The Instruments of Government - Peters Ch. 1

The second question Peters attempts to answer is "What tools or instruments does government have at its disposal?" Peters lists six major policy instruments that government can use to distribute benefits and burdens to groups and individuals.

The first instrument is law. Laws are probably what you thought of when you considered the definition of public policy. According to Peters, laws are "authoritative decrees" (p. 7). Unlike the other instruments of public policy, only a legitimate government can make laws. The more legitimate a government is perceived to be, the less authority is necessary to make sure that individuals obey the laws. During the Arab Spring, we saw quite a few governments whose citizens deemed them to be illegitimate, we also saw these regimes attempt to enforce their laws through extreme force. In contrast, most of us obey the laws of the United States, even when we are not being observed and coerced. This is because most Americans view their government as legitimate, even when they disagree with its policies. Laws can either confer rights or prohibit actions. Sometimes these are basically the same thing. For example, the Voting Rights Act of 1965 gave the right to vote to all citizens over the age of 18 by prohibiting states and counties from barring people of color from voting. To ensure rights for one group, they had to prohibit the actions of another group.

Government also provides direct services, although this is becoming less common in the United States, as government often contracts with for-profit and non-profit organizations to provide services. Still, there are two major areas of public policy where government continues to provide direct services: education and defense. Many have argued that the government is not the most efficient provider of services, so we are even seeing the privatization of these major areas of government provision.

Government increasingly provides its citizens with money. Usually, this is accomplished through tax credits. Paradoxically, the distribution of money directly to citizens can be considered inefficient and efficient at the same time.On one hand, it does not require separate specialized institutions and organizations to distribute money through the tax code. If you define efficiency as a lack of administrative costs, then the direct provision of money is very efficient. On the other hand, government has no control over how individuals spend the money they receive so it can be very inefficient in terms of regulating behavior. The federal government also distributes money to lower levels of government through grants. These grants may be categorical grants, which are very restrictive and require that the money be spent in specific ways. They may also be block grants, which allow states and localities to spend the money on a variety of projects. Categorical grants are one way that the federal government can increase its power over the states.

Tax expenditures are very similar to tax credits. Peters breaks them up in his chapter but sometimes they are discussed together. Tax expenditures are funds that the government did not collect because individuals were able to "deduct" them. Of course, in order to benefit from tax deductions you have to already have made enough money to have income tax liability. Therefore, tax deductions often benefit wealthy and middle class individuals, while credits may benefit even those whose income is so low that they do not have to pay income taxes.

Government may also tax certain behaviors instead of passing laws prohibiting them. For example, pollution may be taxed rather than regulated. The money gained from these taxes may then be redistributed to individuals or cities affected by pollution. Usually, when we talk about government incentives or disincentives for certain behaviors we are talking about a tax credit or a tax on something that benefits or burdens society.

When a government is viewed as legitimate suasion can also be used as a tool of government. Suasion can basically be thought of as persuasion. When governments attempt to influence behavior without actively passing legislation, that is suasion. We have observed a lot of examples of suasion throughout our history. Some have been very successful like John F. Kennedy's call to service: "Ask not what your country can do for you, but what you can do for your country." Others, like Jimmy Carter's call for energy conservation in the 1980s have been unsuccessful. Suasion tends to be most effective when it does not ask citizens to significantly change their behavior, and when the country's political leaders are well-liked.

Peters also discusses other economic tools that government can use. These include the guarantee of loans and the issuance of insurance. These programs tend to be small and represent very low levels of government expenditures. They greatly benefit their recipients; students and residents in flood and hurricane zones, but are often invisible to other citizens.

As Peters points out, governments draw on these tools to distribute goods, services, benefits, and burdens. By examining them, we can determine "Who gets what, when, and how". I hope that you will continue to think about these tools when we talk about substantive policy areas. The choice of instrument can make a real difference in how individuals and groups experience policies. Which tools do you think are most efficient? Which are most effective at changing behaviors? Which would you prefer governments use?