Contemporary Policy Analysis
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1 SUB Hamburg A/ Contemporary Policy Analysis MICHAEL MINTROM University of Auckland New York Oxford OXFORD UNIVERSITY PRESS
2 BRIEF CONTENTS PREFACE XXI 1 Introduction 1 OVERVIEW OF POLICY ANALYSIS 13 2 What Policy Analysts Do 15 3 What Governments Do 27 4 Objectives of Government Policy Actions 43 5 Managing Policy Projects 63 6 Presenting Policy Advice 80 7 Doing Ethical Policy Analysis 95 ANALYTICAL STRATEGIES Introduction to the Analytical Strategies Analysis of Markets Analysis of Market Failure Analysis of Government Failure Comparative Institutional Analysis Cost-Benefit Analysis Gender Analysis Race Analysis Implementation Analysis 285 IMPROVING YOUR PRACTICE Developing as a Policy Analyst and Advisor 307 BIBLIOGRAPHY 315 INDEX 331
3 CONTENTS PREFACE XXI 1 Introduction l The Nature of Policy Analysis 2 The Rise of Policy Analysis 5 The Purpose and Organization of This Book 8 Conclusion 9 Exercises 10 Further Reading 11 OVERVIEW OF POLICY ANALYSIS 13 2 What Policy Analysts Do 15 The Social Function of Policy Analysis 16 Where Policy Analysts Are Employed 18 How Policy Analysts Contribute to Public Decision Making 20 Common Competencies and Attributes of Successful Policy Analysts 22 Why Being a Policy Analyst Is an Appealing Career Choice 23 Conclusion 24 Exercises 25 Invite a Guest to Class 25 Further Reading 25 3 What Governments Do 27 The Role of Government in Society 28 Achieving Cooperation 29 A Review of Government Policy Actions 30 Market Making 30 Taxes 32 Subsidies 32
4 x CONTENTS Regulation 34 Direct Service Supply 35 Funding and Contracting 36 Partnering and Facilitating 37 Information and Social Marketing 38 Frameworks and Strategies 39 Summary 40 Increasing Complexity 41 Looking Ahead 41 Exercises 42 Further Reading 42 Objectives of Government Policy Actions 43 Discussing Government Policy Action 45 Promoting Human Flourishing 47 Promoting Effective Institutions 48 Promoting Efficiency 50 Promoting Sustainability 52 Advancing Human Rights 53 Promoting Social Equity 54 Problem Definition and Agenda Setting 58 Working with Objectives, Goals, and Public Policies 59 Conclusion 61 Exercises 61 Further Reading 62 Managing Policy Projects 63 The Discipline of Project Management 64 Project Initiation 65 Project Planning 65 Project Execution and Control 66 Project Closure 66 Developing a Policy Project Proposal 66 A Project Summary 67 A List of Project Objectives 68 A List of Project Deliverables 68 A Project Task List 68 A Preliminary Time Budget 71 A Project Timeline 71 Biographical Statements 71 A Project Budget 72 A Risk Assessment 72 Transitioning to Project Execution and Control 72
5 Contents xi Constructing Progress Reports 73 Managing Your Time 74 Make "To Do" Lists 74 Prioritize Among Activities 75 Batch Routine Tasks 75 Think About Opportunity Costs 75 Think in Marginalist Terms 75 Take Care of Relations with Others 75 Manage Your Downtime 75 Working with Policy Literature 76 Conclusion 78 Exercises 79 The Class Project 78 Further Reading 79 6 Presenting Policy Advice 80 Clarifying Audience Needs 81 Structuring a Policy Report 82 Abstract or Executive Summary 83 Table of Contents 83 Introduction 83 Background 83 Analytical Strategy 84 Analysis and Findings 84 Discussion 84 Policy Recommendations 85 Conclusion 86 Other Items 87 Effective Presentation of Evidence 87 Reflecting on the Contribution 89 The Sign-Off 90 Developing Presentations and Oral Briefings 91 The Importance of Creativity 92 Conclusion 93 Exercises 94 Invite a Guest to Class 94 Further Reading 94 7 Doing Ethical Policy Analysis 95 Policy Analysis and Ethical Practice 96 Ethical Principles for Policy Analysts 100 Integrity 101 Competence 101
6 xii CONTENTS Responsibility 102 Respect 102 Concern 103 Doing Ethical Policy Analysis 104 Ethical Problem Definition 104 Ethical Construction of Alternatives 105 Ethical Selection of Criteria 105 Ethical Prediction of Outcomes 106 Ethical Analysis of Trade-Offs 106 Ethical Reporting Practices 107 Conclusion 107 Exercises 108 Invite a Guest to Class 108 Further Reading 108 ANALYTICAL STRATEGIES Introduction to the Analytical Strategies ill Policy Analysts in the Policy-Making Process 112 The Analytical Strategy Chapters 113 Chapter 9: Analysis of Markets 113 Chapter 10: Analysis of Market Failure 114 Chapter 11: Analysis of Government Failure 114 Chapter 12: Comparative Institutional Analysis 114 Chapter 13: Cost-Benefit Analysis 114 Chapter 14: Gender Analysis 114 Chapter 15: Race Analysis 114 Chapter 16: Implementation Analysis 115 Use of Applied Examples 115 The Analytical Strategies and General Steps in Policy Analysis 116 When to Apply Each Analytical Strategy 118 Conclusion Analysis of Markets 119 An Introduction to Market Analysis 121 Consumer Choice and the Demand Side of the Market 122 Firm Behavior and the Supply Side of the Market 131 Equilibrium in Markets 135 Comparative Static Equilibrium Analysis 136 Price Signaling and Interconnected Markets 137 Assumptions of the Market Model Revisited 138
