This chapter deals with the ethical and moral bases of decision-making and looks at what decision makers must think about when they are considering policies. The chapter first examines the concepts of "justice" and "effectiveness" as two broad characteristics that state policies often set as goals. The different types of justice and the difficulty of determining what exactly is "just" are explored. The chapter then looks at the problem of dealing with efficiency and the task of determining the costs and benefits of a policy. Next, the chapter looks at different modes of policy-making (market-based vs. authority-based) and explores the advantages and disadvantages of each.