Policy Analysis and the Evaluation Criteria of Public Policy

Policy Analysis and the Evaluation Criteria of Public Policy

by: Yudo Anggoro, University of North Carolina at Charlotte

Introduction

The fields of political science, public administration, law, and economics have had a common mission of rescuing public policy from the irrationalities and indignities of politics (Stone, 2012). All these fields and knowledge aim to make policy cannot be separated from rational, analytical, and scientific method; and ignoring the reasoning and rationality is disastrous for public policy. As a result, American political culture since the beginning used rationality as its core.

The effort to put rationality as the main value in public policy continued as at the turn of the twentieth century, progressive reformers sought to render public policy more scientific and less political by removing policy-making authority from elected bodies and giving it to expert commissions and professional city managers (Stone, 2012). The endeavor for aligning science and rationality to the government continued in the twentieth century with Herbert Simon’s call for a science administration and the development of college and graduate school programs in public policy. Since then, the principle of reasoning and rationality bloomed in the area of public policy, and every policy analyst in the United States is well trained using those principles and perspectives in every public policy case.

Holding the principles of rationality for public policy analyst, it would be interesting if we take a closely look at the currently facing political crisis created by leaders in the two major political parties failing to find common ground on which to base governance decisions relative to the national budget. As a result of a deal made last summer, the budget will face sequestration at the end of this calendar year. This would trigger significant cuts across the budget, including to the US military. Not surprisingly, the Secretary of Defense and many others are making dire pronouncements should these cuts be made.

As a result, several political officials have argued using political statements that when deciding how much to spend on non-Defense programs it is possible to use economic analysis. With defense, however, “a country must spend whatever it needs to.” Similar political pronouncements were made using bombastic statements such as “You can’t place a value on a human life,” and “We must educate everyone to the same high standards”. This essay attempts to answer why those political pronouncements are simplistic statement that pandering to public ignorance, as well as such statements violating reasoning, efficiency, and equity in public policy. This essay starts the discussion by explaining the function of policy analysis, then continues with the discussion of public policy principles: rationality, efficiency, and equity.

Policy Analysis

The term policy analysis has many functions. It may analyze the components of public policy making process, such as policy formation and policy implementation; it may also study the substantive policy issues. But most often, policy analysis refers to the investigation of alternative policy options. Policy analysis does not intend to make policy decisions, but rather to inform the process of public deliberation and debate (Kraft and Furlong, 2010). Policy analysis works by collecting and interpreting information that clarifies the causes and effects of policy issues and the consequences of using one policy alternative to another.

For policy analysis, doing analysis implies bringing scientific knowledge to the political process. It means that policy analysis involves both descriptive and empirical study to determine the facts of a given situation in public space. Based on the study of policy analysis, a policy analyst brings valuable information to both policymakers and the public.

Given the nature of problems in public space, we may argue that the study of public policy and the role of policy analysis are complex. Public problems are mostly complex and multifaceted, involving various actors, and creating disagreements among actors. Therefore, it is important for policy analysis to satisfy the need for pertinent information and thoughtful, impartial assessment in the policy-making process (Kraft and Furlong, 2010). However, even though policy analysis is an intellectual activity, it has huge political influence. The way policy analysts analyze and give their judgment always reflects the basic political reality.

One of the natures of politics is that it often touches controversial issues. Those issues are sometimes involving fundamental questions of values and moral, and public may put their intense view on them. The decision made by policy analysis process usually reflects some combination of political preferences and various assessments of the problem and possible solutions to it (Kraft and Furlong, 2010). Policy analysis has the capability to clarify the problem, the policy choices and alternatives available, and how each alternative stands up against the different standards of principles that might be used, such as efficiency, rationality, and equity.

In order to be able to analyze the policy in public domain, we need to understand the different kind of policy analysis. According to Kraft and Furlong (2010), policy analysis can be categorized into three approaches: Scientific, Professional, and Political. All approaches serve valid purposes but they have varying goals and objectives and use different methods. The objective of scientific approach is to search for truth and build theory about policy actions and effects. This approach uses scientific method to test hypotheses and theories, but it may also the limitation of the study: too theoretical and not adequately address information needs of decision makers.

The objective of professional approach is to analyze policy alternatives for solving public problems. This approach synthesizes research and theory to understand consequences of policy alternatives, and to evaluate current program and their effects. The limitation of this approach is having too narrow research and analysis due to time and resource constraints.

The objective of political approach is to advocate and support preferred policies. This approach uses legal, economic, and political arguments consistent with value position. It aims to influence policy debate to realize organizational goals and values. The limitation of political approach is that it is often ideological and partisan, and may not be credible. It may lack analytic depth, also its level of objectivity and rigor varies. Many politicians often uses this approach to support their preferred policies and to influence public opinion.

