Understanding Policy Tools: Techniques of Control

Every government, no matter how well-intentioned, faces one fundamental question: how do you actually get people to do what a policy requires? Laws on paper mean little unless there is a mechanism to translate intent into action. That is where policy tools, or policy instruments, come in. They are the practical levers that convert political goals into measurable outcomes – from reducing air pollution to promoting girl child education. Understanding these tools is central to understanding how governance really works.

What are policy tools? 🔗

At the simplest level, policy tools are the means through which governments pursue their goals. The scholars Lester Salamon and Michael Lund, in their influential 1989 work Beyond Privatization: The Tools of Government Action, described a policy tool as a method through which government seeks a policy objective. This deceptively simple definition hides a powerful insight – every tool the public sector uses carries its own characteristics and consequences for how a programme actually unfolds on the ground.

Scholar James Anderson famously called these instruments “techniques of control.” In his view, policy tools are designed, either overtly or subtly, to cause people to do things, refrain from doing things, or continue doing things they would otherwise not do. That description captures the essence of the modern administrative state: governments rarely force behaviour in a crude way. Instead, they nudge, reward, penalise, regulate, inform, and persuade – and the choice of which tool to use often determines whether a policy succeeds or fails.

Why the choice of tool matters 🔗

Consider a simple goal: reducing road accidents. A government could pass a strict law mandating helmets and seatbelts (regulation), subsidise the cost of safety gear (financial incentive), run awareness campaigns (information), or build better roads (direct service provision). Each approach reaches the same destination, but with very different costs, timelines, political reactions, and unintended consequences. The Ministry of Road Transport and Highways in fact uses a combination of all four, which is typical of modern governance.

This is precisely why scholars argue that many problems attributed to poor administration are actually consequences of choosing the wrong tool. A well-meaning welfare scheme can fail not because the idea was flawed but because the instrument – say, a means-tested benefit – created so much stigma or paperwork that beneficiaries simply did not apply. Guy Peters, in his work on policy instruments and policy capacity, notes that means-testing can discourage uptake, and that sometimes universal benefits combined with progressive taxation prove more effective.

The Salamon and Lund classification 🔗

Salamon and Lund proposed one of the most widely cited typologies of policy tools. Their framework groups instruments into four broad families.

Money payments 🔗

This is perhaps the most visible category. Governments transfer money directly to citizens or organisations to encourage certain behaviour. Cash transfers under PM-KISAN, which deposits ₹6,000 annually into farmers’ bank accounts, fall into this group. So do maternity benefits, scholarships, pension schemes, and grants to state governments or NGOs. The logic is straightforward – money changes incentives, and incentives change behaviour.

Provision of goods and services 🔗

Here, the government does the work itself. Public hospitals treat patients, government schools educate children, municipal bodies collect garbage, and defence forces provide security. Direct provision is often used when the private sector will not or cannot supply a good at the scale or price required, or when equitable access is a priority. Programmes like Samagra Shiksha exemplify this direct delivery approach in the education sector.

Legal protections 🔗

The government can also act by creating rights and protections that individuals can invoke. Consumer protection laws, labour rights under the Ministry of Labour and Employment, environmental clearances, and anti-discrimination statutes all fall in this category. The tool here is not money or service but the assurance of legal recourse – a framework within which citizens and firms are expected to operate.

Restrictions and penalties 🔗

Finally, governments prohibit or punish certain behaviours. Fines for traffic violations, bans on single-use plastics notified by the Ministry of Environment, Forest and Climate Change, criminal penalties for tax evasion, and licensing requirements all work by attaching costs to unwanted behaviour. This is the most coercive category and is typically reserved for situations where voluntary compliance is unlikely.

Expanded classifications by Anderson and Peters 🔗

While Salamon and Lund’s four-fold typology is a useful starting point, later scholars expanded the list to capture the variety of instruments in use today.

Anderson’s broader menu 🔗

James Anderson, in his influential textbook Public Policymaking: An Introduction, categorised tools on the basis of directive power, services, benefits, contracts, general expenditures, market and proprietary operations, taxes, loans, subsidies, sanctions, inspection, licensing, and informal procedures. This longer list recognises that governments operate in many modes at once – they can order, spend, tax, inspect, lend, and quietly nudge through informal conventions.

Guy Peters’ framework 🔗

B. Guy Peters categorised policy tools on the basis of law, services, money, taxes, and other economic instruments. His work, particularly in American Public Policy: Promise and Performance, emphasises that the choice of instrument is never purely technical – it is shaped by political ideology, administrative capacity, and public acceptance. A government that distrusts bureaucracy will prefer tax credits over direct service delivery; a government that prioritises equity may do the opposite.

