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Introduction to Public Policy Analysis

The word policy is very popular term in practical life. Oxford Advanced learner’s
Dictionary has defined the term policy – “Policy means the plan of action, statement of
aims and ideas, especially made by a government, business company and political
parties, etc.”
According to E. N. Gladen – in short “Policy is the activity of those who decide what is
to be done.”
According to Dimok – “Policy means the consciously acknowledge rules of conduct that
guide administrative decision.”
Different Scholars have different views regarding the term policy. Although, language of
definitions is different, the essence is the same. Policy is a plan of action determined by
individuals, businesses, government and social institutions to achieve their objectives.
More precisely, a policy is a course of action before initiating any work.
Whether policy may be business policy, private policy, Public policy, should be obeyed
by all concern people. For example: business policy, those who are associated with the
business organization should follow the business policy. In the same way, government
organs and all people of the country should obey the government policy.
Now we would try to explain 'public policy'. The word ‘pubic’ explain group or mass. For
example, public notice that implies notice for all or notice to be known by all.
In economic sense ‘public’ denotes government. The policy which is adopted by the
government is known as public policy or government policy. Public policy means the
choice made by the government to do or not to do certain work. Public policy should be
obeyed by the organs of government, political parties, institutions and the people as a
whole. Public policy is also a code of conduct or directive approved by the government.
UNO has rightly observed, “By public policy it means government policy.”
Robert Eyestone defines Public policy as “the relationship of a government unit to its
environment.” This definition is vague and complex. It is uncertain of its meaning, it
could encompass almost anything. Since the word ‘environment’ is left unexplained,
Eyestone’s definition of public policy can be considered as an example of an insufficient
James E. Anderson defines “public policy as a purposive course of action followed by an
actor or set of actors in dealing with a problem of matter of concern.” Andersen
definition has focused not on purposed or desired but on what is actually done in
reality. It separates decisions and policy. Decision making is the process of making
selection from among the competitive alternatives. Although there is intimate
relationship between the policy and decision making, while making decision, problem is
fully studied, alternatives are thought and the best alternative is chosen. On the other
hand different decisions are taken under approved policy.
Thomas R. Dye has given a simple and straight definition of public policy. According to
him “public policy is whatever government chooses to do or not to do.” In his view
there is the allocation of values from the function of the government.
There is no single acceptable definition. Trying to define public policy in one sentence or
one paragraph is merely the outcome of mental paralysis.
Characteristics of Public Policy

James E. Anderson has explained some of the characteristics of the public policy are
as follows:
1. Purpose or goal oriented action

Public policies in modern public system reflect the behavior made on the basis of
definite objective. It implies that, public policy does not reflect the behavior that
occurs suddenly or incidentally. For example public policy concentrate mainly on the
purpose of alleviating poverty, but does not reflect the behavior made for relief of
the people suffered from earthquake all of the sudden. It is designed to solve
particular problem.
2. Course of action

Policy consists of course of actions taken by governmental authorities. A single

decision made by the authority on his discretion cannot be a public policy. For
example ,a policy includes not only the decision to enact the law in some topic but
also subsequent decision relating to its implementation and enforcement.
3. Actual doing

Policy is what government actually do in regulating trade, controlling inflation or

promoting public housing. Only intention of government may not be converted into
reality. For example – Although there is a law of minimum wage, but no change
occurs in economic behavior, it cannot be a policy if it is not being implemented.
4. Positive or negative form

Public policy may be either positive or negative in form. Positive form of policy
involves the action taken by the government to influence certain action. For
example: A policy that, there should be fewer female members in the parliament
house. On the other hand, in its negative form, it involves the decision by public
authority not to take action in some matter in which a governmental order is
5. Law based and authoritative

Since society is based on laws, public policies should positively be based on the
laws. Society must accept a legitimate that taxes must be paid. Those violating
public policy should face penalty and punishment. For example only government can
punish those who drive a car without license.
6. Applied social science

Public policy is an applied social science discipline. Which uses multiple methods of
inquire and argument to produce and transform policy relevant information that may
be utilized in political setting to resolve policy problems. UNO has also dubbed
policy making act as policy science.
Stages of of Public Policy
The stages of public policy can be put as follows:
1. Identifying problem