Reasoning and Rationality

The effort of making public policy rational depends on a model of reasoning, or in this case is rational decision making (Stone, 2012). The model of rational decision making works by following well defined steps, which are (1) identify objectives, (2) identify alternative courses of action for achieving objectives, (3) predict the possible consequences of each alternative, (4) evaluate the possible consequences of each alternative, (5) select the alternative that maximizes the attainment of objectives.

The most common approach to policy analysis is to capture policy as a series of analytical steps or stages. We can categorize these stages as rational problem solving or rational decision making. In rational decision making for public policy, the steps are to define and analyze the problem, construct policy alternatives, develop evaluation criteria, assess alternatives, and draw conclusions (Kraft and Furlong, 2010).

However, Stone (2012) argues that the rational decision making model in public policy often ignores emotional feelings and moral intuitions. Both factors are important parts of human motivation and precious parts of human life experience. For example, the rational model might help to evaluate the security risks to the US of closing Guantanamo versus keeping it open, but this model does not help to judge whether anti-terrorist policy is morally right, or to understand how the US policy affects the minds of the non-US people.

Efficiency

In the simplest way, efficiency is getting the most for the least, or achieving objective for the lowest cost. In economics term, efficiency may exist when a reallocation of resources can not improve aggregate welfare. All these definitions imply that efficiency is getting the most out of something.

Even though the definition of efficiency is simple and everyone can agree with it, applying efficiency to public policy is not simple. We need to make assumptions about who and what counts as important (Stone, 2012). In the political process, there are no correct answers to these questions. Instead, the answer may be built from a set of technical analysis of efficiency, and by offering different sets of assumptions we can capture the preferred outcomes as being the most efficient.

Assumptions of Efficiency

Stone (2012) offers several assumptions of efficiency. First, assuming that public space is like a market. In the theory of market, people are rational and self interested. People have goals, collect information about the best way to achieve their goals, and make decisions based on their assessment of which alternatives will maximize their self-interest.

The second assumption of efficiency is full information. In a market, in order to result the best situation for everyone, all actors must have complete and accurate information about the available alternatives. The problem in this assumption is that full information is rarely met. A solution for this problem is by providing professional quality ratings such as licensing or certificate.

The third assumption is voluntarism. The market theory assumes that people engage in trade voluntarily, but it does not say anything about terminating market. We can see this situation when the stronger side suddenly terminates the relationship with the weaker side. In the real world, when we take a look at how markets actually work, many lack the voluntarism necessary to produce social welfare.

The next assumptions in public policy are public goods and externalities. Public goods are goods that are non rival and non excludable. Non excludable means that we cannot exclude people from consuming the goods, and non rival means that when goods are consumed, the cost for the next additional people to consume those goods is zero. Externalities are activities of one actor that affect other actors outside the market mechanism. Solutions for addressing public goods and externalities problem are by assigning property rights and tax, depend on the type of the problem.

The last assumption of efficiency is competition. The market theory assumes that producers and sellers need to compete so that it can improve efficiency and make everybody better off. But the dilemma is that different competitive strategy may benefit some people and make other people worse-off. Competition itself does not guarantee improvements for everyone (Stone, 2012).

Equity

The concept of equity has two different meanings in public policy, which are: process equity and outcomes equity (Friedmann, 2002). Process equity refers to the decision making process that is used, is it voluntary, open, and fair to all participants? (Kraft and Furlong, 2010). Outcome equity refers to the fair distribution of societal goods such as wealth, income, or political power.

The equity criteria usually are the main focus when talking about distribution of policies, such as tax reform, welfare reform, and educational or health service. In distributing policy, all sides seek for equity. Conflict and crisis occur over how sides envision a fair distribution of whatever is at stake.

However, we need to pay attention to the paradox of distribution problem (Stone, 2012). Equality often means inequality, and equal treatment often means unequal treatment. The paradox is that the same distribution may look equal or unequal, depending on where you focus. Stone (2012) uses the word “equality” to denote sameness and to signify the part of a distribution that contains uniformity, while equity is used to denote distributions regarded as fair, even though they contain both equalities and inequalities.

Dimensions of Equality

Stone (2012) offers his dimensions of equality. The first dimension is membership. In this dimension, the issue is to reconcile conflicts over membership: who should count as a member of the group of recipients? The second dimension is merit, which represents the idea of reward for individual accomplishment. Merit can cause problems when we try to figure out how to quantify and identify accomplishment to build it into policy.

The third dimension is rank. It says that for purposes of distributing resources, there are relevant differences between segments of a larger group, and that resources should be distributed on the basis of these segments rather than individual differences. Even if we consider the rank-based distribution, there are many ways to challenge distribution as inequitable, for example by asking whether the rank is correctly drawn or different ranks represent different skills, knowledge, and other relevant factors.

