Discretion from an Economic Perspective

Abstract

People are not alike. This chapter introduces a mode of situational contracting that deals with diversity, reveals preferences, and fosters trust in public policy. Professionals in implementing social policy submit periodic mandates for approval to their principals to use discretion in customizing benefits offered and matching efforts required from their counterparts. Transactions concluded reveal the trade-offs between criteria of good governance and suggest their acceptability. The process clarifies who does, pays for or gets what, when, where, how, and why, as the key issues in political intervention. Outcomes are monitored and provide feed-back for responsive policymaking. Evidence is provided from earlier applications.