This readable and comprehensive introduction to the principles of public-policy analysis is the first book to integrate the tools students need to analyze policies with the common sense they need to understand how real policies are made.

Part 1 Policy happens when we decide to decide: an overview of policy analysis as a profession and a process; deciding how to decide - "experts", "the people", and "the market". Part 2 Why is policy analysis important?: a benchmark for performance - what is a "market"; case study 1 - a simple exchange economy; evaluation and "market failure" - criteria for intervention; experts and "advocacy" - the limits of policy analysis; democracy and "government failure" - the limits of choice by the people; case study 2 - a simple command polity. Part 3 How is policy analysis conducted?: the welfare economics paradigm - introduction to analytics; choice of regulatory form - efficiency, equity, or politics?; case study 3 social security crisis. Part 4 Cost-benefit analysis; discounting 1 - probability, expected values and risk; discounting 2 - time; cost-benefit analysis.