This paper shows how interactive governance can be helpful in dealing with information asymmetries in the design and administration of public policy. It describes the checks and balances of a properly incentivized mechanism design of contextual or situational contracting that reveals information on diversity in demand for public intervention, deals with complexity, creates commitment to the public cause and disciplines uncooperative behavior. The contractual mode, moreover, discloses the actual trade-offs between rivalling criteria of good governance such as individual freedom, efficiency, distributional concerns and sustainability, deepening our insight in who gets – or pays for – what, when, where, how and why, as the key issues of policy analysis. Evidence from early applications is combined with suggestions for rolling out this new mode of relinking public policy, implementation and external control.

Reflection and debate initiates academically inspired discussions on issues that are on the current policy agenda.

The Internet of Things generates a wealth of data (big data) about personal behaviour, which can be used for marketing purposes. It brings about both benefits and costs in terms of societal welfare. Various forms of government intervention are needed to safeguard the public interests associated with these welfare effects. These public interest relate, on the one hand, to public availability of data and information, to repairing informational asymmetries, and on the other hand to providing personal security and privacy protection. This article discusses, from the perspective of the principal/agent approach to regulation, how the design of applications and systems in the Internet of Things can best be shaped. The example of the smart thermostat Toon® of the Dutch energy provider Eneco shows how an intensive collaboration between designers and software engineers may contribute to both proper data protection and to provide an incentive to save energy.