1 Levi, Margaret, “The Transformation of Agrarian Institutions: An Introduction and a Perspective,” Politics and Society 16 (1988), 159–69.CrossRefGoogle Scholar See also Levi, Margaret, Of Rule and Revenue (Berkeley: University of California Press, 1988)Google Scholar, esp. chap. 2 and appendix.

2 There are, of course, many versions of the rational choice model. Outlined here is an ideal-type construct. Many rational choice theorists would doubtless dissent from some of our specific characterizations.

3 March, James G. and Olsen, Johan P., “The New Institutionalism: Organizational Factors in Political Life,” American Political Science Review 78 (1984), 734–49.CrossRefGoogle Scholar

4 For example, Durkheim, Emile, Suicide (New York: Free Press, 1951)Google Scholar, originally published 1897; and Parsons, Talcott, The Structure of Social Action (New York: McGraw-Hill, 1937).Google Scholar An excellent critical discussion of the “normativist perspective” is found in Hechter, Michael, Principles of Group Solidarity (Berkeley: University of California Press, 1987), 3–4, 20–24.Google Scholar

5 Skocpol, Theda, “Bringing the State Back In: Strategies of Analysis in Current Research,” in Evans, Peter B., Rueschemeyer, Dietrich and Skocpol, Theda (eds.), Bringing the State Back In (New York: Cambridge University Press, 1985), 3–37CrossRefGoogle Scholar; Nordlinger, Eric A., On the Autonomy of the Democratic State (Cambridge: Harvard University Press, 1981)Google Scholar; and Krasner, Stephen D., Defending the National Interest (Princeton: Princeton University Press, 1978).Google Scholar

6 March, James G., “Bounded Rationality, Ambiguity and the Engineering of Social Choice,” Bell Journal of Economics 9 (1978), 587–608CrossRefGoogle Scholar; and Cohen, Michael D., March, James G. and Olsen, Johan, “People, Problems, Solutions and the Ambiguity of Relevance,” in March, James G., Olsen, Johan et al. , Ambiguity and Choice in Organizations (Bergen: Universitetsforlaget, 1979), 24–53.Google Scholar

7 Grafstein, Robert, “The Problem of Institutional Constraint,” Journal of Politics 50 (1988), 577–99.CrossRefGoogle Scholar

8 March and Olsen observe that the new institutionalism “is far from coherent or consistent; it is not completely legitimate; but neither can it be entirely ignored” (“The New Institutionalism,” 734).

9 Not all rational choice theorists are comfortable with this position. See, for example, Buchanan, James M., What Should Economists Do? (Indianapolis: Liberty Press, 1979), 93–112.Google Scholar

10 See, for example, Riker, William H., “Implications from the Disequilibrium of Majority Rule for the Study of Institutions,” American Political Science Review 74 (1980), 432–46.CrossRefGoogle Scholar

11 Doern, G. Bruce and Phidd, Richard, Canadian Public Policy (Toronto: Methuen, 1983), 110–12.Google Scholar Alternative classification schemes can be found in Pal, Leslie A., Public Policy Analysis: An Introduction (Toronto: Methuen, 1987)Google Scholar, chap. 7; and Weaver, R. Kent, The Politics of Industrial Change (Washington: Brookings, 1985)Google Scholar, chap. 3.

12 Excellent examples are presented in Woodside, Kenneth, “The Political Economy of Policy Instruments,” in Atkinson, Michael M. and Chandler, Marsha A. (eds.), The Politics of Canadian Public Policy (Toronto: University of Toronto Press, 1983), 173–97Google Scholar; and Weaver, The Politics of Industrial Change, 74–85.

13 According to Doern and Wilson, “politicians (especially the collective cabinet) have a strong tendency to respond to policy issues (any issue) by moving successively from the least coercive governing instruments to the most coercive.” See Doern, G. Bruce and Wilson, V. Seymour, “Conclusions and Observations,” in Doern, G. Bruce and Wilson, V. Seymour (eds.), Issues in Canadian Public Policy (Toronto: Macmillan, 1974), 339.Google Scholar

14 In seeking to control inflation or induce plant locations, governments do appear to prefer to coax or persuade before they compel. The same cannot be said for labour relations, where some governments at least have shown little reluctance to employ coercive instruments. See Panitch, Leo and Swartz, Donald, The Assault on Trade Union Freedoms: From Consent to Coercion Revisited (Toronto: Garamond, 1988).Google Scholar

15 Trebilcock, M. J., Hartle, D. G., Prichard, J. R. S. and Dewees, D. N., The Choice of Governing Instrument (Ottawa: Economic Council of Canada, 1982).Google Scholar

16 For example, Becker, Gary S., “Competition and Democracy,” Journal of Law and Economics 1 (1958), 105–08.CrossRefGoogle Scholar Trebilcock et al. make a persuasive case for treating the Doern-Wilson hypothesis as a variation on the theme of technical efficiency where coercion becomes synonymous with cost (The Choice of Governing Instrument, 22–23).

