This study tests explanations of the choice of policy instruments. The comparative analysis of the Canadian and United States energy policies for the period 1973-1996 concludes that the choice of a policy instrument is a function of (1) whether the degree of constraint involved is consistent with the ideological predisposition of the party in power, (2) whether the agency needed to implement the instrument already exists, thus reducing costs, (3) whether a policy transfer from other jurisdictions is possible or whether policy harmonization is required, and (4) whether the target groups affected by the use of the instrument are likely to oppose its use.