Public Policy Analysis

ByKhemraj Subedi

LecturerM.Phil Economics, M.A. Economics,M.Ed, Economics20th January 2016

Unit 1:Introduction To Public Policy Analysis

Public Policy; Analysis(Webster’s dictionary) Policy: 1. A definite course or method of action selected from among

alternatives and in the light of given conditions to guide and usually determine present and future decisions.

2. A projected program consisting of desired objectives and the means to achieve them.

Analysis: 1. Separation or breaking up of a whole into its fundamental elements

or components or component parts.2. A detailed examination of anything complex made in order to

understand its nature or to determine its nature or to determine its essential features, through a study.

Public policy analysis

Policy Analysis is the process of assessing, and deciding among alternatives based on their usefulness in satisfying one or more goals or values.

Policy Analysis is client-oriented advice relevant to public decisions and informed by social values.

The job of analysts consists in large part of producing evidence and arguments to be used in the course of public debate. 

Meaning of Public Policy

Public policy is the means by which a government maintains order or addresses the needs of its citizens through actions defined by its constitution.

Public policy refers to the policies taken by the public authority or government into different sectors like industry, commerce, health, education, agriculture etc.

The main objective of public policy is to serve and develop the people by providing conducive environment, which maintains the norms and values of the society for quality life and better human behavior.

DefinitionsJames Anderson "Policy is the purposive

course of action followed by an actor or set of actors or in dealing with a problem or matter of concern."

• Forhock,"Public policy is a pattern attempted either to save or manage political disputes, or provide rational incentives to secure agreed upon goals with policy issues capable of ranging far and wide over both material goods and ethical issues."

To sum up, public policy is a

proposed and purposive course of

action that is directed at achieving

certain goals or at solving the

specified problems faced by persons,

group, society or a nation as a whole.

The authorities involved in public policy formulation

• Legislatures,• Executives,• Administrators,• Councilors,• Judges• Paramount Chiefs,• Elders,• Monarchs, 

Characteristics of Public Policy The public policy includes the following

characteristics:• Public policy is goal oriented.• Public policy is a course of action.• What to do?• Public policy may have positive or negative

form.• Public policy is law based and authoritative.• Public policy is an applied social science.

Stages of Public Policy • Policy demand• Policy decisions.• Policy statements.• Policy Implementation.• Policy outputs.• Policy outcomes. 

Theory of Public Choice

• Public choice theory is a branch of

economics that developed from the

study of taxation and public spending.

Public choice is an application of self interest and utility maximization to explain political behaviour.

Public choice theory seeks to understand and predict the behaviour of politicians and bureaucrats in the polity by utilizing analytical techniques developed from economics, based on the postulate of rational choice.

In public choice, the actors assumed

to seek their own self interest as in

the market place are; individuals and

voters, interest groups, bureaucrats,

& politicians/legislatures

Historical Background

Public choice theory emerged in the

sixties and received widespread public

attention in 1986, when James

Buchanan, one of its two leading

architects (the other was his colleague

Gordon Tullock), was awarded the

Nobel Prize in economics.

• In addition to providing insight into how public decision making occurs today, public choice analyzes the rules that guide the collective decision-making process itself. These are the constitutional rules that are made before political activity gets underway. The work done by James Buchanan and Gordon Tullock on The Calculus of Consent, is one of the classics of public choice.

Public choice takes the same principles that economists use to analyze people's actions in the marketplace and applies them to people's actions in collective decision making. Economists who study behavior in the private marketplace assume that people are motivated mainly by self-interest.

It postulates that there are maily four players involved in public policy

They are: Politicians, General voters, Bureaucrats & Special interest group

Key terms of theory of pubic choice

Public goods vs. private goods.Externalities,Public goods and free riders,Implication for voluntary action, Constitutional choice,Economic man and bureaucracy, Voting rules and bureaucracy,Market vs. hierarchical organization.

Assumptions of Public Choice Theory

Ostrom & Ostrom (1971) noted that following four public choice assumptions about individuals:

Self-interest,Rationality,Benefit maximizing , & Uncertainty minimizing.

Use of Public Choice in Managerial Decision Making

Public policy is an important concern for the administrators, academicians and the public in large.

The importance of the study of public policy has assumed a great significance particularly with the increase in the scope and size of the public sectors.

use of public policy in managerial decision making are:

Scientific reasons. Professional reasons. Political reasons. Utility to general public.Utility to business decision making. Utility to statesman.Utility to administrative official.

Institutions, Processes and

Behaviours

Environmental Forces and conditions

Public Policies

AB

C

D

E F

Linkage A : The effect of environmental forces and conditions on political and governmental institutions, processes, and behaviours.

Linkage B: The effect of political and governmental institutions, processes and behaviours on public policy.

Linkage C: The effect of environmental forces and conditions on public policy.

Linkage D : The effect (feedback) of public policies on environmental forces and conditions.

Linkage E : The effect (feedback) of political and governmantal institutions, processes and behaviours on environmental forces and conditions.

Linkage F: The effect (feedback) of public policies on political and governmental institutions, processes, and behaviours.

Environmental Political System Public Policy

Wealth Governmental form Civil rights policies

Urbanization Constitutional type Income redistribution

Economic system Bureaucracy Educational policies

Educational levels Party system Welfare policies

Inequalities Power structure Health Policies

Class structure Pattern of participation Foreign policies.

Cultural patterns Interest group system Defense policies

Racial compositions Level of conflict Tax policies

Religious make-up Characteristics of elites Public spending policies

Thanks