"There Ought to Be a Law!" – Instrument Choice: An Overview of the Issues

2 Policy Instruments: An Inventory

2. Policy Instruments: An Inventory

What is it that government seeks to do with its policy instruments? This is, to put it mildly, too complicated to discuss in detail here, but we need some bearings for what follows. If we assume that governments are trying to achieve certain outcomes as a result of policy, what are the primary targets or the subjects upon which they can operate to achieve those outcomes?

Behaviour of individuals:
The actions of individuals, though not their underlying rationales (panhandling: the act of begging on the streets, not the belief that it is acceptable or efficacious behaviour).
Norms:
The beliefs that underpin behaviour (panhandling: the belief that it is acceptable or efficacious to beg).
Processes:
The interaction of behaviours and norms, or of various interests (panhandling: the interaction of panhandlers and those who give them money, and between them and merchants outside whose stores the panhandling takes place).

Stipulating rules about behaviour, about norms, or about processes seems a reasonable way to proceed in trying to achieve certain outcomes. There are several considerations however, which while fundamental, are often taken for granted.

2.1 Law as a Policy Instrument

Most of what government does gets embodied in law in one way or another. The issue here is the use of law or rules themselves to achieve policy objectives, that is, to efficiently affect behaviour, norms, or processes. Stipulating rules about behaviour, about norms, or about processes seems a reasonable way to proceed in trying to achieve certain outcomes. There are several considerations however, which while fundamental, are often taken for granted.

The first is that there are different types of legal instruments. It is possible to distinguish among:

  • legislation or statute (including delegated legislation based on statute);
  • decisions (legal ones about what a statute means);
  • contracts (applicable to the parties, but legally binding);
  • quasi-legislation (issued by administrative authorities in the form of internal or non-binding rules, policies and guidelines); and,
  • incorporation by reference (bringing another instrument such as a code of conduct into a statute and giving it the force of law).

Quasi-legislation has no binding legal effect generally -- but bulletins etc. interpreting the meaning of legislation can have practical effect and can be authoritative to the degree that they are accepted by the courts.

Distinctions can be made among these in terms of their (i) legal effect and (ii) the procedures used to formulate them. Legal effect has two dimensions: generality (number of people it is directed to) and degree of binding (imposition of some threat or sanction). Statutes affect large numbers of people and are binding. This is also true of delegated legislation, but there is a constraint in that courts will demand a clear legal authority for making it. Decisions are instruments that apply law, not make it. They are specific rather than general. Contracts are even narrower, binding only on the parties to the contract. Quasi-legislation has no binding legal effect generally -- but bulletins etc. interpreting the meaning of legislation can have practical effect and can be authoritative to the degree that they are accepted by the courts. Finally, incorporation by reference is quite a powerful and flexible form of rule-making because it can combine instruments that would otherwise stand separate and give them the force of law. A statute that incorporates a regulatory code of conduct developed by an industry association, for example, takes the privately developed code and gives the it force of law. Moreover, depending on drafting, the incorporation can be dynamic in the sense that any amendments made to the code subsequent to the passage of the legislation also automatically get reflected in the legal instrument (there is, for obvious reasons, some debate over this). The law without the code is one instrument, and the code without the law is another. Combined, they form a hybrid that is more than the sum of its parts.

The logic is that the wider the legal effect and more binding the nature of the rule, the closer one gets to authoritative and generally representative institutions such as Parliament.

The type of instrument can be linked to the procedure for making it. The reason is that the characteristics of the body making a legal instrument determines how well suited it is to making it. For example, strong compliance with a rule usually depends on people knowing and accepting it, and this knowledge and acceptance improves when people have a chance to participate in the making of the rule. Some types of decision-making bodies are better at involving certain groups of people than others. The logic is that the wider the legal effect and more binding the nature of the rule, the closer one gets to authoritative and generally representative institutions such as Parliament. Delegated legislation and quasi-legislation usually do not bring people into the decision-making process as effectively as Parliament potentially can. The narrower the legal effect, and the more valued consensus is among a small group of participants, the more one will rely on forms of rules approaching the quasi-legislative, or discretionary end of the continuum.

The main reasons for the use of quasi-legislation are always the same: flexibility and lack of technicality. Flexibility means that rules can be changed easily and quickly. Of course, what appears as flexibility and simplicity from one perspective can seem like "back-door legislation" and confusion from another. Persuasion and consensus are the bedrock for quasi-legislation, since the rules are typically non-binding in some ultimate legal sense. Acceptance and the mechanisms for achieving acceptance are therefore central features of the processes associated with quasi-legislation.

Another distinction is between rules that stipulate or prohibit behaviours and those that establish norms, rights, and obligations.

Another distinction is between rules that stipulate or prohibit behaviours and those that establish norms, rights, and obligations. Norms can be practical, such as driving on one side of the street or other, but even these cases, practical norms can take on the patina of "what is right" and hence develop a quasi-moral dimension. The Charter of Rights and Freedoms and provincial human rights codes obviously seek to establish moral norms and rights, but many types of legislation define categories of persons (e.g., spouse, status Indian, youth, resident, senior) and hence their entitlements and the sorts of claims they can make on others and on the government. Though governments can use legal instruments in this way to affect moral norms, there has to be some equilibrium with existing social norms, or a willingness to pay the price if those norms are narrowly but intensely held. At one time or another, governments that tried to change social norms on racial, gender, or ethnic equality have encountered resistance. On the other hand, over time, those norms have changed in part because of legislation.

If one key consideration is the type of rule, the other consideration is the cost of implementing those rules. To take the example once again of panhandling, a lot depends on how clearly the prohibited behaviour can be defined. If it cannot be clearly distinguished from other forms of charitable solicitation, it will run into enforcement problems. Even if it can, enforcement costs might be high depending on the incidence of panhandling and the intensity of those engaged in it.

The notion that "there ought to be law" depends, therefore on what the law is supposed to be about, what kind of law and process is appropriate to that target, and what the costs of implementation and enforcement will be.

The notion that "there ought to be law" depends, therefore on what the law is supposed to be about, what kind of law and process is appropriate to that target, and what the costs of implementation and enforcement will be. Some conclusions:

  • Behaviours that are relatively uncomplicated and clearly defined are generally susceptible to what we have called laws with broad legal effect (wide generality and high degree of binding).
  • The more complicated the behaviour and the narrower the constituency, the greater the reliance on quasi-legislation, interpretation, and enforcement.
  • The success of rules to define norms will vary negatively with the intensity with which counter-norms are held, and positively with the willingness to use the coercive power of government to enforce those norms. Changing social norms through law usually takes a long time.
  • Rules that try to control complex processes will themselves have to be very complex and will entail high enforcement costs.
  • Rules backed by sanctions are often better at prohibiting behaviours than encouraging them – in the sense that it is easier to say "don’t steal a cookie" than it is to say, "make a cookie."

The use of the legal instrument is clearly limited in some circumstances, and sometimes costly and inefficient in others. What are the alternatives?

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