Selecting Policy Instruments: Neo-Institutional and Rational Choice Interpretations of Automobile Insurance in Ontario

Abstract

AbstractThe rational choice model of politics, which construes important political processes as a series of choices taken by self-interested political actors, has dominated theorizing on the subject of policy instruments in Canada. While useful, this approach is nonetheless limited by its narrow conception of rationality and its inattention to the context of instrument choice. As an alternative, the neo-institutional approach offers a perspective on political choice that takes better account of contextual and organizational factors. In this article, the logic of both approaches is used to explain the policy process in the case of automobile insurance in Ontario. The purpose of this exercise is exploratory, not confirmatory. Both approaches do, in fact, offer plausible explanations for the creation of a rate review board, the retention of fault-liability as the basis of compensation and the apparent rejection of public automobile insurance. However, the study concludes that it is essential that research strategies in the realm of instrument choice incorporate insights from the neo-institutional approach.