17 Trebilcock et al., The Choice of Governing Instrument, 25.

18 These and other “political axioms” are summarized in Ibid., 33–34.

19 Woodside, Kenneth, “Policy Instruments and the Study of Public Policy,” this Journal 19 (1986), 787.Google Scholar

20 On the last point in particular see Ibid., 787–92.

21 Trebilcock et al., The Choice of Governing Instrument, 12.

22 Grafstein, “The Problem of Institutional Constraint,” 583.

23 Levi, “The Transformation of Agrarian Institutions,” 163; also Grafstein, “The Problem of Institutional Constraint,” 583–84. There may, however, be first-order rules upon which the constitutional contract is based that are much harder to change. See Buchanan, James, The Limits of Liberty (Chicago: University of Chicago Press, 1975)Google Scholar; and, for a distinction between constitutions and institutions, Mark Sproule-Jones, “Institutions, Constitutions and Public Policy,” in Atkinson and Chandler, The Politics of Canadian Public Policy, 127–50.

24 Krasner, Stephen D., “Sovereignty: An Institutional Perspective,” Comparative Political Studies 21 (1988), 73.CrossRefGoogle Scholar

25 The issue is addressed directly in Grafstein, “The Problem of Institutional Constraint,” 588–94.

26 This point is emphasized in Krasner, “Sovereignty,” 73–77.

27 Manzer, Ronald, “Public Policy-making as Practical Reasoning,” this Journal 17 (1984), 580.Google Scholar

28 March and Olsen, “The New Institutionalism,” 741. The impact of this on “political jurisprudence” is traced in Smith, Rogers M., “Political Jurisprudence, the ‘New Institutionalism,’ and the Future of Public Law,” American Political Science Review 82 (1988), 89–108.CrossRefGoogle Scholar

29 March, James G. and Olsen, Johan P., “Popular Sovereignty and the Search for Appropriate Institutions,” Journal of Public Policy 6 (1986), 353.CrossRefGoogle Scholar

30 Wildavsky, Aaron, “Choosing Preferences by Constructing Institutions: A Cultural Theory of Preference Formation,” American Political Science Review 81 (1987), 1–21.CrossRefGoogle Scholar

31 Atkinson, Michael M. and Coleman, William D., “Strong States and Weak States: Sectoral Policy Networks in Advanced Capitalist Economies,” British Journal of Political Science 19 (1989), 48–67.CrossRefGoogle Scholar

32 Data on the structure of the industry are drawn from Ontario, Inquiry into Motor Vehicle Accident Compensation in Ontario, , Report, 2 vols. (Toronto: Queen's Printer for Ontario, 1988).Google Scholar This report, prepared by the Honourable Mr. Justice Coulter Osborne, is referred to hereafter as the Osborne Report.

33 Data on the countries of origin and the proportion of direct writers were calculated separately using information supplied in Appendix 18 of the Osborne Report.

34 Paul Potvin, “The Structure of the Ontario Automobile Insurance Industry,” in the Osborne Report, vol. 2, 224–81.

35 Ontario, Royal Commission on Automobile Insurance Premium Rates, Report (Toronto: Queen's Printer, 1930).Google Scholar This report, prepared by the Honourable Frank E. Hodgins, is referred to hereafter as the Hodgins Report.

36 Ontario Legislative Assembly, Select Committee on Automobile Insurance, First Report (Toronto, 1961)Google Scholar, Interim Report (Toronto, 1961), and Final Report (Toronto, 1963); and Ontario, Legislative Assembly, Select Committee on Company Law, First Report on Automobile Insurance (Toronto, 1977)Google Scholar and Second Report on Automobile Insurance (Toronto, 1978).

37 Bill 2, which is now law, is known formally as An Act to Establish the Ontario Automobile Insurance Board and to provide for the Review of Automobile Insurance Rates. It was introduced by the Honourable Robert Nixon on November 4, 1987, and received Royal Assent on February 11, 1988. It will be referred to here simply as Bill 2.

38 See Ontario, Task Force on Insurance, Final Report (Toronto: Queen's Printer, 1986).Google Scholar This report, prepared by David W. Slater, is referred to hereafter as the Slater Report.

39 Osborne Report, vol. 1, 248–49.

40 Minister of Consumer and Commercial Relations Monte Kwinter, in a speech delivered on April 23, 1987, indicated that the government has an unfinished agenda of reform. This agenda was given something of a setback by the Osborne Report, which opposed both a rate-setting board and fundamental reform of the existing system of bodily injury compensation.

