SCHOOL OF ECONOMICS

UNIVERSITY OF DAR ER SALAAM

Lecture Five
Policy Formulation Process Models:
An Overview

By

Semboja Haji Hatibu Haji

Unedited Training Notes

Presented at the EC-366 Contemporary Issues in Economic
Development

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 Date Monday, January 16, 2023

5.0. Introduction

Lecture note five focuses on Policy Formulation Process and Models. The lecture combines
issues related with public policy and policy research analysis. In public policy, policy analysis or
Policy Formulation Process Models is "determining which of various alternative policies will
most achieve a given set of goals in light of the relations between the policy strategies and the
policy objectives ("goals or targets"). However, policy analysis can be divided into two major
fields. Analysis of policy is analytical and descriptive—i.e., it attempts to explain policies and
their development. Analysis for policy is prescriptive—i.e., it is involved with formulating
policies and proposals (e.g., to improve social welfare). The area of interest and the purpose of
analysis determine what type of analysis is conducted. A combination of policy analysis together
with program evaluation would be defined as policy studies.

Policy Analysis is frequently deployed in the public sector, but is equally applicable to other
kinds of organizations. Policy analysis has its roots in system analysis.

Systems analysis is the study of sets of interacting entities including intelligence or nowadays
considered as computer systems analysis. This field is closely related to policy and operational
researches. It is also "an explicit formal inquiry carried out to help someone (referred to as the
decision maker) identify a better course of action and make a better decision than he might
otherwise have made." The terms analysis and synthesis come from Greek where they mean
respectively "to take apart" and "to put together". These terms are in scientific disciplines from
mathematics and logic to economy and psychology to denote similar investigative procedures.
Analysis is defined as the procedure by which we break down an intellectual or substantial whole
into parts or synthesis is defined as the: to basant combine separate elements or components in
order to form a coherent whole. Systems analysis researchers apply methodology to the analysis
of systems involved to form an overall picture.

5.1. Policy Analysis Approaches

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Although various approaches to policy analysis exist, three general approaches can be
distinguished: [1] the analycentric, {economic policy analysis} [2] the policy process, and [3] the
meta-policy approach.

5.1.1. The analycentric approach

The analycentric approach focuses on specific or individual problems {Y, X, Z, W} and its
solutions (P(O; S)); its scope is the micro-scale and its problem interpretation is usually of a
technical nature. The primary aim is to identify the most effective and efficient solution in
technical and economic terms (e.g. the most efficient allocation of resources for a given firm).

5.1.2. The policy process approach

The policy process approach puts its focal point onto social economic political processes and
involved stakeholders; its scope is the meso-scale and its problem interpretation is usually of a
social economic political nature. It aims at determining what processes and means (stages} are
used and tries to explain the role and influence of stakeholders within the policy process. By
changing the relative power and influence of certain groups (e.g., enhancing public participation,
collaboration and consultation), solutions to problems may be identified.

5.1.3. The meta-policy approach

The meta-policy approach is a system and context approach; i.e., its scope is the macro-scale and
its problem interpretation is usually of a structural nature. It aims at explaining the contextual
factors of the policy process; i.e., what are the political, economic and socio-cultural factors
influencing it as problems may result because of structural factors (e.g., a certain economic
system or political institution), solutions may entail changing the structure itself.

5.2. Policy Analysis Methodologies

Policy analysis is methodologically diverse using both qualitative methods and quantitative
methods, including case studies, survey research, statistical analysis and model building among
others. One common methodology is to define the problem and evaluation criteria; identify all
alternatives; evaluate them; and recommend the best policy agenda per favor.

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5.3. Policy Analysis Models

We will note that, many policy models exist to analyze the creation and application of public
policy. Analysts use these social economic and political models to identify important aspects of
policy, as well as explain and predict policy and its consequences.

Some generic public policy models are:

5.3.1. Institutional model

Public policy is determined by political institutions (Cabinet), which give policy legitimacy.
Government universally applies policy to all citizens of society and monopolizes the use of force
in applying policy.

