Policy analysis

Policy analysis is "determining which of various alternative policies will most achieve a given set of goals in light of the relations between the policies and the goals". However, policy analysis can be divided into two major fields. Analysis of policy is analytical and descriptive—i.e., it attempts to explain policies and their development. Analysis for policy is prescriptive—i.e., it is involved with formulating policies and proposals (e.g., to improve social welfare). The area of interest and the purpose of analysis determines what type of analysis is conducted. A combination of policy analysis together with program evaluation

Program evaluation

Project evaluation is a systematic method for collecting, analyzing, and using information to answer questions about projects, policies and programs, particularly about their effectiveness and efficiency...

 would be defined as Policy studies

Policy studies

Policy Studies could be defined as the combination of policy analysis and program evaluation. It "involves systematically studying the nature, causes, and effects of alternative public policies, with particular emphasis on determining the policies that will achieve given goals."Policy Studies also...

.

Policy Analysis is frequently deployed in the public sector

Public sector

The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

, but is equally applicable to other kinds of organizations. Policy analysis has its roots in systems analysis

Systems analysis

Systems analysis is the study of sets of interacting entities, including computer systems analysis. This field is closely related to requirements analysis or operations research...

 as instituted by United States Secretary of Defense

United States Secretary of Defense

The Secretary of Defense is the head and chief executive officer of the Department of Defense of the United States of America. This position corresponds to what is generally known as a Defense Minister in other countries...

 Robert McNamara

Robert McNamara

Robert Strange McNamara was an American business executive and the eighth Secretary of Defense, serving under Presidents John F. Kennedy and Lyndon B. Johnson from 1961 to 1968, during which time he played a large role in escalating the United States involvement in the Vietnam War...

 during the Vietnam War

Vietnam War

The Vietnam War was a Cold War-era military conflict that occurred in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. This war followed the First Indochina War and was fought between North Vietnam, supported by its communist allies, and the government of...

.

Approaches

Although various approaches to policy analysis exist, three general approaches can be distinguished: the analycentric, the policy process, and the meta-policy approach.

The analycentric approach focuses on individual problems and their solutions; its scope is the micro-scale and its problem interpretation is usually of a technical nature. The primary aim is to identify the most effective and efficient solution in technical and economic terms (e.g. the most efficient allocation of resources).

The policy process approach puts its focal point onto political processes and involved stakeholders; its scope is the meso-scale and its problem interpretation is usually of a political nature. It aims at determining what processes and means are used and tries to explain the role and influence of stakeholders within the policy process. By changing the relative power and influence of certain groups (e.g., enhancing public participation and consultation), solutions to problems may be identified.

The meta-policy approach is a systems and context approach; i.e., its scope is the macro-scale and its problem interpretation is usually of a structural nature. It aims at explaining the contextual factors of the policy process; i.e., what are the political, economic and socio-cultural factors influencing it. As problems may result because of structural factors (e.g., a certain economic system or political institution), solutions may entail changing the structure itself.

Methodology

Policy analysis is methodologically diverse using both qualitative methods and quantitative methods, including case studies, survey research

Survey research

Survey research a research method involving the use of questionnaires and/or statistical surveys to gather data about people and their thoughts and behaviours. This method was pioneered in the 1930s and 1940s by sociologist Paul Lazarsfeld. The initial use of the method was to examine the effects...

, statistical analysis, and model building among others. One common methodology is to define the problem and evaluation criteria; identify all alternatives; evaluate them; and recommend the best policy agenda per favor.

Models

Many models exist to analyze the creation and application of public policy. Analysts use these models to identify important aspects of policy, as well as explain and predict policy and its consequences.

Some models are:

Institutional model

Public policy is determined by political institutions, which give policy legitimacy. Government universally applies policy to all citizens of society and monopolizes the use of force in applying policy. The legislature

Legislature

A legislature is a kind of deliberative assembly with the power to pass, amend, and repeal laws. The law created by a legislature is called legislation or statutory law. In addition to enacting laws, legislatures usually have exclusive authority to raise or lower taxes and adopt the budget and...

, executive

Executive (government)

Executive branch of Government is the part of government that has sole authority and responsibility for the daily administration of the state bureaucracy. The division of power into separate branches of government is central to the idea of the separation of powers.In many countries, the term...

 and judicial branches of government are examples of institutions that give policy legitimacy.

Process model

Policy creation is a process following these steps:

• Identification of a problem and demand for government action.
• Formulation of policy proposals by various parties (e.g., congressional committees, think tanks, interest groups).
• Selection and enactment of policy; this is known as Policy Legitimation.
• Implementation of the chosen policy.
• Evaluation of policy.

