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Jonathon Perraton and Peter Wells explore the relevance of multi‐level governance for understanding economic policy‐making. They note that three general trends can be seen in this policy area in the last 50 years. First, the ceding of power to supranational institutions in the field of economic policy‐making. Second, the creation of subnational regional infrastructures that can often have economic policy‐making capacities. And, third, the adoption of new policy instruments by national governments that commonly involve partnership arrangements with the private sector. Perraton and Wells explore the relevance of multi‐level governance in relation to these trends and its relationship to approaches that are grounded in economics, notably fiscal federalism.

Under the Community method, policy is largely the by-product of actions undertaken to advance the integration process or to preserve institutional balance, rather than to solve concrete problems efficiently. The policy that eventually emerges is all too often the best bargain that can be negotiated politically. This chapter discusses some clear-cut cases of policy failure, such as the common fisheries and agricultural policies. EU environmental policy is shown to lack a clear rationale, and highly uncertain in its actual results. Risk regulation is a particularly interesting case. The central tenet of EU risk policy — the precautionary principle — is logically defective, tends to distort, rather than clarify regulatory priorities, and has isolated the EU internationally on several occasions.

This chapter investigates the rationale of patents, their economic role, and the circumstances in which they are the most effective. The utilitarian theory considers patents as an incentive — a policy instrument used by society for encouraging inventions. Patents are a response to the public good nature of knowledge, which makes imitation easier than invention. They are one of the instruments of innovation policy along with grants, prizes, subsidies, universities, and public laboratories. Compared with other instruments, patents are more market friendly, leaving all technical and economic choices to firms and customers; and they restrict the use of knowledge. The evidence so far supports the view that patents are quite effective in encouraging innovation, especially in certain industries like pharmaceuticals or chemicals, and less so in electronics, and have little direct effect in other industries, especially in services.

This chapter surveys and analyzes the various laws and public policies adopted by governments in various countries to promote SRI. It begins by situating the emerging SRI regulation within the evolving traditions of environmental regulation and policy debates about sustainable development. The principal legal measures examined are informational policy instruments requiring disclosure of SRI policies, proxy voting and other activities; economic instruments such as taxation incentives for responsible investment; environmental liability of lenders and investors; and investment mandates or restrictions. It finds that the most extensive SRI-directed policy reforms are being adopted in Western Europe, especially for the pension fund sector. Most SRI regulation, however, has involved light-touch controls that leave significant discretion to financiers. The implementation of these measures has tended to be perfunctory and has had limited impact in changing the behaviour of financial markets.

The European Union’s (EU) role in determining the overall goals and targets of environmental policy is widely understood. In contrast, the choices that underlie the patterns of policy instrument use have not been subjected to nearly as much analysis, even though the ability to select instruments constitutes the very essence of governing. This chapter explores what the (non) use of certain instruments in one important sub-area of policy (i.e. climate change) reveals about the EU’s capacity to function as a policy state. It confirms that the EU’s role is stronger in relation to the determination of objectives than the instruments to achieve them. If one is looking for examples of policy makers ‘governing by multiple instruments’ one should focus on national policy systems. There are conditions in which the EU is willing to actively explore and even adopt non-regulatory instruments, but they seem to appear relatively episodically. For various reasons, regulation seems very likely to remain the instrument of choice in EU environmental policy.

This chapter discusses the three aspects of the process of policy implementation. One of the three features of policy implementation is policy instruments. Policy instruments are methods and techniques used as tools by governments to achieve their policy objectives. The next aspect is strategies of implementation. The chapter examines the major approaches and steps of colonial, transitional, and post-1997 Hong Kong in implementing policies. Finally, the chapter discusses the evaluation methods employed by the Hong Kong government and the public in assessing policy performance.

This chapter reviews the recent wave of regional trade agreements (RTAs), to assess the benefits and costs of alternative approaches and identify the policy choices developing countries will face in negotiating regional agreements. The chapter focuses on three core issues: (1) whether services trade differs sufficiently from goods trade as to require different policy instruments and approaches in the context of preferential liberalization, whether and how RTAs may allow deeper forms of regulatory cooperation to occur, and the effects on non-members; (2) lessons learned from the practice of preferential liberalization in services in terms of market access and rule design; and (3) the legal dimension of the policy interface, focusing on a number of aspects of rule-design, including the strengths and weaknesses of existing multilateral disciplines on regional approaches to services trade and investment liberalization. A summary is provided of Article V (Economic Integration) of the GATS, including a discussion of the extent to which its disciplines are likely to allow third countries to object to provisions in proposed agreements that are detrimental to their interests. The chapter concludes with a discussion of issue areas that parties to prospective RTAs in services will need to confront and seek novel solutions to in advancing the process of services liberalization and rule-making at the regional level. The addendum to the chapter includes a discussion of liberalizing services trade in ASEAN region and in Latin America.

Begins with an overview of foreign investment promotion in Western Europe by examining the importance of attracting investment as a goal from a national‐level perspective, emphasizing the change in attitudes that has taken place over the last decade; this section also includes a brief overview of the role of the European Commission in controlling competition between EU member states. Following this, the motives and policy instruments underpinning sub‐national actors in promoting foreign direct investment (FDI) in Western Europe are examined. To show these processes at work, case studies are used to compare the promotional policies of two European regions with very different approaches to attracting investment: Scotland and Nordrhein‐Westfalen. The final section addresses the future of FDI promotion policy.