5.3.2. Process model

Policy creation is a process following these steps:

 Identification of a problem and demand for government action.
 Formulation of policy proposals by various parties (e.g., congressional committees, think
tanks, interest groups).
 Selection and enactment of policy; this is known as Policy Legitimating.
 Implementation of the chosen policy.
 Evaluation of policy.

This model, however, has been criticized for being overly linear and simplistic. In reality, stages
of the policy process may overlap or never happen. Also, this model fails to take the multiple
actors attempting the process itself as well as each other, and the complexity this entails.

5.3.3. Rational model

The rational model of decision-making is a process for making logically sound decisions in
policy making in the public sector, although the model is also widely used in private
corporations. Herbert Simon, the father of rational models, describes rationality as “a style of
behavior that is appropriate to the achievement of given goals, within the limits imposed by
given conditions and constraints”. It is important to note the model makes a series of
assumptions in order for it to work, such as:

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 A. The model must be applied in a social economic system that is stable,
B. The government is a rational and unitary actor and that its actions are perceived as
rational choices,
C. The policy problem is unambiguous (Clear and known (Y, X, Z, W)),
D. There are no limitations of resources, time or cost.

5.4. The Nature of Public Policy Problems

But we know that, public sector problems in many developing nations;:

 Are fuzzy and ill-defined;
 Have political as well as purely technical aspects;
 Often lack a good cause-effect knowledge base;
 May be solved only by producing new problems;
 Often involve tradeoffs between cost and effectiveness;
 May be hard to measure adequacy of results;
 And may be hard to measure fairness of results
 
5.4.1. Classical Rational Problem Solving Model

In normative theory problems can be approached using a rational, comprehensive problem

solving model. The demands of this model are:

1) Define the problem

2) Determine important social values
3) Identify all alternatives
4) Assess all alternatives
5) Select optimal alternative
6) Implement optimal alternative
 
5.4.2. Limitations in the Public Sector
 
Theoretical Model Public Sector Limitations
1) Define the problem 1) Problems are interlined
2) Determine important social values 2) No agreement on social values
3) Identify all alternatives 3) Limited time, knowledge

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4) Assess all alternatives on all values 4) Limited resources, lack of predictability
5) Select optimal alternative 5) Pressure to select the first good solution
6) Implement optimal alternative 6) Short time horizon to produce results
 
With these limitations, there is a need for the development of a model of policy analysis that can
address public sector problems. But policy analysis differs from traditional research as well.
Basic (normative /traditional) research is concerned with broad, theoretical, complex questions.
It uses explicit scientific steps and invariant procedures. Policy analysis, on the other hand, is
practical, situational and flexible. It addresses local problems and focuses on making decisions. It
is more craft or art than science.

 
Basic Research Policy Analysis
Seeks "truth" Is practical
Explicit steps and procedures  Flexible, situational 
Addresses broad questions Addresses local problems 
Focus on complexity Focus on decision-making
Science Craft

5.4.3. Case Studies in Policy Analysis

Problems in the public sector are multi-faceted and difficult to pin down. As if that was not bad
enough, the knowledge domain of public policy is ill-structured. This means that there is no "one
best way" to solve all problems. Giving policy analysis only one methodology is like giving a
home owner only a hammer to solve all household problems.

A new approach is needed to learning in this area. This approach is offered by case studies. Case
studies link problems to a reality; they offer the opportunity for the application of policy analysis
techniques in a concrete context.
 
The way information is remembered and use is linked to the way it is learned. Case studies
provide clues to the types of techniques that are needed to approach a solution to the problem.
These cues help policy analysts learn multiple approaches to learning and to problem solving.
 
Use of case studies will help to:

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 1) Recognize situations where analysis is appropriate and productive;
2) become competent in the application of different approaches and methods;
3) Learn how to communicate the results of policy analysis.

