ABSTRACT
This chapter outlines the economic and political context of social welfare policy and also the principles of economic efficiency and equity in terms of evaluating interventions. The principle of economic efficiency focuses on three interrelated issues: the probable effect of the intervention on the overall economy; the relative merits of spending on one social program rather than another; and the ways in which the incentives and/or disincentives the program will create are likely to influence individual behavior. The economic context of social policy focuses on the production, distribution, and use of income, wealth, and resources. In contrast, the political context focuses on the pursuit and exercise of power in government or public affairs. The chapter explains regulatory policy, often gains support after a man-made disaster, such as a coalmine collapse or a nuclear facility melt-down, and is heavily influenced by the economic and political environment.
