The Public Life of Economic Incentives

Abstract

Many current proposals for policy reform call for the use of economic incentives. The growing application of economic incentives in a number of policy areas necessitates continuing critical examination of the claims for and the criticisms of their use. Early empirical evidence on the implementation of incentive schemes serves to shed light on the validity of some of the supporting and opposing arguments. By continuing the assessment of the viability of economic incentives, this study reveals that incentive alternatives face obstacles to use stemming from implementation problems, but political and philosophical issues pose greater threats. Nevertheless, the use of incentives can best be defended on political and moral grounds. Political resistance can be overcome and incentives can be employed effectively, if incentive schemes are understood as fostering one form of social interaction in a mixed regime.

Using Multiple Criteria To Evaluate Public Policies

“…Elkin and Cook (1985), Mantell (1985), and Kelman ( 1981 ) have all pondered why it is that the market incentives approach in environmental policy (i.e., a tax on pollution) is not adopted by government when most analysts regard it as theoretically the most efficient means of reducing pollution. They conclude that at the present time this approach is not only technically difficult, but politically infeasible.'…”

“…They can be divided into (1) attempts at classifying policies into different categories (i.e. distributive, redistributive, and regulatory as in Lowi 1964;Salisbury 1968;Uslaner 1985); (2) quantitative analyses of factors related to policy expenditures and other outputs across cities, school districts, states, and nations (as in Cnudde and McCrone 1969;Hofferbert 1966;Lewis-Beck 1977;Lineberry and Fowler 1967;Sharkansky and Hofferbert 1969;Rossell and Crain 1982;Rossell 1990aRossell , 1990b; (3) qualitative case studies of one or more policy areas (as in Kirp 1982;Elkin and Cook 1985;Mantell 1985;Kelman 1981;Edmonds and Reilly 1985;Wilson 1984;Hochschild 1984;Rodgers 1986;Levitan 1985;Marmor 1983;Cochran et al 1990;Heidenheimer, Heclo, and Adams 1990); (4) case studies of the implementation of public policies and analyses of the factors likely to lead to successful implementation (as in Pressman and Wildavsky 1973;Mazmanian and Sabatier 1989); (5) theories of the policy process that describe policy subsystems and institutional frameworks in universal terms that can be applied to different policy areas (as in Hofferbert 1977;Kingdon 1984, Kiser and Ostrom 1982;Sabatier 1991b); (6) theoretical works on the field itself (as in Bobrow and Dryzek 1987;Sabatier 1991a) and critical assessments of its important concepts (most recently, Stone 1988); and (7) a host of studies of the policy-making process that differ little from what used to be called poli...…”