FORECASTING EXPECTED POLICY OUTCOME

Forecasting

 provides policy-relevant information about consequences that are likely to

follow the adoption of preferred policies
 helps examine plausible, potential, and normatively valued futures;
estimate the consequences of existing and proposed policies
 a procedure for producing factual information about future states of
society on the basis of prior information about policy problems.

Principal Form of Forecasting:

Projection

 a forecast that is based on the extrapolation of current and historical trends

into the future.
 put forth designative claims based on arguments from method and parallel
case, where assumptions about the validity of particular methods

Prediction

 A forecast based on explicit theoretical assumptions.

 These assumptions may take the form of theoretical laws, and theoretical
propositions
 It specifies the generative powers and consequences, or the parallel
processes or relations believed to underlie a relationship.
 May be supplemented by arguments from authority and method
Conjecture

 a forecast based on informed or expert judgments about future states of

society.
 May take the form of intuitive arguments, where assumptions about the
insight, creative intellectual power, or tacit knowledge of stakeholders
 Judgments may also be expressed in the form of motivational arguments
where present or future goals, values, and intentions are used to establish
the plausibility of claims,
 May be supplemented by arguments from authority, method, and cause.

Aims of Forecasting:

 Forecasts provide information about future changes in policies and their

consequences.
 Permits greater control through understanding past policies and their
consequences, an aim that implies that the future is determined by the
past.
 Enable us to shape the future in an active manner, irrespective of what has
occurred in the past.

Limitations of Forecasting:

Forecast accuracy
 The accuracy of relatively simple forecasts based on the extrapolation of
trends in a single variable, as well as relatively complex forecasts based on
models incorporating hundreds of variables, has been limited.
Comparative yield
 The accuracy of predictions based on complex theoretical models of the
economy and of the energy resource system has been no greater than the
accuracy of projections and conjectures made, respectively, on the basis
of simple extrapolative models and informed judgment.

Context
 The assumptions of models and their results are sensitive to three kinds of
contexts: institutional, temporal, and historical.

Types of Futures:

Plausible futures
 Are future states that, on the basis of assumptions about causation in nature
and society, are believed to be likely if policy makers do not intervene to
redirect the course of events.

Normative futures
 Are potential and plausible futures that are consistent with an analyst's
conception of future needs, values, and opportunities.

Potential futures
 Sometimes called alternative future
 Are future societal states that may occur, as distinguished from societal
states that eventually do occur.
Alternatives imply goals and objectives, just as goals and objectives imply policy
alternatives. Sources of policy alternatives, goals, and objectives include the
following:

Authority

 In searching for alternatives to resolve a problem, analysts may appeal to

experts.

Insight
 The analyst may appeal to the intuition, judgment, or tacit knowledge
of persons believed to be particularly insightful about a problem.

Method

 The search for alternatives may benefit from innovative methods of

analysis.

Scientific theories

 Explanations produced by the natural and social sciences are also an

important source of policy alternatives

Motivation

 The beliefs, values, and needs of stakeholders may serve as a source of

policy alternatives.
Parallel case
 Experiences with policy problems in other countries, states, and cities are
an important source of policy alternatives

Analogy

 Similarities between different kinds of problems are a source of policy

alternatives.

Ethical systems
 Theories of social justice put forward by philosophers and other social
thinkers serve as a source of policy alternatives in a variety of issue areas.

Approaches to Forecasting:

By selecting an approach, we mean three things:

 Decide what to forecast, that is, determine what the object of the forecast
is to be
 Decide how to make the forecast, that is, select one or more bases for the
forecast;
 Choose techniques that are most appropriate for the object and base
selected.

Consequences of existing policies

 Forecasts may be used to estimate changes that are likely to occur if no

new government actions are taken.
 The status quo, that is, doing nothing, is an existing policy.
Consequences of new policies

 Forecasts may be used to estimate changes in society that are likely to

occur if new policies are adopted.

Contents of new policies

 Forecasts may be used to estimate changes in the content of new public

policies.

Behavior of policy stakeholder’s.

 Forecasts may be used to estimate the probable support to newly

proposed policies.

Three Major Bases of Forecasts:

Trend extrapolation
 The extension into the future of trends observed in the past.
 Trend extrapolation assumes that what has occurred in the past will also
occur in the future, provided that no new policies or unforeseen events
intervene to change the course of events.

Theoretical assumptions
 Are systematically structured and empirically testable
 sets of laws or propositions that make predictions about the occurrence of
one event on the basis of another
 Theoretical assumptions are causal in form, and their specific role is to
explain and predict.
Informed judgments
 Refer to knowledge based on experience and insight, rather than inductive
or deductive reasoning.
 Usually expressed by experts or knowledgeable and are used in cases
where theory and/or empirical data are unavailable or inadequate.

