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Decision Support Tool
 Step 4 Link to training 

Step 4: Evaluating the MBI shortlist

Based on the answers to the questions in the decision tree in step 3, some types of instruments may be eliminated from further consideration, while a range of alternative designs for other instruments may be postulated.

In order to reduce the number of MBI variations to be developed in detail in step 5, a preliminary assessment of alternative designs should be conducted based on broad public policy evaluation criteria, namely:

  • effectiveness in achieving the policy objective;
  • efficiency in maximising net social benefits;
  • administrative workability; and
  • equity and stakeholder acceptability.

Instrument assessment during the early stages of shortlisting and design is likely to contribute much more to the development of effective instruments than assessments conducted late in the policy process to meet regulatory assessment requirements or to support public consultation.


Further information to aid with step 4 can be obtained from contacting an MBI expert or practitioner by using the Little Orange Book on the program web site at www.marketbasedinstruments.gov.au or contacting your relevant State government agency.