The Choice of Policy Instruments: The Case of Automobile Insurance in Ontario

Abstract

<p>According to the public choice approach to public policy, the objective of any political party is to garner enough votes to form or maintain a government. The ancillary hypothesis of poli-tical rationality dictates that governing parties choose policy instruments which best serve this purpose. In essence, this means choosing policy instruments which a plurality of voters find favourable. In this paper, the hypothesis of political rationality is first examined from a theoretical perspective. This analysis .points out certain shortcomings in the hypothesis, particularly the notion. that voters are the focus of instrument choice. In view of this, the case of automobile insurance in Ontario is presented. In particular, the events leading up to the government of Ontario's enactment of compulsory automobile insurance in 1980 are examined. In the end, the hypothesis of political rationality is rejected, and in its stead the framework of a new hypothesis of instrument choice based on interest groups and bureaucracy is laid.</p>