The Unintended Consequences of Policy Initiation: A Study of the British Conservative Government's Property Policy in the 1970s

Abstract

This paper outlines the way in which governments often face immense problems in the successful implementation of their policies owing to unforeseen and unintended consequences. The case study is based on the Conservative Government's attempt to restructure the property market in Britain between 1970 and 1974. The paper argues that policy was initiated in ignorance of the environment in which it was to be implemented and created the conditions for an unintended boom in property prices. This unintended consequence forced the Government to react, but, it is argued, in so doing, it once again failed to appreciate how its policy ‘U’-turn would cause a crisis for the financial sector. Ultimately the Government was constrained by this problem and forced to change its policy for a third time. The conclusion which is drawn from this is that in a largely privately owned market economy there are limits beyond which governments cannot go in policy initiation without incurring unacceptable economic or political costs.