7 Contents xiii Using Market Analysis as an Analytical Framework 140 Steps in Market Analysis 141 Step 1. Identify the phenomenon of interest. 142 Step 2. Consider the behavior of consumers and producers. 142 Step 3. Think in terms of comparative statics equilibrium analysis. 142 Step 4. Collect and analyze the relevant information. 142 Step 5. Draw implications for government action. 142 An Applied Example 143 Step 1. Identify the phenomenon of interest. 144 Step 2. Consider the behavior of consumers and producers. 144 Step 3. Think in terms of comparative statics equilibrium analysis. 144 Step 4. Collect and analyze the relevant information. 145 Step 5. Draw implications for government action. 145 Advice for Analytical Practice 145 Analysis of Markets and Other Analytical Strategies 146 Chapter Content Review: A Self-Test 146 Exercises 147 The Policy Research Seminar 147 Further Reading Analysis of Market Failure 149 An Overview of Market Failure 151 Information Asymmetries 151 Rectifying Information Asymmetries 157 Positive Externalities 160 Rectifying Positive Externalities 162 Negative Externalities 163 Rectifying Negative Externalities 165 Public Goods: Common Pool Resources 167 Rectifying Problems with Common Pool Resources 169 Pure Public Goods: The Need for Collective Provision 171 Arranging Collective Provision 173 Natural Monopolies and How They Can Be Managed 174 Social Equity Concerns and How They Can Be Addressed 176 Using Market Failure as an Analytical Framework 178 Steps in the Analysis of Market Failure 178 Step 1. Specify the good or service of interest. 179 Step 2. Identify the consumers and producers and the location of their transactions. 179 Step 3. Using the tools of market analysis, construct a simple model of how an efficient market would allocate this good or service. 179
8 xiv CONTENTS Step 4. State the market failure that you believe is present in this context. 179 Step 5. Analyze the actions of consumers and producers and how those actions contribute to market failure. 179 Step 6. Estimate the financial implications of the market failure, and note any other salient impacts. 180 Step 7. Identify efforts made by consumers, producers, and any other nongovernmental actors to address the market failure. 180 Step 8. Suggest how government use ofpolicy instruments could potentially address the market failure. 180 An Applied Example 180 Step 1. Specify the good or service of interest. 182 Step 2. Identify the consumers and producers and the location of their transactions. 182 Step 3. Using the tools of market analysis, construct a simple model of how an efficient market would allocate this good or service. 182 Step 4. State the market failure that you believe is present in this context. 182 Step 5. Analyze the actions of consumers and producers and how those actions contribute to market failure. 182 Step 6. Estimate the financial implications of the market failure, and note any other salient impacts. 184 Step 7. Identify efforts made by consumers, producers, and any other non-governmental actors to address the market failure. 185 Step 8. Suggest how government use of policy instruments could potentially address the market failure. 185 Advice for Analytical Practice 185 Market Failure and Other Analytical Strategies 186 Exercises 186 The Policy Research Seminar 187 Further Reading Analysis of Government Failure 189 An Overview of Government Failure and Its Analysis 191 Government and Coordination Problems 192 Political Control 193 Provider Capture 194 Perverse Incentives 194 Goal Displacement 195 Institutional Inertia 196
9 Contents xv Using Government Failure as an Analytical Framework 197 Steps in the Analysis of Government Failure 198 Step 1. Define the area of policy interest. 198 Step 2. Determine the objectives of government action. 198 Step 3. Note the nature of information and coordination problems that can arise through reliance on decentralized, private decision making. 199 Step 4. Contrast the current or favored government actions with possible alternatives. 199 Step 5. Identify opportunities for undue political interference in program management. 199 Step 6. Identify opportunities for provider capture. 200 Step 7. Identify perverse incentives and unintended outcomes. 200 Step 8. Propose changes in policy design to reduce observed government failure. 200 Step 9. Consider ways that reliance on government action could be reduced over time. 201 An Applied Example 201 Step 1. Define the area of policy interest. 202 Step 2. Determine the objectives of government action. 