This model, however, has been criticized for being overly linear and simplistic. In reality, stages of the policy process may overlap or never happen. Also, this model fails to take the multiple actors attempting the process itself as well as each other, and the complexity this entails.

Rational model

The rational model of decision-making is a process for making logically sound decisions in policy making in the public sector, although the model is also widely used in private corporations. Herbert Simon

Herbert Simon

Herbert Alexander Simon was an American political scientist, economist, sociologist, and psychologist, and professor—most notably at Carnegie Mellon University—whose research ranged across the fields of cognitive psychology, cognitive science, computer science, public administration, economics,...

, the father of rational models, describes rationality as “a style of behavior that is appropriate to the achievement of given goals, within the limits imposed by given conditions and constraints”. It is important to note the model makes a series of assumptions in order for it to work, such as:

• The model must be applied in a system that is stable,

• The government is a rational and unitary actor and that its actions are perceived as rational choices,

• The policy problem is unambiguous,

• There are no limitations of time or cost.

Indeed, some of the assumptions identified above are also pin pointed out in a study written by the historian H.A. Drake, as he states:

In its purest form, the Rational Actor approach presumes that such a figure [as Constantine] has complete freedom of action to achieve goals that he or she has articulated through a careful process of rational analysis involving full and objective study of all pertinent information and alternatives. At the same time, it presumes that this central actor is so fully in control of the apparatus of government that a decision once made is as good as implemented. There are no staffs on which to rely, no constituencies to placate, no generals or governors to cajole. By attributing all decision making to one central figure who is always fully in control and who acts only after carefully weighing all options, the Rational Actor method allows scholars to filter out extraneous details and focus attention on central issues.

Furthermore, as we have seen, in the context of policy rational models are intended to achieve maximum social gain. For this purpose, Simon identifies an outline of a step by step mode of analysis to achieve rational decisions. Ian Thomas describes Simon's steps as follows:

1. Intelligence gathering— data and potential problems and opportunities are identified, collected and analyzed.
2. Identifying problems
3. Assessing the consequences of all options
4. Relating consequences to values— with all decisions and policies there will be a set of values which will be more relevant (for example, economic feasibility and environmental protection) and which can be expressed as a set of criteria, against which performance (or consequences) of each option can be judged.
5. Choosing the preferred option— given the full understanding of all the problems and opportunities, all the consequences and the criteria for judging options.

In similar lines, Wiktorowicz and Deber describe through their study on ‘Regulating biotechnology: a rational-political model of policy development’ the rational approach to policy development. The main steps involved in making a rational decision for these authors are the following:

1. The comprehensive organization and analysis of the information
2. The potential consequences of each option
3. The probability that each potential outcome would materialize
4. The value (or utility) placed on each potential outcome.

The approach of Wiktorowicz and Deber is similar to Simon and they assert that the rational model tends to deal with “the facts” (data, probabilities) in steps 1 to 3, leaving the issue of assessing values to the final step. According Wiktorowicz and Deber values are introduced in the final step of the rational model, where the utility of each policy option is assessed.

Many authors have attempted to interpret the above mentioned steps, amongst others, Patton and Sawicki who summarize the model as presented in the following figure (missing):

1. Defining the problem by analyzing the data and the information gathered.
2. Identifying the decision criteria that will be important in solving the problem. The decision maker must determine the relevant factors to take into account when making the decision.
3. A brief list of the possible alternatives must be generated; these could succeed to resolve the problem.
4. A critical analyses and evaluation of each criterion is brought through. For example strength and weakness tables of each alternative are drawn and used for comparative basis. The decision maker then weights the previously identified criteria in order to give the alternative policies a correct priority in the decision.
5. The decision-maker evaluates each alternative against the criteria and selects the preferred alternative.
6. The policy is brought through.

The model of rational decision-making has also proven to be very useful to several decision making processes in industries outside the public sphere. Nonetheless, many criticism of the model arise due to claim of the model being impractical and lying on unrealistic assumptions. . For instance, it is a difficult model to apply in the public sector because social problems can be very complex, ill-defined and interdependent. The problem lies in the thinking procedure implied by the model which is linear and can face difficulties in extra ordinary problems or social problems which have no sequences of happenings. This latter argument can be best illustrated by the words of Thomas R. Dye, the president of the Lincoln Center for Public Service, who wrote in his book `Understanding Public Policy´ the following passage:

There is no better illustration of the dilemmas of rational policy making in America than in the field of health…the first obstacle to rationalism is defining the problem. Is our goal to have good health — that is, whether we live at all (infant mortality), how well we live (days lost to sickness), and how long we live (life spans and adult mortality)? Or is our goal to have good medical care — frequent visits to the doctor, wellequipped and accessible hospitals, and equal access to medical care by rich and poor alike?

