Public Policy

Abstract

What is the rationale for public policy? From an economic perspective, there must be “market failure,” so that decentralized decision making would lead to a suboptimal result. Three major sources of market failure are (a) imperfect information (e.g., car buyers do not know which product is or is not safe so government sets safety standards), (b) externalities (the consequences of decisions – such as drunk driving – affect third parties), and (c) nonrationality (e.g., graduated driving licenses address adolescents’ inability to drive as safely as older drivers, especially with other teens in the car). When government produces public goods (e.g., roads, playgrounds) it de facto sets policy by making these goods more, or less, safe. Government can also take a lead in promoting safety through its purchases; e.g., the decision of the General Services Administration to demand airbags in their vehicles played an important role in showing the real-world benefits of such passive restraint systems. Three aspects of government regulations are the rules, the monitoring of the rules, and their enforcement. Safety can be compromised by deficiencies in any of these three aspects. Finally, the public health approach to injury prevention policy emphasizes prevention at the population level and applies a systems approach to change the agent of injury and the environment rather than focusing exclusively on the individual (e.g., safer cars and roads, not just safer drivers). A systems approach makes it difficult to make mistakes or behave inappropriately and, when missteps are made, reduces the chances that people are seriously hurt or injured. Actual successes in injury prevention policy are used to illustrate these points.