Well if a bunch of people are writing policy together on a wiki it's better policy in that it's a better representation of what the group wants because its written by everyone, rather than one or two people who may filter what other people want.
OK, I'm going to take issue with this statement, at least in this very general formulation (which has quite a techno-determinist ring to it - it sounds like you're saying that policy written using wikis is automatically better/more representative policy because wikis were used in writing it).
I agree that this can be the result, but whether it is or not depends crucially on the dynamics of the the group of people participating in the process. Wiki-based projects are no more and no less subject to groupthink, flamewars, and conceptual blind spots than any other collaborative content development projects. Whether they 'work' or not (that is, capture a wide range of views and achieve a consensus that most contributors can live with) depends on whether there's an active desire (driven by the community of contributors) to listen to, engage with, and come to a consensus with these diverse views.