The problems faced when using the rational model arise in practice because social and environmental values can be difficult to quantify and forge consensus around. Furthermore, the assumptions stated by Simon are never fully valid in a real world context.

However, as Thomas states the rational model provides a good perspective since in modern society rationality plays a central role and everything that is rational tends to be prized. Thus, it does not seem strange that “we ought to be trying for rational decision-making”.

Decision Criteria for Policy Analysis — Step 2

As illustrated in Figure 1, rational policy analysis can be broken into 6 distinct stages of analysis. Step 2 highlights the need to understand which factors should be considered as part of the decision making process. At this part of the process, all the economic, social, and environmental factors that are important to the policy decision need to be identified and then expressed as policy decision criteria. For example, the decision criteria used in the analysis of environmental policy is often a mix of —

• Ecological impacts — such as biodiversity, water quality, air quality, habitat quality, species population, etc.

• Economic efficiency — commonly expressed as benefits and costs.

• Distributional equity — how policy impacts are distributed amongst different demographics. Factors that can affect the distribution of impacts include location, ethinicity, income, and occupation.

• Social/Cultural acceptability — the extent to which the policy action may be opposed by current social norms or cultural values.

• Operational practicality — the capacity required to actually operationalize the policy. For example,

• Legality — the potential for the policy to be implemented under current legislation versus the need to pass new legislation that accommodates the policy.

• Uncertainty — the degree to which the level of policy impacts can be known.

Some criteria, such as economic benefit, will be more easily measurable or definable, while others such as environmental quality will be harder to measure or express quantitatively. Ultimately though, the set of decision criteria needs to embody all of the policy goals, and overemphasising the more easily definable or measurable criteria, will have the undesirable impact of biasing the analysis towards a subset of the policy goals.

The process of identifying a suitably comprehensive decision criteria set is also vulnerable to being skewed by pressures arising at the political interface. For example, decision makers may tend to give "more weight to policy impacts that are concentrated, tangible, certain, and immediate than to impacts that are diffuse, intangible, uncertain, and delayed."^8. For example, with a cap-and-trade system for carbon emissions the net financial cost in the first five years of policy implementation is a far easier impact to conceptualise than the more diffuse and uncertain impact of a country's improved position to influence global negotiations on climate change action.

Decision Methods for Policy Analysis — Step 5

Displaying the impacts of policy alternatives can be done using a policy analysis matrix (PAM) such that shown in Table 1. As shown, a PAM provides a summary of the policy impacts for the various alternatives and examination of the matrix can reveal the tradeoffs associated with the different alternatives.

Table 1. Policy analysis matrix (PAM) for SO2 emissions control.

Once policy alternatives have been evaluated, the next step is to decide which policy alternative should be implemented. This is shown as step 5 in Figure 1. At one extreme, comparing the policy alternatives can be relatively simple if all the policy goals can be measured using a single metric and given equal weighting. In this case, the decision method is an exercise in benefit cost analysis (BCA).

At the other extreme, the numerous goals will require the policy impacts to be expressed using a variety of metrics that are not readily comparable. In such cases, the policy analyst may draw on the concept of utility to aggregate the various goals into a single score. With the utility concept, each impact is given a weighting such that 1 unit of each weighted impact is considered to be equally valuable (or desirable) with regards to the collective well-being.

Weimer and Vining also suggest that the "go, no go" rule can be a useful method for deciding amongst policy alternatives^8. Under this decision making regime, some or all policy impacts can be assigned thresholds which are used to eliminate at least some of the policy alternatives. In their example, one criterion "is to minimize SO2 emissions" and so a threshold might be a reduction SO2 emissions "of at least 8.0 million tons per year". As such, any policy alternative that does not meet this threshold can be removed from consideration. If only a single policy alternative satisfies all the impact thresholds then it is the one that is considered a "go" for each impact. Otherwise it might be that all but a few policy alternatives are eliminated and those that remain need to be more closely examined in terms of their trade-offs so that a decision can be made.

Case Study Example of Rational Policy Analysis Approach

To demonstrate the rational analysis process as described above, let’s examine the policy paper “Stimulating the use of biofuels in the European Union: Implications for climate change policy” by Lisa Ryan where the substitution of fossil fuels with biofuels has been proposed in the European Union (EU) between 2005–2010 as part of a strategy to mitigate greenhouse gas emissions from road transport, increase security of energy supply and support development of rural communities.

