By that I mean you should have a policy that is targeted. You can have a big policy or whatever label you want to put it under, but it should be targeting a specific market failure. If you can't identify the market failure and what the policy is supposed to do, then I would say, don't do it. I guess the analogue would be medicine. It's not clear that you should just be taking painkillers if you don't know what the source of the pain is. A painkiller has a generalized kind of treatment effect, if you will. What I'm saying is that if you can't identify the specific issue you're trying to address, you want to be very careful about intervening, because the chances are that you'll get unintended consequences. That's really what I mean by that. It can be a big policy as long as it's targeted at a big problem that is widespread. Otherwise, “targeted small” can be beautiful too.
On May 28th, 2013. See this statement in context.