For an analytic approach the first step in public policy is to identify whether and why
there is a problem at all. Problems as such are policy demands. Policy demands are
those demands or claims made by the community or/and the individuals with the
government authorities for the solution of any problems. Such demands may range
from a general insistence that government ought to do, to a proposal for specific
action on the matter.
Example.1: The demand for controlling pollution produced by vehicles in the
Kathmandu Valley. Community has put pressure on the government to ban polluted
vehicles. Thus, the government enforced the law to ban polluted vehicles in the
valley for example "Bikram Tempo" replaced by "Safa Tempo".
Example 2: Less revenue generation from VAT than expected. Policy variables
identified after in-depth study of the causes of the problems will have the following
policy demands:

• Increase in rate
• Increase in coverage,
• Increase in thresholds,
• Increase in tax administration

Example 3: Relatively lower enrollment of the girls in the school compared to the
boys. Policy variables identified are;

• Increase in the awareness level of the parents, giving incentives to the

parents sending their daughters to school,
• Scholarships and other facilities for the girls,
• Increase in the income level of the parents,
• Easy access to the drinking water facilities to the rural households, so that
girls are relieved from household works particularly fetching drinking water
• Construction of separate toilets for the girls and hiring more female teachers
in the schools,
• Opening schools near to the settlement

Similarly, due to increasing pressure from donor agencies to under take economic
reform program to liberalize the economy, has forced the government to realize the
need of economic reform program in Nepal. For example, Melemchi Water Supply
Project, as a result of Asian Development Banks pre-requisites for investment a
portions of assets and liabilities of Nepal Water Supply Corporation (Kathmandu
valley) were transferred to a quasi-private company named Kathmandu Upatyake
Khanepani Limited (KUKL) .The government had formed the KUKL to run the water
distribution system more efficiently. This is a historical step taken in accordance
with the government policy of public-private partnership and a practical attempt at
decentralization process.
2. Forecasting and Evaluating the Alternatives
As problems are identified and additional information become available, refinement
of alternative course of action will continue throughout the analysis. For this, policy
analyst will turn to a relevant model for forecasting consequences.

In the case of the pollution control problem, the models needed would be far more
complex. Here, the analyst would have to build a model of how the quality of water
in the Bagmati River responds to the various types of pollution and weather
conditions. Only then can he forecast the consequences, in terms of quality of water
and the alternative measures and degrees of pollution control. The analyst must
also try to predict the effect on the individuals and industrialists affected by various
control measures on water quality. It is necessary here to predict all the effects of
the proposed policies, not just the economic effects desired by the decision-maker.

Policy decisions are made by public officials that authorize or give direction and
content to public policy action. For example, in the Bagmati River’s case, the analyst
must find some way to evaluate the possible degrees of improvement of water
quality. Improvements in water quality will be achieved only at a very high cost,
while the benefits of pollution control may be enjoyed by one section of the
community, and the state may have to bear substantial costs in administering the
pollution control. These costs therefore, must be evaluated. However, the effects of
pollution control will extend over many years and the relative benefits and costs
must be discounted.

3.Policy Implementation /Policy action

To use the matters mentioned in policy statement in actual practice is called

implementation. The matters like tax collection, high way construction, distribution
of drinking water, electricity are the policy output. They are the consequences of
policy implementation. The implementation is usually done through administrative
bodies. For successful implementation of any policy the key decision makers must
view the policy as legitimate. After implementing the public policy , its impact is to
be assessed

3. Monitoring/ policy outcomes

Monitoring is a continuous function that uses the systematic collection of data on

specified indicators to provide management and the main stakeholders of an
ongoing development interventions with indication of the extent of progress and
achievements of objectives and progress in the use of allocated funds.

