Comprehensive Overview of Policy Analysis and Design: Instruments, Costs, and Lessons Learned

1. 4 August 2008 - SPA508 Policy Analysis & Design- Major Instruments: Mandates, Inducements, Capacity Building, System Change Why usesd Costs & benefits Factors affecting costs Government capacity Fiscal resources Knowledge Lessons learned from interviews with policy analysts

2. Where we have been • Defined a policy problem • Identified evidence to define the problem and suggest solutions • Identified values and trade offs (or conflicts) to guide design of a policy and its evaluation • Recognized political and budgetary factors that serve as opportunities or constraints • Developed outcomes and indicators to track implementation and determine success

3. Instruments • From McDonnell & Elmore • Mandates • Incentives • Capacity Building • System Changing • From Bardach – • Taxes • Education & Consultation • Information

4. Mandates or Rules • Expected effect: compliance – someone or somebody will do what is required • Wearing motorcycle helmets • Building accessible to disabled persons • Costs • Normally policy maker does not pay to get compliance (unfunded mandates), but • Pays cost of enforcement • Targets may pay to avoid (pay fines, lobbying, legal action)

5. Mandates (Con’t) • Beneficiaries are • Specific individuals or groups (making buildings accessible benefits disabled persons) • Community as a whole – e.g., environmental regulations or food safety codes • Who benefits by requiring motorcycle helmets?

6. Mandates (Cont’d) • Assume what is being mandated • Is something everyone affected should be able to do • Would not occur or would not occur often enough or consistently enough without a rule • Ex: speed limits, compulsory school attendance, food labeling • Amount spent on enforcement is directly related to compliance rate

7. Inducements aka subsidies & grants • Transfer money to agencies or individuals to produce goods or services • A program (programs for children whose families are homeless) or • A physical project (build something), e.g., funds to build homeless shelters

8. Inducements (Cont’d) • Oversight costs (assuring compliance) • Usually inducement have guidelines & conditions which specify important component, such as • Who is eligible • Indicators of quality, • Expected outcomes • Should have a mechanism to make sure recipients comply, reporting requirements, audits, inspections • May remove funding if conditions are met or related violations (In US universities can lose all federal funding if they do no protect human research subjects)

9. Inducements (Cont’d) • Assumes • Things of value would not be produced or produced as frequently or consistently without additional money • Money is a way to get performance when what is needed can be produced with money (does not require added capacity) • Receiver oriented toward the future • An opportunity cost with a future benefit

10. Inducements (Cont’d) • Differ from mandates • Use incentives, rather than coercion, to encourage performance • Production of value is an outcome (not compliance) • May be used to redistribute wealth • Need to monitor to make sure that wealth creation was appropriate (that the rich do not get richer) and that amount and quality of goods & services did not decrease

11. Capacity Building • Transfer of money to individuals or agencies to obtain (invest in) future benefits, e.g. • Increasing skills of Penang’s labor force • Developing research capacity of universities • Returns may be uncertain, intangible, difficult to measure and distant • Costs borne by government & the public (investors) • Benefits in short run to agencies and individuals – in the long run to society

12. Capacity Building & Other Tools • Mandates & inducements have tangible effects that are close at hand • Capacity building has distant & uncertain impact • Do you consider policies in some EU countries & S’pore to encourage families to have children inducements or capacity building? • How do investments in basic research illustrate the meaning of capacity building?

13. System Changing • Transfer of official authority to expand or narrow who receives public money to provide services, e.g., • Allow private schools to receive public money • Allow non-gov’t organizations to deliver mail • Funding only shelters that provide mental health services • Changes service providers • May result in new agencies or organizations and/or • Some types of agencies may disappear • Done to • Increase efficiency • Increase a social welfare value • Assumes • Current situation/system is not working • A change in who does what will change what is produced or the efficiency of productions

14. System Changing Strategies • Financing & contracting • Changing market (changing level of gov’t participation) • Modify framework of economic activity • Provide a new service – may also be considered as capacity building

15. Other instruments (Bardach) • Taxes – most likely to raise gov’t revenue • Popular taxes: “sin” taxes & user fees • Education & consultation • Information – issues associated with disclosure

16. Designing a Policy: Government Capacity as a Constraint • Governmental capacity • Does the gov’t have sufficient personnel with the needed skills and adequate time to implement the policy? • If the gov’t does not have sufficient personnel can the policy be implemented? How?

17. Designing a Policy: Fiscal Capacity as a Constraint • Financial resources • Does the gov’t have sufficient financial resources to implement the policy? • If sufficient funds (slack resources) are not available policy makers will probably opt for the policy that costs less

18. Designing a Policy: Information as a Constraint • Political intelligence – knowledge of stakeholders interests • Strategic response – ability to implement & ability to estimate response (effectiveness) • Analytical information – knowledge needed to demonstrate how the policy will work under different conditions

19. McDonnell article: Reading along • On problem definitions, p 145 • On political opposition, p 148 • On past policy choices, p. 149

20. Exercise • For assigned instrument (mandates, inducements, capacity building, or system changing) • Choose a policy and discuss • Why the instrument is appropriate/realistic • The expected costs & who would bear them • The expected benefits • Develop a short presentation (max 10 minutes) titled “Considerations in using [instrument] to design effective policies”

21. Policy Analysts • For many bureaucrats focus on interpreting policies, making sure policies are applied correctly, responding to customer complaints • A few spoke of • Conducting surveys • Economic analysis • Strategic planning • Results-based management

22. Interviews (Cont’d) • One noted value of knowledge could learn about better concepts, theories, hypotheses • One noted gov’t programs failed b/c of not establishing that there was adequate funding, time, & personnel • Nature of problem should justify resources used • Literature review keeps one from reinventing the wheel

23. Next week • Download & review “Logic Model Workbook” pp. 5-22 • Think about how one could use a logic model to create a disaster training program for teachers & school children