203 Step 3. Note the nature of information and coordination problems that can arise through reliance on decentralized, private decision making. 203 Step 4. Contrast the current or favored government actions with possible alternatives. 203 Step 5. Identify opportunities for undue political interference in program management. 204 Step 6. Identify opportunities for provider capture. 204 Step 7. Identify perverse incentives and unintended outcomes. 204 Step 8. Propose changes in policy design to reduce observed government failure. 205 Step 9. Consider ways that reliance on government action could be reduced over time. 205 Advice for Analytical Practice 206 Analysis of Government Failure and Other Analytical Strategies 206 Exercises 207 The Policy Research Seminar 207 Further Reading Comparative Institutional Analysis 209 An Overview of Comparative Institutional Analysis 211 Using Comparative Institutional Analysis as an Analytical Framework 213
10 xvi CONTENTS Steps in Comparative Institutional Analysis 215 Step 1. Select and refine the analytical questions. 215 Step 2. Develop a research design, and select cases. 215 Step 3. Collect and analyze the relevant information. 215 Step 4. Isolate the relationships between institutional choice and observed outcomes. 216 Step 5. Present your findings, and make recommendations. 216 An Applied Example 217 Step 1. Select and refine the analytical questions. 217 Step 2. Develop a research design, and select cases. 218 Step 3. Collect and analyze the relevant information. 218 Step 4. Isolate the relationships between institutional choice and observed outcomes. 219 Step 5. Present your findings, and make recommendations. 219 Advice for Analytical Practice 220 Comparative Institutional Analysis and Other Analytical Strategies 220 Exercises 221 Invite a Guest to Class 222 The Class Project 222 The Policy Research Seminar 223 Further Reading Cost-Benefit Analysis 225 An Overview of Cost-Benefit Analysis 226 Using Cost-Benefit Analysis as an Analytical Framework 227 Steps in Cost-Benefit Analysis 228 Step 1. Define the scope of the study. 229 Step 2. Identify all negative and positive effects of the policy. 229 Step 3. Estimate the monetary costs and benefits of the policy. 230 Step 4. Take account of opportunity costs. 232 Step 5. Calculate net present value. 232 Step 6. Reflect on the value of human life and quality-of-life issues. 233 Step 7. Report study assumptions and limitations. 234 Step 8. Present results using several scenarios. 235 An Applied Example 235 Step 1. Define the scope of the study. 236 Step 2. Identify all negative and positive effects of the policy. 237 Step 3. Estimate the monetary costs and benefits of the policy. 238 Step 4. Take account of opportunity costs. 239 Step 5. Calculate net present value. 239
11 Contents xvii Step 6. Reflect on the value of human life and quality-of-life issues. 240 Step 7. Report study assumptions and limitations. 240 Step 8. Present results using several scenarios. 240 Advice for Analytical Practice 240 Cost-Benefit Analysis and Other Analytical Strategies 241 Exercises 242 The Class Project 242 The Policy Research Seminar 244 Further Reading Gender Analysis 246 Gender and Race Analysis 247 Policy Motives 248 Policy Actions 249 An Overview of Gender Analysis 250 Analysis of Aggregate Statistics 251 Process Tracing 252 Tests for Discriminatory Practices 254 Using Gender Analysis as an Analytical Framework 256 Gender Analysis and Problem Definition 257 Gender Analysis and Construction of Alternatives 257 Gender Analysis and Selection of Criteria 257 Gender Analysis and Prediction of Outcomes 258 Reporting Gender Analysis 258 Steps in Gender Analysis 258 Step 1. Select a specific context in which women appear significantly disadvantaged relative to men. 259 Step 2. Assemble evidence allowing you to illustrate differences in men's and women's experiences in similar contexts. 259 Step 3. Develop a process-tracing method to show how specific institutional arrangements, social practices, or decision making are discriminatory. 259 Step 4. Highlight discriminatory policies or practices, and show how they disadvantage women compared with men. 260 Step 5. Propose policy actions to rectify the discrimination and disadvantage. 260 Step 6. Address the view that gains for women spell losses for men. 260 An Applied Example 261 Step 1. Select a specific context in which women appear significantly disadvantaged relative to men. 261
