There are two caveats concerning our discussion of generic policies. First, we
do not wish to imply that all policy analyses compare and evaluate across generic
policies. Much policy analysis is relatively incremental. For example, you may be
asked to compare the efficiency and equity impacts of a variety of voucher schemes.
Familiarity with a broad range of generic policies helps you know that you are examining
relatively incremental alternatives; it may also enable you to exploit opportunities
for introducing alternatives that are less incremental. Second, there is an enormous
literature on each of the generic policies-too much material for us to review in any depth here. In order to prepare you to examine further the issues relating to
each generic policy, however, we provide representative references to relevant literatures.
We group generic policies into five general categories: (I) freeing, facilitating,
and simulating markets; (2) using taxes and subsidies to alter incentives; (3) establishing
rules; (4) supplying goods through nonmarket mechanisms; and (5) providing
insurance and cushions (economic protection). In the following sections, we consider
specific policies within each of these groups