Policy Analysis

Policy is determined by politics. It is the output against which the performance of the political system can be analysed. It includes the ideas and actions of government and other players (i.e. political parties, interest groups, legislature, bureaucracy, etc.) in response to societal problems. The study of public policy is central to the work of political scientists.
Public policy analysts consider how and why governments enact and implement policies to address public needs and demands. This focus requires an understanding of the functions of government. In other words, what do governments do? For better comprehension, some of the things governments do are listed below. The idea is to apply one of the methods listed to an encountered policy problem.
1. Taxes: This solution is used when there is inadequacy in government revenue and, when the structure of market prices are wrong, failing to capture the true economic opportunity costs.
2. Regulation: Governments usually regulate prices and outputs in natural monopolies, oligopolistic industries, or social behaviour in regard to health and safety issues.
3. Subsidies and Grants: They are often used to stimulate activities that neither the markets nor non-profit voluntary action appears to produce in adequate quantity or quality.
4. Provide a Service: Governments are entrusted with the responsibility of determining priority investments in public services and, provide these services when it has the means to carry out these investments.
5. Agency Budgets: Agencies implement governments’ policies and according to their performance, it may increase or decrease their budgets.
6. Information: Governments do this because of the visible and invisible cost nature of the activity (i.e. declining average and time spent consuming information).
7. Modify Structure of Private Rights: Governments do intervene with the aim of allocating the incidence of risk to the party that can manage it at the lowest social cost and; to lower the cost involved in administering any adjudicative system.
8. Modify Framework of Economic Activity: The aim is to reduce exploitation of the workers and consumers and also to regulate monopoly and oligopoly problems.
9. Education and Consultation: The aim is to have a qualified population or human capital and also, to inform people of a problem or an opportunity they may not be aware of.
10. Financing and Contracting: Governments may intervene in an inefficiently working capital or insurance markets or; modify governmental contracting and procurement machinery which is not operating well.
11. Bureaucratic and Political Reforms: Governments may undertake such reforms for political and symbolic considerations.
On the basis of the things governments do, public policies can be defined as intentional courses of action designed by government bodies and officials to accomplish a specific goal or objective. Policies are enacted in response to a perceived need or demand and are thus problem oriented. The process followed to enact governmental policies is usually an analytical approach called the policy analysis method. It can be defined as a systematic method using multiple approaches of inquiry and arguments to produce and transform policy-relevant information that may be utilised in political settings to resolve policy problems.
Policy analysis is thus a tool used to supply policy decision makers with reliable policy-relevant knowledge about pressing economic and social problems. This tool requires the support of efficient and relevant information related to the consequences of various alternatives. It follows six basic steps such as:
1. Verify, Define, and Detail the Problem: Defining the problem requires good research and judgement and, the definition may be revised throughout the policy process as more information comes to light.
2. Establish Evaluation Criteria: It helps to clarify the programme’s goals and objectives and, are the basis on which the proposed solutions will be judged.
3. Identify Alternative Policies: Though different policy option will often tackle different aspects of the problem, it is worth considering the full range of options in developing a short-list of potential solutions.
4. Evaluate and Compare Alternative Policies: Once the main policy option have been selected, the next step is to distinguish among the options based on the evaluation criteria established for this particular policy problem (Step 2).
5. Select the Best Policy among the Alternatives Considered: Policy recommendations must be justified. A strong analysis (Step 4) will likely point toward a particular policy recommendation. But, it is important that a policy recommendation be accompanied by a clear justification. The justification can be a conclusion of sorts.
6. Monitor and Evaluate the Implemented Policy: The objective of monitoring is to determine what is and is not working. Evaluations are generally conducted when monitoring reveals a problem or some other programme change motivates a closer look into the operations or results of policy/programmes.
Policy analysis is a very important activity undertaken during the policy making process for the purposes of pointing to the best policy alternatives available. It is a technical method towards decision-making. The decision-making, however, is about politics and is related to a particular political system. Indeed as explained above, different and sometimes opposing parties (i.e. political parties, pressure groups, legislature, etc.) may push forward claims/problems for which they want the decision makers to address. The claims will be chosen according to their substance or the power of the claimants. This implies that two options are available for the decision makers: either to choose among claims and claimants or to explore claims to increase their understanding of the concern and considerations of stakeholders and prioritize these concerns and considerations.
The political system will impact on the choices the decision makers have. If, for example, the political system is consensual, democratic and, with honest implementation agencies then, the only choice available will be to explore claims to expand the understanding of the issues. Otherwise, choice will be made among claims and claimants according to their powers. Policy analysis can only begin once the choice of which claim(s)/problem(s) to address is made.
Because of lack of political openness and of capacity, the countries in the Horn have traditionally followed an Idea-Imposition process for their decision making. In this method, a decision is made before the overall objectives are even agreed upon and then, all the available resources are used to support that decision, even force when necessary. The result was a debacle in terms of socio-economic advancement and has led to a fierce resistance from the public in general and, the periphery (in opposition to the centre) in particular. In some countries, like Ethiopia, the opposition was successful to topple the government and start a process of restructuring and reconstructing the state from scratch. It was thought by the new comers that the right path to progress was to devise a federal system of government based on ethnicity and territorial homogeneity. Although, on paper, the right system was created, the experience shows that it takes time to change the political culture of a country. Ethiopia, however, is on track for a rapid economic development with an average growth of over 6 per cent a year for the last decade.
Besides the domestic demand, there was also an international pressure to increase the inclusiveness and reach of the state. Indeed, the failure of the low-income countries around the globe has triggered a critical examination by the development and multilateral agencies of what policies best promote economic growth and reduce poverty. In 1992, at the United Nations Conference on Environment and Development (UNCED), a first call was made for low-income countries to prepare and implement National Strategies for Sustainable Development (NSSDs). Though given some latitude, countries were recommended to focus on the different dimensions of sustainable development, including economic, social, environmental and institutional dimensions. To have a more inclusive development, countries were advised to improve or restructure their decision-making process.
Concerns were also raised regarding the level of financial resources dedicated to promote economic growth and to reduce poverty and, the ways in which aid, including assistance from the multilateral agencies (e.g. IMF, World Bank) and debt relief have been delivered. To mitigate these concerns, the IMF and World Bank have inaugurated in 1999 a new assistance programme called the Poverty Reduction Strategy Papers (PRSPs). The low-income countries would prepare these strategies through a participatory process and, these PRSPs would provide the basis for external assistance as well as debt relief. The PRSPs would also provide the framework for improved aid coordination among external partners.
To avoid the multiplication of developmental plans, it was recommended that other plans such as NSSDs could be formulated as PRSPs that integrate economic, social and environmental aspects of sustainable development. The PRSPs, in general, cover four key areas, including:
– Macroeconomic and structural policies to support sustainable growth in which the poor participate,
– How to improve governance, including public sector financial management,
– Appropriate sectoral policies and programmes,
– Realistic costing and appropriate levels of funding for the major programmes.
After this synthesised presentation of what Policy Analysis is used for, we finally come to the point; the focus of this section. I will be posting research papers analysing specific policies relating to the key areas of the PRSPs and recommending when necessary improvements that ought to be incorporated in future policies.

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