The major tools in detail 🔗

Let us look more closely at the individual instruments and what they do well or poorly.

Laws and regulations 🔗

Laws are formal rules enacted by legislatures. Their strength lies in certainty and enforceability – once notified, they apply uniformly and can be enforced through courts. The Motor Vehicles (Amendment) Act, the Right to Information Act, and the Goods and Services Tax regime are all examples of laws acting as policy instruments. Their weakness, however, is rigidity. Amending a law takes time, political will, and parliamentary effort, which makes laws slow to adapt to new realities.

Services 🔗

The direct provision of services through ministries and agencies is often the most visible form of government action. Services score well on reach and equity, but can be inefficient when bureaucracy is overstretched. The National Health Mission illustrates both the promise and the strain of large-scale direct service delivery.

Money: subsidies, grants, and transfers 🔗

Financial tools are flexible and politically popular, since they deliver visible benefits. Agricultural subsidies, LPG connections under Ujjwala, and MGNREGA wage payments all rely on money as the lever. The risk is fiscal – subsidies can become entrenched and difficult to withdraw even when they stop serving their original purpose.

Taxes 🔗

Taxes are not just revenue instruments; they are powerful behavioural tools. Higher tax rates on tobacco and sugary drinks, lower GST rates on electric vehicles, and tax exemptions for donations to charitable trusts are all policy tools disguised as fiscal measures. The Income Tax Department effectively administers a vast array of behavioural incentives through deductions and exemptions. Their advantage is that they work at scale without requiring a new bureaucracy; their drawback is that targeting is imprecise, and relief often reaches those who need it least.

Informal procedures 🔗

Not every tool requires a law or a budget line. Governments issue advisories, circulate best practices, convene stakeholder consultations, publish indices that shame poor performers, and use moral suasion. The NITI Aayog‘s state rankings on health, education, and sustainable development goals are classic examples of informal instruments – no coercion, no money, but significant behavioural impact on state governments competing for status.

Strengths and weaknesses: how to evaluate tools 🔗

Different tools perform differently on different criteria. Salamon and Lund argued that instruments vary in their effectiveness, efficiency, equity, legitimacy, and partisan support, and that context determines which tool is most appropriate. A few practical dimensions are worth noting.

Certainty refers to how reliably a tool produces the intended outcome. Laws tend to score high here, while informal procedures score lower. Efficiency asks whether the tool achieves its goal at reasonable cost – taxes and subsidies are efficient in reach, but often leaky in targeting. Effectiveness is about real-world impact, which depends as much on administration as on design. Flexibility captures how quickly a tool can be adjusted – executive orders and circulars adapt faster than statutes.

A sophisticated policy design usually combines multiple tools. To promote electric vehicles, for instance, the government uses subsidies under FAME-II, lower GST rates, regulations mandating charging infrastructure, and awareness campaigns – a mix that covers the weaknesses of any single instrument.

Tools in the age of new governance 🔗

The classical picture of government directly producing goods and services has shifted. Salamon himself has argued that modern public action increasingly relies on third parties – NGOs, private contractors, and local bodies – to deliver public goals. This is the era of what he calls “new governance,” where the tools of public action have proliferated dramatically beyond direct bureaucratic delivery. Public-private partnerships in highways, empanelled hospitals under Ayushman Bharat, and CSR-funded community projects all reflect this shift.

For administrators and students of public policy, the implication is clear. Understanding policy tools is no longer optional – it is the heart of the discipline. The question is rarely whether the government should act, but how – and the “how” is a question of tools.

What do you think? If you were designing a policy to reduce air pollution in your city, which combination of tools – regulations, subsidies, taxes, or information campaigns – would you rely on most heavily, and why? And are there situations where informal instruments like advisories and rankings can achieve more than a formal law?

References

1. https://books.google.com/books/about/Beyond_Privatization.html?id=BXI2nGfivJQC
2. https://morth.nic.in/road-safety
3. https://link.springer.com/chapter/10.1057/9780230524194_5
4. https://pmkisan.gov.in/
5. https://samagra.education.gov.in/
6. https://labour.gov.in/
7. https://moef.gov.in/
8. https://www.amazon.com/Public-Policymaking-James-Anderson/dp/1285735285
9. https://www.barnesandnoble.com/w/american-public-policy-b-guy-peters/1120622809
10. https://nhm.gov.in/
11. https://incometaxindia.gov.in/
12. https://niti.gov.in/
13. https://academic.oup.com/policyandsociety/article/40/3/295/6509331
14. http://spia.uga.edu/faculty_pages/tyler.scott/teaching/PADP6950_Spring2017/Readings/Salamon.2002.Ch1.pdf