The fourth dimension is group-based distribution. It implies that some major divisions in society are relevant to distributive equity, and that membership of groups sometimes needs to outweigh individual characteristics in determining equal distribution. Societies with liberal individualist ideologies usually use group-based distribution as a tool to solve the problem in the merit distribution.

The fifth dimension of equity is need. This indicates that we can see equity from the perspective of who needs the goods. To take something and make it part of a larger entity, we need to expand the boundaries of what is being distributed (Stone, 2012). The sixth dimension is value. The value of some goods is measured from the quality of relationships rather than tangible or material properties.

Dimensions no.7, 8, and 9 of equity are competition, lotteries, and elections. These dimensions focus on the process of distribution. The process of distribution can be divisive and socially disruptive, or orderly and socially cohesive. In this case, process of distribution is important because fairness does not only include fairness in result but also fair decision making process.

Assessing Political Statements based on Policy Evaluation Criteria

Based on our discussion on values and principles of rationality, efficiency, and equity, policy analysts may evaluate the current political crisis in the United States that forces politician to issue controversial political statements to the public domain. We often heard a statement such as, “a country must spend whatever it needs to” when politicians were discussing defense budget. Similar political pronouncements were made using pompous and bombastic statements such as “You can’t place a value on a human life,” and “We must educate everyone to the same high standards”. From our previous discussion on policy analysis criteria, policy analysts may refer to those controversial statements as simplistic statement that pandering to public ignorance, as well as such statements violating reasoning, efficiency, and equity in public policy.

First, based on the type of policy analysis, we may conclude that politician use political approach to analyze public policy (Kraft and Furlong, 2010). The aim of political approach in policy analysis is to support preferred policies by politician. Different from the scientific approach that aims to seek truth and build theory about policy actions and effects, politicians use legal, economic, and political argument to influence policy debate and to achieve their organizational (party) goals and value position. This approach indeed is partisan and may not be credible, but it may attract controversy as well as sympathy from public. From the perspective of policy analysts, their statement might be lack of analytic depth and rigor, but as long as they can achieve their goals, they do not really pay attention to the analytical quality.

From the efficiency perspective of policy analysis, a political statement such as “a country must spend whatever it needs to” when debating on defense policy may violates some of the efficiency assumptions. For example, we can use cost and benefit analysis to measure the cost and benefit of defense policy. This policy is efficient as long as the benefit of the program outweigh the cost. When we “must spend whatever it needs to”, we can suspect that the result would not be efficient.

The same thing goes for the statement such as “we can’t put value on human life.” Cost and Benefit Analysis is allowing us to use several approach in measuring abstract thing such a human life. Using scientific approach of policy analysts, is possible to use several assumptions to measure the value of human life, and use this valuation as a base for making health policy, for example.

From the assumption of full information in efficiency, everyone need to have complete and accurate information about the available alternatives before making decision on certain policies. If politician conceal any information whenever they issue political statement, it would not be efficient as well.

If we analyze using the rational criteria of policy analysis, the bombastic political statement may not be rational as well. Policies can be considered as rational if they follow all scientific steps from identify the policy objectives, identify alternative courses of action for achieving objectives, predict the possible consequences of each alternative, evaluate the possible consequences of each alternative, and select the alternative that maximizes the attainment of objectives. If politicians do not use these steps before supporting certain policies, then their statements might not be rational.

From the equity standpoint, a political statement such as “We must educate everyone to the same high standards” may not follow equity principles. Distributing policy equally, or treating everyone equally, does not always mean everyone get the same amount of goods. We can analyze from any dimensions of equity for this statement: merit, rank, group-based distribution, or need. If everyone receives the same high standards of education level, it does not mean that everyone needs that standard. A person who is interested in doing research and pursuing a career as a professor may need a doctoral level of education. But for another person who wants to be a successful entrepreneur might only need bachelor degree in business, or an MBA degree.

Conclusion

This essay attempts to evaluate why controversial statements from politician can be considered as simplistic statement as well as violating reasoning, efficiency, and equity principles in public policy. Using the scientific approach, policy analysts should be able to evaluate certain policy, or certain statements by politician, and use this evaluation as a recommendation to make policy for public.

References

Friedmann, L.S. (2002). The Microeconomics for Public Policy Analysis. Princeton, NJ: Princeton University Press.

Kraft, M.E. and Furlong, S.R. (2010). Public Policy: Politics, Analysis, and Alternatives. Washington, DC: CQ Press.

Rosen, H. (2002). Public Finance. New York, NY: McGraw-Hill.

Stone, D. (2012). Policy Paradox: The Art of Political Decision Making. New York, NY: W.W.Norton.