgovernmenttodo
certainthings.Theyalsoplayaroleinthesystemofrelationshipsbetweengovernmentsandnonprofitorganizations.

WealthEffects

Grantsandsubsidiesalsotransferresourcestopeopleororganizationsorlevelsofgovernmentinordertomaketherecipientswealthier.

SomeDesignProblems

Itoftenhappensthatyouwanttocreateincentiveeffectsbutnotwealtheffects,orviceversa.Forinstance,youmightwishtomakepoorpeoplewealthierviagrants
andsubsidiesbutwithoutdiminishingworkincentives.Oryoumightwishtoencouragebusinessesoruniversitiestoundertakemoreresearchanddevelopmentofa
certainkindbutwithoutundulyenrichingthemorallowingthemtousethesubsidiesinefficiently.

Notethatsubsidiesandgrantsaretypicallyadministeredwithvariousguidelinesorconditionsattached.Thethreattoremovealongtimegrantorsubsidyforviolation
oftheguidelinesorconditionscanactasatypeofregulatorysanction,therefore,makingcertaingrantsandsubsidiesintoapeculiarregulatoryhybrid.

or applicable copyright law.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 9/6/2016 12:45 AM via CARNEGIE MELLON UNIV
AN: 35223 ; Bardach, Eugene.; A Practical Guide for Policy Analysis : The Eightfold Path to More Effective Problem Solving
Account: s8368349