41 The question of profitability is contentious, especially in the aftermath of large premium increases in 1986. Automobile insurance was by most accounts not profitable in 1985, when costs from losses significantly exceeded income from premiums. For an in-depth analysis, see Osborne Report, vol. 1, 278–96.

42 Insurance Bureau of Canada, Smart No-Fault (Toronto, 1987).Google Scholar

43 A study prepared for the Select Committee on Company Law by Woods Gordon Management Consultants concluded that “it is impossible to provide a factual or statistically supportable answer to the government versus private ownership question.” See Select Committee on Company Law, Second Report on Automobile Insurance, Background Study Number Two: Government Ownership of Automobile Insurance (Toronto, 1978), 449.Google Scholar This report is referred to hereafter as the Woods Gordon Report.

44 These data are reported annually and include information on premiums written and earned, losses and loss expenses, claim frequency, average cost per claim and loss ratio.

45 McKay, Hugh, “The Association of Canadian Insurers,” Canadian Insurance 92 (1987), 58ff.Google Scholar Although the association is relatively small, seven of the eight member companies rank within the top 20 automobile insurers in Ontario.

46 See the remarks of the Honourable Robert Nixon to the Ontario Standing Committee on Administration of Justice, Hearings on the Automobile Insurance Board Act, January 11, 1988.Google Scholar

47 On the classification scheme itself, see Ontario, Ministry of Financial Institutions, A Draft for Consultation: A Classification System for Automobile Insurance (Toronto, February 1988).Google Scholar

48 In a submission to the Select Committee on Company Law on a version of no-fault proposed by the IBC in the mid-1970s, the Consumers Association of Canada concluded that, “after months of study and opinion-gathering from members in all provinces, we find that we are unable to present a national consensus on the plan as proposed…. The adoption of the plan might prevent further increases in premium for some classes of drivers, but consumers have no assurance that this would be so.” See Archive of Ontario, Exhibit 41 of the Select Committee on Company Law, Second Report on Automobile Insurance, “Comments on Auto Insurance and Variplan,” n.d.

49 Woods Gordon Report, 318–36.

50 On the inability of individuals to assess accurately personal risks see Goodin, Robert, Public Policy and Political Theory (Chicago: University of Chicago Press, 1982), 139–45.Google Scholar

51 Manitoba is a case in point. See “1,000 meet to fight Manitoba auto rates,” Globe and Mail, January 8, 1988.

52 Trebilcock et al., The Choice of Governing Instrument, chap. 6 and Trebilcock, M. J. and Prichard, J. R. S., “Crown Corporations: The Calculus of Instrument Choice,” in Prichard, J. Robert S. (ed.), Crown Corporations in Canada: The Calculus of Instrument Choice (Toronto: Butterworths, 1983), 1–97.Google Scholar

53 See Pfeffer, Jeffery, Organizations and Organization Theory (Marshfield, Mass.: Pitman, 1982)Google Scholar, esp. chaps. 6, 7.

54 One example is the traditionally low level of political contributions made by the industry and its associations. See Nigol, Robert A., “The Choice of Policy Instruments: The Case of Automobile Insurance in Ontario” (unpublished M.A. thesis, McMaster University, 1985), 103–04.Google Scholar

55 Tuohy, Carolyn and Chandler, Marsha, “The Role of Government in the Insurance Arena in Ontario: A Political Analysis,” background study prepared for the Ontario (Slater) Task Force on Insurance (Toronto, April 1986).Google Scholar

56 Manzer, “Public Policy-making as Practical Reasoning,” 591.

57 Cohen et al., “People, Problems, Solutions and the Ambiguity of Relevance,” 36.

58 Ontario represents the dominant automobile insurance market in Canada. Radical changes to the system of automobile insurance in Ontario would have serious ramifications for the insurance industry in general, both in the province and the rest of the country. See Woods Gordon Report, 450.

59 Marsha A. Chandler, “The Politics of Public Enterprise,” in Prichard (ed.), Crown Corporations, 211, 215–16.

60 Tuohy and Chandler, “The Role of Government in the Insurance Arena in Ontario,” 11–16.

61 Bryman, Alan, “Organizational Studies and the Concept of Rationality,” Journal of Management Studies 21 (1984), 391–408.CrossRefGoogle Scholar

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65 Smith, “Political Jurisprudence, the ‘New Institutionalism,’ and the Future of Public Law,” 104; emphasis in the original.

66 Wildavsky, “Choosing Preferences by Constructing Institutions,” 4–5.

67 Doern and Phidd, Canadian Public Policy, 50–73.