Saturday, March 05, 2005

A Framework for Policy Analysis
Many years ago, due to a smart and kind student two years my senior, I became involved in highschool debate. I will always be grateful for my good fortune to meet him; it is difficult to exaggerate just how much I learned in three years of highschool debate.

One of the things I learned was a valuable framework to analyze policy proposals. Since I expect to opine about various policies on this blog, here is the roadmap of analysis:
  1. Harm: The status quo has a problem.
  2. Inherency: The Harm will not be solved without a policy intervention (i.e., waiting won't help).
  3. Plan: This is the proposed policy.
  4. Solvency: The proposed Plan will solve the Harm.
  5. Net Benefit: The proposed Plan has more Advantages than Disadvantages compared to either the status quo or another Plan. The Advantages and Disadvantages include the Solvency (solving an Inherent Harm is an advantage), but usually include other consequences of adopting the Plan.
Here is an illustrative example of the framework in practice:
  1. Harm: Deceptive "psychics" prey on the public by falsely advertising "free" phone readings, then threatening collections.
  2. Inherency: State Attorneys General can deal with this problem somewhat, but not if scammers are using non-jurisdictional methods to evade prosecution (e.g., scam via federally regulated means of communication, or by off-shoring).
  3. Plan: Enact federal consumer protection laws and enforce them through a government agency, the Federal Trade Commission.
  4. Solvency: The FTC can bring charges on behalf of the consumers and end the deception.
  5. Net Benefit: The advantages outweight the disadvantages.
    • Advantages:
      1. Harm of fraud on consumers is prevented, and legitimate commerce benefits.
      2. Broader principles of fair trade is reaffirmed, thus increasing legitimate trade.
      3. The reputations of legitimate psychics, if any, will improve and the public will benefit from dependable predictions.
      4. Successful enforcements raise government revenue from levied fines.
    • Disadvantages:
      1. The psychic network is worse off.


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