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Full Description
As a book on public policy, this book is unique in addressing explicitly the role of human nature. Only with a good understanding of human nature can policy makers address their foremost needs and anticipate how people may respond to specific designs in policy. This way policy makers can avoid "unintended consequences." The book also provides a new perspective on the meaning of public interest, which is based on intellectual roots dating back to J.S.Mill and more recently Harsanyi and Rawls.
Traditionally, economists have referred to either the Hicksian criterion or the Kaldorian criterion as the yardstick to whether a policy is welfare enhancing, not realizing that both of these criteria fail abjectly in producing a convincing test for welfare improvement. This is because ex post, typically some people will gain and some people will lose from any policy. The author argues for an alternative, ex ante welfare increase criterion that is based on how people would assess a policy if they were completely impartial and totally ignored their personal interests. It applies the principles to key policy concerns such as health policy, tort law reform, education and cultural policy, and pension reform.
The healthcare reform proposals in the book illustrate the application of the principles. The author proposes a basic protection plan under which standard basic healthcare services are priced the same whether they are provided by public or private caregivers—at levels that can contain both demand side and supply side moral hazard. Annual eligible healthcare expenses are capped to alleviate worries. A "Lifetime Healthcare Supplement" that includes an element of risk sharing adds to patients' choice and protection without compromising fiscal sustainability.
Contents
1. Introduction Part 1. Theory of Public Policy Design 2. What Makes Good Public Policy 3. Human Nature and Public Policy 4. Institutional Policy Choice as Ex Ante Choice Part 2. Microeconomic Risk Management 5. Health Care Pricing and Financing 6. The Rule of Law, Tort Law Reform and Legal Aid 7. Bank Deposit Insurance 8. Demographics and Public Pensions Part 3. Resource Allocation and Redistribution 9. Government or Markets 10. Education and Cultural Policy 11. Taxes, Social Safety Net and Redistribution Part 4. Public Policy and Ecoclogy of Economy 12. Economic Ecology 13. The Gobal Financial Tsunami of 2008 14. The Case of Hong Kong 15. Public Policy in the New Millennium