RECOMMENDING PREFERRED POLICIES

Recommendation in Policy Analysis:

 Involves the transformation of information about expected policy

outcomes into information about preferred policies.
 Requires prior information about the future consequences of acting on
different alternatives.
 Requires that we also determine which policies are most valuable and why.
 For this reason, the policy analytic procedure of recommendation is
normative. It is closely related to ethical and moral questions.

Advocative Claims are:

Actionable

 Advocative claims focus on actions that may be taken to resolve a policy

problem.
Prospective

 Advocative claims are prospective, because they occur prior to the time
that actions are taken

Value laden

 Advocative claims depend as much on "facts" as they do on "values."

 To claim that a particular policy alternative should be adopted requires not
only that the action being recommended will have the predicted
consequences; it also requires that the predicted consequences are
valued by individuals, groups, or society as a whole.

Ethically complex

Intrinsic values - are those that are valued as ends in themselves

Extrinsic values - are those that are valued because they will produce some other
value.

Single decision maker

 The choice must be confined to a single person.
 If choices are affected by or in turn affect more than one person, there are
likely to be conflicting sets of factual and value premises.

Certainty
 The outcomes of choice must be known with certainty. Yet the outcomes
of choice are seldom known with certainty.
Immediacy of consequences

 Results of a course of action must occur immediately.

Rational Bases

Technical Rationality

 is a characteristic of reasoned choices that involve the comparison of

alternatives according to their capacity to promote effective solutions for
public problems.

Economic Rationality

 is a characteristic of reasoned choices that involve the comparison of

alternatives according to their capacity to promote efficient solutions for
public problems.

Legal Rationality

 is a characteristic of reasoned choices that involve the comparison of

alternatives according to their legal conformity to established rules and
precedents.
Social Rationality

 is a characteristic of reasoned choices that involve the comparison of

alternatives according to their capacity to maintain or improve valued
social institutions, that is, promote institutionalization.

Substantive Rationality

 is a characteristic of reasoned choices that involve the comparison of

multiple forms of rationality-technical, economic, legal, social-in order to
make the most appropriate choice under given circumstances.

Decision Criteria

 we mean explicitly stated values that underlie recommendations for

action.

Types of Decision Criteria:

Effectiveness

 refers to whether a given alternative results in the achievement of a valued

outcome (effect) of action, that is, an objective.

Efficiency

 refers to the amount of effort required to produce a given level of

effectiveness.
Adequacy

 refers to the extent to which any given level of effectiveness satisfies the
needs, values, or opportunities that gave rise to a problem.

Maximize individual welfare

 The analyst can attempt to maximize the welfare
 of all individuals simultaneously.
 This requires that a single transitive preference ranking be constructed on
the basis of all individual values.

Protect minimum welfare

 The analyst (ln attempt to increase the welfare of some persons while still
protecting the positions of persons who are worst off.
 This approach is based on the Pareto criterion,

Maximize net welfare

 The analyst attempts to increase net welfare (e.g., total benefits less total
costs) but assumes that the resulting gains could be used to compensate
losers.
 This approach is based on the Kaldor-Hicks criterion:

Maximize redistributive welfare

 The analyst attempts to maximize re-distributional benefits to selected
groups in society, for example, the racially oppressed, poor, or sick.
 One redistributive Criterion has been put forth by hilosopher John Rawls:
one social state is better than another if it results in a gain in welfare for
members of society who are worst off.
Responsiveness

 refers to the extent that a policy satisfies the needs, preferences, or values
of particular groups.

Appropriateness

 refers to the value or worth of a program's objectives and to the tenability

of assumptions underlying these objectives.

Equity and efficiency

 Is equity as re-distributional welfare (Rawls) an appropriate criterion when

programs designed to redistribute income to the poor

Equity and entitlement

 Is equity as minimum welfare an appropriate criterion when those who

receive additional benefits have not earned them through socially
legitimate means

Efficiency, equity, and humanistic values

 Are efficiency and equity appropriate criteria when the means required to
achieve an efficient or just society conflict with democratic processes
Equity and reasoned ethical debate

 Is equity as redistributive welfare (Rawls) an appropriate criterion when it

subverts opportunities for reasoned ethical debate

Approaches to Recommendation

Nature of public policy processes

 Policy making in the public sector involves bargaining, compromise, and
conflict among citizens' groups, legislative bodies, executive departments,
regulatory commissions, businesses, and many other stakeholders.
 There is no single producer or consumer of goods and services whose profits
or welfare is to be maximized.

Collective nature of public policy goals

 Policy goals in the public sector are collective ones that are supposed to
reflect society's preferences or some broad ••public interest."
 The specification of these collective goals, as we have seen, often involves
multiple conflicting criteria, from effectiveness, efficiency, and adequacy
to equity, responsiveness, and appropriateness

Nature of public goods

 Public and private goods may be divided into three groups: specific goods,
collective goods, and quasi-collective goods.
 Specific goods are exclusive, because the person who owns them has the
legal right exclude others from their benefits.