Public policy is a purposive course of government action or inaction that responds to public problems. It impacts just about everything in our lives, both directly and indirectly. Policy outputs are the formal actions that governments take and policy outcomes are the results of those actions. Government may take action in order to protect the public or collective good, or well-being. People join interest groups based on the logic of collective action or the notion that together groups of people can influence government. Because public policy is not made in a vacuum, this chapter explores the social, economic, political, governing, and cultural contexts that affect the development and implementation of policy decisions. Politics, or the exercise of power by interest groups, elected officials, or others, exerts a strong influence in policymaking. There are political, moral/ethical, and economic rationales for government intervention. Political culture refers to widely held beliefs that characterize a place or time period. People study public policy in order to understand public policy and how governments make policy decisions, think about implications of policy choices, and develop critical thinking skills to consider alternative courses of action.
This chapter details how market failures are economic concerns that can occur in four ways: monopolies (few companies control the market), negative or positive externalities (outsiders are impacted by a market exchange), information failure (consumers have insufficient information to make good decisions), and the need to provide a public good. Public goods are goods that are not exclusive and are consumed jointly. Toll goods, such as Internet service or electricity, can be jointly consumed and exclusion is feasible. Pure public goods, such as national defense and public parks, are jointly consumed and no one is excluded from accessing the good. Common pool resources, such as use of air and water, cannot be jointly consumed and are not exclusive. Finally, the chapter introduces the concept of policy analysis, presenting some criteria for analyzing public policy—effectiveness, efficiency, political feasibility, and equity.