This chapter discusses how there were four national statistical races as of the twentieth century: European White, African Black, American Indian Red, and Asian Yellow. They were put to policy work in restricting immigration in the 1920s and for racial segregation more generally until the civil rights challenge dramatically arrived in the 1960s. The chapter traces how a policy instrument used to politically, economically, and socially exclude since the nation's founding made a 180-degree turn and was used to include the racial groups historically sent to the back of the bus—both literally and figuratively. It is a story of how proactive policies of racial justice were shaped with racial statistics never intended for the policy uses to which they were put.

The purpose of this chapter is to discuss the different types of instruments of innovation policy, to examine how governments and public agencies in different countries and different times have used these instruments differently, to explore the political nature of instrument choice and design (and associated issues), and to elaborate a set of criteria for the selection and design of the instruments in relation to the formulation of holistic innovation policy. The chapter argues that innovation policy instruments must be designed and combined into mixes that address the problems of the innovation system. These mixes are often called ‘policy mixes’, though we prefer the term ‘instrument mix’. The wide combination of instruments into such mixes is what makes innovation policy ‘holistic’.

This chapter outlines the history of practices and discourses of social innovation in the EU, thus demonstrating how EU institutions have shaped the meaning and content of social innovation over time. It discusses the historical roots of social innovation in Europe and analyses how it evolved from a grassroots model of social action in the 1970s into a crucial dimension in official EU policy making during the Barroso Commission (2004-2014). Taking a chronological approach, the chapter situates social innovation developments within the broader policy framework of the EU’s overarching strategies: the re-launched Lisbon Strategy (2006-2010) and the Europe 2020 initiative (2010-ongoing) and assesses how the notion of social innovation has been used to creatively combine apparently contradictory policy goals within the Europe 2020 Strategy, such as poverty reduction on the one hand, competitiveness on the other.

Chapter 5 concludes that the rapid economic growth of Finland in the 1990s based on the rise of the ICT sector cannot be explained by an innovation policy. A more credible explanation is the combination of deregulation in the late 1980s and Nokia's decision to focus on the digital GMS technology a few years before the international market of cellular phones started to explode. In order to be performative and able to create social reality, a policy paradigm — such as national innovation system — needs to be complemented by relevant policy instruments and tools. During the 1990s and 2000s the measurement and comparison of innovative performance of countries or ‘efficiency’ of national innovation systems became a fundamental tool of making innovation policy. It is not, however, possible to derive concrete policy advices or policy instruments from these comparisons.

Renewable energy is a distinct policy field encompassing both economic and environmental considerations. How these are balanced in the face of the 2007–8 economic crisis is an important question relating to the general stickiness of environmental policies. In this chapter, we investigate long-term policy dynamics across both EU and non-EU countries and across three levels of policy change. Using an Index of Policy Activity (IPA) dataset of 562 policies, we analyse the general direction of overall change in policy mixes (macro-level), the dynamics of policy instrument type use (meso-level), and change to policy design (micro-level). We find that, while the crisis marks a turning point in the speed of policy change, the direction of policy change alters only in Ireland and the UK—namely towards policy dismantling. However, we show that dismantling and expansion unfold differently at the policy meso- and micro-levels, adding further nuance to the empirical analysis of dynamics of policy change.

This chapter develops the core of the argument regarding the specific assumptions and theoretical propositions about the role and limits of innovation policy. The theoretical basis for the holistic approach to innovation policy proposed in this book is built from a broad version of the systems of innovation approach and the identification of the concrete policy problems that afflict the innovation system, including the unintended consequences of policy. Following from that, the chapter argues that most innovation policies across countries are still partial, not holistic; that innovation policy must be separated from research policy; and that innovation policy-learning can only take place using an analytical model that helps understanding what worked, how, and why.

The purpose of this chapter is to provide a summary of the main arguments and conclusions in the book, and to highlight its main contributions. Taking the point of departure from the book’s analytical framework, and taking stock of the detailed considerations in its different chapters, this chapter looks into a series of issues related to the design of holistic innovation policy. With this purpose in mind, the chapter summarizes the theoretical foundations of an holistic innovation policy, how policy problems, obstacles, and barriers in innovation systems can be identified, and how policy instruments can be selected. The chapter finishes with a discussion of further avenues for innovation policy and innovation research. This summary chapter can be read independently of the rest of the book.

This chapter addresses three themes in the governance discussion on meeting sustainable development objectives. First, the inter-sectoral coordination challenge is addressed, highlighting policy and administrative innovations for environmental policy integration. Second, the promise of new environmental policy instruments and possible capacity bottlenecks are outlined. Using new means of finance, information, and organisation, the attitudinal changes, behavioural changes, and capacity-building necessary to make sustainable development operational may finally be achieved. Third, the EU air quality case study is discussed to illustrate the multi-level governance challenges of sustainable development, and the implications of shifting responsibility to the local level. On the whole, this chapter cautions against grand organisational and procedural designs as panaceas, especially in the absence of political commitment. The chapter concludes that sustainable development is a dynamic and innovative field of governance despite serious obstacles to achieving it.