 
5.4.4. Tips for Practical Policy Analysis

1) Quickly identify the central decision criterion of the problem

(What is the most important factor in buying a car? Taking a new job?)

2) Identify what types of public sector actions can be taken

(Taxing, spending, sanctions, incentives, moral suasion, education?)

3) Avoid the "one best way" approach

(Have many tools in the tool box, not just one)

4) Learn how to deal with uncertainty

(Admit it, estimate its possible effects)

5) Say it with numbers

(Charts, graphs, tables, maps, etc.)

6) Make the analysis simple and transparent

(Provide details in a technical appendix)

7) Check and re-check the facts

(Use multiple sources of facts, triangulation)

8) Learn to anticipate the objections of opponents

(Improves the ultimate product)

9) Give analysis, not decisions

(Distinguish between analysis and advocacy)

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10) Push the boundaries of the envelope
(Expand the problem definition; introduce novel solutions)

11) Policy analysis is never 100% complete, rational, and correct

(How much time, money, and personnel is available to do the job?)

5.5. The Policy Analysis Process

 
5.5.1. Alternative Policy Analysis Models

The following are sample of public policy analysis models;

1) Model 1

a. Policy formulation
b. Search for alternatives
c. Forecast the future
d. Model the impacts of the alternative
e. Evaluate, compare, and rank the alternatives

2) Model 2

a. Define the problem

b. Determine criteria
c. Generate alternatives
d. Choose course of action
e. Evaluate policy after implementation

3) Model 3
a. Determine the underlying problem
b. Determine the objectives
c. Generate alternatives
d. Predict consequences of each alternative
e. Determine criteria for measuring achievements
f. Choose course of action

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5.5.2. Six Step Policy Analysis

1) Verify, define and detail the problem

2) Establish evaluation criteria
3) Identify alternative policies
4) Assess alternative policies
5) Display and distinguish among alternatives
6) Implement, monitor, and evaluate the policy
 
1) Verify, Define and Detail the Problem

State the problem meaningfully:

Determine the magnitude and extent of the problem
Continually re-define the problem in light of what is possible
Eliminate irrelevant material
Question the accepted thinking about the problem
Question initial formulations of the problem
Say it with data
Locate similar policy analyses
Locate relevant sources of data
Eliminate ambiguity
Clarify objectives
Resolve conflicting goals
Focus on the central, critical factors
Is it important? Is it unusual? Can it be solved?
Identify who is concerned, and why?
What power do concerned parties have?
Make a quick estimate of resources required to deal with the problem
 

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2) Establish Evaluation Criteria

What are the important policy goals, and how will they be measured?
Identify criteria central to the problem and relevant to the stakeholders
Clarify goals, values and objectives
Identify desirable and undesirable outcomes
Is there a rank order of importance among the criteria? What will be the rules for
comparing alternatives?
Administrative Ease
Costs and benefits
Effectiveness
Equity
Legality
Political acceptability
 
3) Identify Alternative Policies

Consider a wide range of options

Consider the status quo, or no-action alternative
Consult with experts
Brainstorming, Delphi, Scenario writing
Redefine the problem if necessary
 
4) Assess Alternative Policies

Select appropriate methods and apply them correctly

Estimate expected outcomes, effects, and impacts of each policy alternative
Do the predicted outcomes meet the desired goals?
Can some alternatives be quickly discarded
Continue in-depth analysis of alternatives that make the first cut
 
5) Display and Distinguish Among Alternatives

Choose a format for display

Show strengths and weaknesses of each alternative
Describe the best and worst case scenario for each alternative
Use matrices, reports, lists, charts, scenarios, arguments

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6) Implement, Monitor and Evaluate the Policy

Draw up a plan for implementation

Design monitoring system
Suggest design for policy evaluation
Was the policy properly implemented?
Did the policy have the intended effect(s)?
5.5.3. Role of the Policy Analyst

Policy analysis is a systematic evaluation of the technical and political implications of

alternatives proposed to solve public problems. Policy analysis refers to both the process of
assessing policies or programs, and the product of that analysis. A policy analyst:
Uses qualitative and quantitative data;
Uses a variety of approaches to the problem;
Applies appropriate methods correctly.

