A policy is a guiding principle that leads a government or agency to make laws or to govern effectively. From a narrow angle, policy also refers to the rules and regulations made by an administrative department. Administrative regulations or administrative laws provide direct instruction for carrying out policy and provide rules for how a body is governed. In the United States, administrative regulations are one of the sources of law but the policy is not. However, in some countries, like China or Japan, a policy could be one of the sources of law. Policymaking is a never ending multi-stage cycle which begins by identifying a problem, setting an agenda, identifying goals, making policy, deciding the budget, adopting the policy, and evaluating the policy.

[Last updated in May of 2022 by the Wex Definitions Team]