Monitoring can be done at the project, programmes or policy levels. For example, in
looking at infant health one could monitor the project level by monitoring the
awareness of good parental care in the targeted area. At programme level one could
monitor to ensure that information on parental care being targeted to pregnant
women in the whole region in the country. At the policy monitoring level, the
concern could be to monitor overall morbidity and mortality rate for that same

The effect on people’s lives due to the implementation of government policy is policy
outcome. It is also called policy evaluation. Evaluation is a systematic and objective
assessment of an ongoing or completed projects, programmes, or policy, including
its design, implementations and results. Evaluation, like monitoring may be
conducted at project, programme or policy level. To take an example of privatizing
water systems, a project evaluation might involve the assessment of the
improvement in water fee collection rates in targeted areas. At the program level
one might consider assessing the financial management of the government’s
systems, while at the policy level one might evaluate different model approaches to
privatizing public water supplies.
Public Choice Theory: Policy as collective decision making by self-
interested individuals

Public choice is the economic study of nonmarket decision making, especially the
application of economic analyses to public policymaking. Traditionally, economics
studied behavior in the marketplace and assumed that individuals pursued their
private interests; political science studied behavior in the public arena and
assumed that individuals pursued their own notion of the public interest. Thus,
separate versions of human motivation developed in economics and political
science: the ideal of homo economicus assumed a self interested actor seeking
to maximize personal benefits; that of homo politicus assumed a public-spirited
actor seeking to maximize societal welfare.

But public choice theory challenges the notion that individuals act differently in
politics than they do in the marketplace. This theory assumes that all political
actors-voters, taxpayers, candidates, legislators, bureaucrats, interest groups,
parties, bureaucracies, and governments – seek to maximize their personal
benefits in politics as well as in the market place. James Buchanan, the Nobel
Prize-winning economist and leading scholar in modern public choice theory,
argues that individuals come together in politics for their own mutual benefit,
just as they come together in the marketplace; and by agreement (contract)
among themselves they can enhance their own well being, in the same way as
by trading in the marketplace. In short, people pursue their self-interest in both
politics and the marketplace, but even with selfish motives they can mutually
benefit through collective decision making.

Government itself arises from a social contract among individuals who agree for
their mutual benefit to obey laws and support the government in exchange for
protection of their own lives, liberties, and property. Thus, public choice theories
claim to be intellectual heirs to the English political philosopher John Locke, as
well as to Thomas Jefferson, who incorporated this social contract notion into the
American Declaration of Independence. Enlightened self-interest leads
individuals to a constitutional contract establishing a government to protect life,
liberty and property.

Public choice theory recognizes that government must perform certain functions
that the marketplace is unable to handle; that is, it must remedy certain “market
failures.” First, government must provide public goods-goods and services that
must be supplied to everyone if they are supplied to anyone. The market cannot
provide public goods because their cost exceeds their value to any single buyer,
and a single buyer would not be in a position to keep non-buyers from using it.
National defense is the most common example: protection from foreign invasion
is too expensive for a single person to buy, and once it is provided no one can be
excluded from its benefits. So people must act collectively through government
to provide for the common defense.

Second, externalities are another recognized market failure and justification for
government intervention. An externality occurs when an activity of one
individual, firm or local government imposes uncompensated cost on others. The
most common examples are air and water pollution: the discharge of air and
water pollutants imposes costs on others. Governments respond by either
regulating the activities that produce externalities or imposing penalties (fines)
on these activities to compensate for their costs to society.

Public choice theory helps to explain why political parties and candidates
generally fail to offer clear policy alternatives in election campaigns. Parties and
candidates are not interested in advancing principles but rather in winning
elections. They formulate their policy positions to win elections; they do not win
elections to formulate policy. Thus each party and candidate seeks policy
positions that will attract the greatest number of voters. Given a uni-modal
distribution of opinion on any policy question, parties and candidates will move
toward the center to maximize votes. Only “ideologues” (irrational, ideologically
motivated people) ignore the vote maximization centrist strategy.

Public choice theory also contributes to our understanding of interest groups and
their effects on public policy. To attract members and contributions, interest
groups must dramatize and publicize their cause. Interest group leaders must
compete for members and money by exaggerating the dangers to society of
ignoring their demands. Even when governments meet their original demands,
interest groups must generate new demands with new warnings of danger if they
are to remain in business. In short, interest groups, like other political actors,
pursue their self-interest in the political marketplace.