Who does policy analysis? Is public policy analysis a calling? A vocation? A service? A guild?
A cult? the role of the policy analyst is to:
Produce arguments for debates about public policy
Produce evidence for decisions about public policy
Act as internal organizational consultants
Act as external policy consultants
Handle both technical and people aspects of policy analysis
 
All policy represents the distribution of power and resources. These policies are an expression of
values. Values and beliefs are often used as short-cuts to decision-making. What code of ethics
should the policy analyst adopt? What about the professional values of obligation, responsibility,
discretion, and citizenship? What about published professional codes of ethics?
 
The policy analyst has responsibilities, to the client, the customer, the self, the profession, the
public interest, fairness, equity, law, justice, efficiency, effectiveness, and the practice itself.
Who is to define what is good? Whose values or goals should be pursued? What is the right thing
to do? Who or what is ultimately to be served? Should the analyst try first and foremost to do
good, or to do no harm? Should the analyst give neutral advice, or normative advocacy? Should
the analyst be supportive or adversarial?
 

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Bias is inevitable in policy analysis. To mitigate the effects of bias, the analyst can:
 Identify all underlying assumptions
 Keep accurate records
 Use multiple sources of information
 Use replicable methods and models
 Identify the client's goals and values
 Identify the formal and informal actors and institutions
 Address relevant professional and ethical considerations
5.6. Cross-Cutting Methods
 
5.6.1. Selecting Techniques

Selecting the appropriate techniques to use in policy analysis depends on a variety of factors:
 What the client wants to know
 The time available
 Knowledge of the decision criteria
 Complexity of the issue
 Available data

Some techniques commonly used in various stages of policy analysis include:

1. Verifying, Defining, and Detailing the Problem

Back-of-the-envelope calculations
Quick decision analysis
Creation of valid operational definitions
Political analysis
Issue paper/first cut analysis

2. Establishing Evaluation Criteria

Technical feasibility studies
Economic and financial feasibility studies
Political viability studies
Administrative operability studies

3. Identifying Alternatives
Researched analysis
No-action analysis

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 Quick surveys
Literature reviews
Comparison of real-world experiences
Passive collection and classification
Development of typologies
Analogy, metaphor, and synectics
Brainstorming
Comparison with an ideal
Feasible manipulations
Modifying existing solutions

4. Assessing Alternative Policies

Extrapolation
Theoretical forecasting
Intuitive forecasting
Discounting
Cost/Benefit analysis
Sensitivity analysis
Allocation formulas
Quick decision analysis
Political feasibility analysis
Implementation analysis
Scenario writing

5. Displaying Alternatives and Distinguishing Among Them

Paired comparisons
Satisfying
Lexicographic ordering
Non-dominated alternatives method
Equivalent alternatives method
Standard-alternative method
Matrix display systems
Scenario writing

6. Implementing, Monitoring, and Evaluating Policies

Before-and-after comparisons
With-and-without comparisons

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 Actual-versus-planned performance
Experimental models
Quasi-experimental models
Cost-oriented approaches

7. Cross-Cutting Methods
Identifying and gathering data
Library search methods
Interviewing for policy data
Quick surveys
Basic data analysis
Assessing information quality
Communicating the analysis

5.6.2. Cross-Cutting Methods

Cross-cutting methods are techniques of policy analysis that can be used at nearly any stage in
the analysis. They are useful tools for the policy analyst to know how to use. They include:
Identifying and gathering data
Library search methods
Interviewing for policy data
Quick surveys
Assessing information quality
Basic data analysis
Communicating the analysis

