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A policy is a plan of action to guide decisions and actions. The term may apply to government, private sector organizations and groups, and individuals. The policy process includes the identification of different alternatives, such as programs or spending priorities, and choosing among them on the basis of the impact they will have. Policies in short can be understood as political, management, financial, and administrative mechanisms arranged to reach explicit goals.

Regulatory policies are policies that limit discretion of individuals and companies to make decisions freely and are supported by threat of sanctions or a fine.

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