Considering the steps of Patton and Sawicki model as in Figure 1 above, this paper only follows components 1 to 5 of the rationalist policy analysis model:

1. Defining The Problem – the report identifies transportation fuels pose two important challenges for the European Union (EU). First, under the provisions of the Kyoto Protocol to the Climate Change Convention, the EU has agreed to an absolute cap on greenhouse gas emissions; while, at the same time increased consumption of transportation fuels has resulted in a trend of increasing greenhouse gas emissions from this source. Second, the dependence upon oil imports from the politically volatile Middle East generates concern over price fluctuations and possible interruptions in supply. Alternative fuel sources need to be used & substituted in place of fossil fuels to mitigate GHG emissions in the EU.
2. Determine the Evaluation Criteria – this policy sets Environmental impacts/benefits (reduction of GHG’s as a measure to reducing climate change effects) and Economical efficiency (the costs of converting to biofuels as alternative to fossil fuels & the costs of production of biofuels from its different potential sources)as its decision criteria. However, this paper does not exactly talk about the social impacts, this policy may have. It also does not compare the operational challenges involved between the different categories of biofuels considered.
3. Identifying Alternative Policies – The European Commission foresees that three alternative transport fuels: hydrogen, natural gas, and biofuels, will replace transport fossil fuels, each by 5% by 2020.
4. Evaluating Alternative Policies – Biofuels are an alternative motor vehicle fuel produced from biological material and are promoted as a transitional step until more advanced technologies have matured. By modelling the efficiency of the biofuel options the authors compute the economic and environmental costs of each biofuel option as per the evaluation criteria mentioned above.
5. Select The Preferred Policy – The authors suggest that the overall best biofuel comes from the sugarcane in Brazil after comparing the economic & the environmental costs. The current cost of subsidising the price difference between European biofuels and fossil fuels per tonne of CO₂ emissions saved is calculated to be €229–2000. If the production of European biofuels for transport is to be encouraged, exemption from excise duties is the instrument that incurs the least transactions costs, as no separate administrative or collection system needs to be established. A number of entrepreneurs are producing biofuels at the lower margin of the costs specified here profitably, once an excise duty rebate is given. It is likely that growth in the volume of the business will engender both economies of scale and innovation that will reduce costs substantially.

Group model

The political system's role is to establish and enforce compromise between various, conflicting interests in society.

Elite model

Policy is a reflection of the interests of those individuals within a society that have the most power, rather than the demands of the mass.

Six-step model

1. Verify, define and detail the problem
2. Establish evaluation criteria
3. Identify alternative policies
4. Evaluate alternative policies
5. Display and distinguish among alternative policies
6. Monitor the implemented policy

See policy cycle for a five-step and an eight-step approach.

See also

• Policy studies
  Policy studies
  Policy Studies could be defined as the combination of policy analysis and program evaluation. It "involves systematically studying the nature, causes, and effects of alternative public policies, with particular emphasis on determining the policies that will achieve given goals."Policy Studies also...
  
  
• Public policy
  Public policy
  Public policy as government action is generally the principled guide to action taken by the administrative or executive branches of the state with regard to a class of issues in a manner consistent with law and institutional customs. In general, the foundation is the pertinent national and...
  
  
• Harris School of Public Policy Studies
  Harris School of Public Policy Studies
  The Irving B. Harris Graduate School of Public Policy Studies is the public policy school of the University of Chicago in Chicago, Illinois, USA. It is one of the top policy schools in the United States. It is located on the University's main campus in Hyde Park...
  
  
• Think tank
  Think tank
  A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
  
  s
• Eightfold Path (policy analysis)
  Eightfold Path (policy analysis)
  The Eightfold Path is a method of policy analysis assembled by Eugene Bardach, a professor at the Goldman School of Public Policy at the University of California, Berkeley. It is outlined in his book A Practical Guide for Policy Analysis: The Eightfold Path to More Effective Problem Solving, which...
  
  

Further reading

• Eugene Bardach, A Practical Guide for Policy Analysis: The Eightfold Path to More Effective Problem Solving

External links

• Policy Analysis for School Districts — from the Education Resources Information Center
  Education Resources Information Center
  ERIC - the Education Resources Information Center - is an online digital library of education research and information. ERIC is sponsored by the Institute of Education Sciences of the U.S. Department of Education...
  
   Clearinghouse on Educational Management, Eugene, Oregon
  Eugene, Oregon
  Eugene is the second largest city in the U.S. state of Oregon and the seat of Lane County. It is located at the south end of the Willamette Valley, at the confluence of the McKenzie and Willamette rivers, about east of the Oregon Coast.As of the 2010 U.S...
  
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• Think Tank Directory. A Guide to Independent Nonprofit Public Policy Research Organizations.