12 xviii CONTENTS Step 2. Assemble evidence allowing you to illustrate differences in men's and women's experiences in similar contexts. 262 Step 3. Develop a process-tracing method to show how specific institutional arrangements, social practices, or decision making are discriminatory. 262 Step 4. Highlight discriminatory policies or practices, and show how they disadvantage women compared with men. 262 Step 5. Propose policy actions to rectify the discrimination and disadvantage. 263 Step 6. Address the view that gainsfor women spell lossesfor men. Advice for Analytical Practice 263 Gender Analysis and Other Analytical Strategies 264 Exercises 265 The Policy Research Seminar 265 Further Reading Race Analysis 267 An Overview of Race Analysis 268 Testing for Statistical Discrimination versus Racial Prejudice 269 Confronting Misattribution Problems 271 Tracing Complex Processes 273 Using Race Analysis as an Analytical Strategy 274 Race Analysis and Problem Definition 275 Race Analysis and Construction of Alternatives 275 Race Analysis and Selection of Criteria 275 Race Analysis and Prediction of Outcomes 275 Reporting Race Analysis 275 Steps in Race Analysis 276 Step 1. Select a specific context in which significant racial disparities are known or expected to exist. 276 Step 2. Assemble evidence allowing you to confirm the existence of racial disparities. 276 Step 3. Develop a process-tracing method to show how specific institutional arrangements, social practices, or decision making are discriminatory. 276 Step 4. Highlight discriminatory policies or practices, and show how they disadvantage specific racial groups. 277 Step 5. Propose policy actions to rectify the discrimination and disadvantage. 277 Step 6. Scrutinize the proposed policy actions to avoid unintended negative effects. 277 Step 7. Estimate the gains for all groups that would result from effective policy change. 277
13 Contents xix An Applied Example 278 Step 1. Select a specific context in which significant racial disparities are known or expected to exist. 279 Step 2. Assemble evidence allowing you to confirm the existence of racial disparities. 279 Step 3. Develop a process-tracing method to show how specific institutional arrangements, social practices, or decision making are discriminatory. 280 Step 4. Highlight discriminatory policies or practices, and show how they disadvantage specific racial groups. 280 Step 5. Propose policy actions to rectify the discrimination and disadvantage. 280 Step 6. Scrutinize the proposed policy actions to avoid unintended negative effects. 280 Step 7. Estimate the gains for all groups that would result from effective policy change. 281 Advice for Analytical Practice 281 Race Analysis and Other Analytical Strategies 281 Exercises 283 Further Reading Implementation Analysis 285 An Overview of Implementation Analysis 286 Envisioning Policy Success 287 Identifying Tasks and Task Dependencies 288 Identifying Threats to Successful Implementation 289 Closing Knowing-Doing Gaps 290 Planning for Evaluation 291 Using Implementation Analysis as an Analytical Framework 292 Steps in Implementation Analysis 293 Step 1. Identify the overall purpose of the new policy, where it will be implemented, and how success has been defined. 293 Step 2. Identify who will be responsible for policy implementation and the behavioral changes that implementation is expected to produce. 293 Step 3. Specify the institutional, organizational, and procedural changes required to support the new policy. 294 Step 4. Treating implementation as a project, note the key tasks required to establish the new policy context. 294 Step 5. Identify any significant threats to successful implementation and how they can be addressed. 294
14 xx CONTENTS Step 6. Consider how institutional inertia might hinder change and how it can be overcome. 294 Step 7. Ensure provisions have been made for evaluation of the new policy and associated programs. 294 An Applied Example 295 Step 1. Identify the overall purpose of the new policy, where it will be implemented, and how success has been defined. 295 Step 2. Identify who will be responsible for policy implementation and the behavioral changes that implementation is expected to produce. 296 Step 3. Specify the institutional, organizational, and procedural changes required to support the new policy. 296 Step 4. Treating implementation as a project, note the key tasks required to establish the new policy context. 297 Step 5. Identify any significant threats to successful implementation and how they can be addressed. 297 Step 6. Consider how institutional inertia might hinder change and how it can be overcome. 298 Step 7. Ensure provisions have been made for evaluation of the new policy and associated programs. 298 Advice for Analytical Practice 299 Implementation Analysis and Other Analytical Strategies 299 Exercises 300 Invite a Guest to Class 301 The Class Project 301 The Policy Research Seminar 303 Further Reading 303 IMPROVING YOUR PRACTICE Developing as a Policy Analyst and Advisor 307 The Power of Positive Thinking 308 Developing Openness and Creativity 309 Skill Building through Deliberate Practice 311 Becoming a Change Leader 312 Further Reading 313 BIBLIOGRAPHY 315 INDEX 331
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