Government policy is the guiding set of rules, regulations and guidelines that a government creates to manage the delivery of public goods and services like education, infrastructure, security, and health. Policy development is a complex and multi-faceted process that is influenced by a wide range of factors.
The goal of a policy is to achieve specific goals or objectives, such as stimulating economic growth, reducing poverty, and safeguarding the environment. Government policies are designed to do this through laws, programs, funding initiatives, and a variety of other tools.
A key issue in crafting policy is deciding how to balance multiple considerations and tradeoffs. For example, a government may prioritize tax cuts over subsidies when evaluating how to boost the economy (though it is important to consider the “multiplier effect” of each). Another tradeoff is between targeting stimulus to individuals (to encourage consumption) or to firms (to stimulate investment) vs. investing in capital expenditures (which will bolster longer-term growth).
Policymaking is a multi-stage process that involves the formulation of aims, the establishment of rules and the allocation of resources to carry them out. Often, policies must be consistent with policies established by higher levels of government (eg, the federal government preempts state-level policy in some areas). The development of effective government policies requires strong evidence, clear outlines of expectations, and the support of engaged stakeholders.