Public Policy and the Public Interest
By Lok-sang Ho
Routledge – 2011 – 266 pages
As a book on public policy, this book is unique in addressing explicitly the role of human nature. Only with a good understanding of human nature can policy makers address their foremost needs and anticipate how people may respond to specific designs in policy. This way policy makers can avoid "unintended consequences." The book also provides a new perspective on the meaning of public interest, which is based on intellectual roots dating back to J.S.Mill and more recently Harsanyi and Rawls.
Traditionally, economists have referred to either the Hicksian criterion or the Kaldorian criterion as the yardstick to whether a policy is welfare enhancing, not realizing that both of these criteria fail abjectly in producing a convincing test for welfare improvement. This is because ex post, typically some people will gain and some people will lose from any policy. The author argues for an alternative, ex ante welfare increase criterion that is based on how people would assess a policy if they were completely impartial and totally ignored their personal interests. It applies the principles to key policy concerns such as health policy, tort law reform, education and cultural policy, and pension reform.
The healthcare reform proposals in the book illustrate the application of the principles. The author proposes a basic protection plan under which standard basic healthcare services are priced the same whether they are provided by public or private caregivers—at levels that can contain both demand side and supply side moral hazard. Annual eligible healthcare expenses are capped to alleviate worries. A "Lifetime Healthcare Supplement" that includes an element of risk sharing adds to patients’ choice and protection without compromising fiscal sustainability.
'This is truly an inspiring book. It is written by an economist who has over a long period of time been both an observer of public policy and a participant in the process. This experience lends weight to the message of the book. Public policy must be impartial; it must serve all the people; it must be open; and it must be multidisciplinary in its approach.'
Robin William Boadway, Queen's University Kingston, Canada.
'Too rarely do policy researchers step back from the details of particular policy issues to revisit the question of what makes a good society from the lens of social science knowledge. Lok Sang Ho courageously does so in this provocative book…. By raising these important issues, and offering insight into how they can be addressed, Professor Ho makes a valuable contribution to policy scholarship.'
David L. Weimer, University of Wisconsin – Madison, USA.
'I am confident that most readers will find, as I have, many enlightening discussions and thought-provoking ideas. Thus, I have no hesitation in recommending this book to readers…. I have benefited from reading this book and believe that many of his courageous proposals are thought-provoking and merit close attention.'
Yew-Kwang Ng, Monash University, Australia.
Lok Sang Ho, Professor of Economics and Director of the Centre for Public Policy Studies, Lingnan University, has published over ninety academic papers in journals and book chapters. Prof. Ho has been active in community and professional service. He served as President of the HK Economic Association for eight years through 2007 and had been an Advisor for the Hong Kong Institute of Monetary Research for ten years from 1999. He had also served as a member of HK Committee of the Pacific Economic Cooperation Council and the Central Policy Unit of the Hong Kong SAR Government. Presently he is a member of the Standing Commission on Civil Service Salaries and Conditions of Service, the Policy Research and Advocacy Committee of the HK Council of Social Services, and the Task Force on Study Project on Volunteering in Hong Kong for the Agency for Voluntary Services, etc. After stepping down as President of the HK Economic Association, he continues to serve the Association as Hon. Treasurer.