ABSTRACT

Any suggestion to introduce a new programme invites the challenge: what would happen if it were adopted? The straightforward way to resolve such a debate is to introduce it and learn after the fact whether supporters or opponents are correct about its consequences. In business, feedback from the marketplace is often used to find out what customers will buy. A fashion merchant can try out new lines of clothing, aiming to make enough profits on the fashions that sell to offset losses on those that are remaindered. However, it is much more difficult for a government to get rid of programmes that have no appeal to citizens. It cannot offer a one-third reduction in taxes if citizens will accept public services that nobody else wants. Even if policymakers write off a new programme as part of a process of learning from experience, voters can punish them for their mistakes.