5.6.3. Identifying and Gathering Data

Policy analysts need to know how to search for existing information, such as
Academic Journal Articles
Archives
Census Records
Hearings
Legislative History
News Media Reports
Past Policy Analyses
Public Agency Reports

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 Public Records

People are also good sources of information, including

Advocacy Groups
Experts
Issue Networks
Personal Contacts
Professional colleagues
Even personal observation can be a source of data. Personal observation can furnish data on
usage patterns, compliance patterns, insights into the problem, anecdotes, and innovative
suggestions. However, observation is time consuming and may suffer from problems with
accuracy, bias, limited samples, and difficult to quantify data. Observational methods include
"sidewalk surveys," mechanical counting devices, measures of erosion, satellite images, etc.
Other sources of information include:
Public Agencies
Libraries
Local Agencies
Non-Profit Agencies
Private Organizations
Research Institutes
State Agencies
Think Tanks
Universities

Policy analysts should seek information from multiple sources ("triangulation"), especially on
controversial data. Problems with sources of data include:
 Outdated statistics
 Irrelevant data
 Misleading data
 Poor quality data
 Biased data

Looking for documents that may be helpful in doing the policy analysis is important. But three
questions that must be asked are:
1) do such documents exist?
2) can they be obtained in a reasonable time?
3) when is additional searching no longer worthwhile?

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5.6.4. Library Search Methods

Libraries are excellent sources of policy-related information. To make the most of library
resources, follow these strategies:
1) look up basic policy-related terms and definitions in encyclopedias, dictionaries, or a
subject-related thesaurus; each policy issue area has its own terms and jargon

2) develop a list of search terms for searching computerized bibliographic data bases,
electronic guides to library holdings, and Internet access;

3) identify key journals in the field and skim their table of contents for the past 1-2 years;

4) check guides to current periodicals, newspapers, news magazines, trade journals, and
guides to the literature

5) check annual reviews in the policy subject area; conference proceedings on the
subject; government hearings on the subject, etc.

5.6.5. Interviewing for policy data

Interviewing is typically conducted with either mass, elite, intensive, or focus group
methodologies. Interviewing is typically used:
To gather historical background, context, and evolution of the policy
To gather basic facts about the problem
To assess political attitudes and resources of major players
To gather ideas about the future, trends, and forecasts
To generate additional contacts and materials (snowball technique)

Elite (specialist) interviewing is most typically used when:

It is a short-term policy project
It is on a new topic
There is a lack of existing literature
Informants are reluctant to put information into writing
No quantitative data are available
It is not feasible to use hired interviewers

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 To set up interviews, the policy analyst usually:
arranges appointments in advance
makes formal or informal requests (letterhead, telephone)
sends a reminder letter and follows up with a phone call
gives the name of a mutual friend or influential person as a reference
collects background information prior to the interview
will conduct a telephone interview if a face-to-face interview is not possible

When conducting the actual interview, it is usually accepted behavior to:

ask before using any recording device
promise anonymity and/or confidentiality of information
take notes during the interview
keep to the allotted time
thank the person for the interview
send a follow-up letter

5.6.6. Quick surveys

Surveys can be conducted by mail, in person, or by telephone. Survey methodology is described in many
standard research texts. Cross-sectional interviews are conducted at one point in time across a wide
sample of the population. Longitudinal interviews are conducted repeatedly over many time intervals
(months, years, decades) with the same individuals. A comparison of the advantages and disadvantages
of the most typical surveys is displayed below.
 
Type of  Response Sample Concerns Staffing Other concerns
Survey Rate
Mail 15% May not be representative Least staff time required Response rate improves with gifts
Telephone 50% Limited to those with Moderate staff time required Short and simple questions
telephones
In-Person 75% May be needed for less- Most intensive; most Can cover complex issues
educated supervisors

5.6.7. Assessing Information Quality

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When collecting information and data for policy analysis, the analyst must assess the quality of
the information and data collected.

Document Analysis:
When was the document generated?
What was the original purpose of the document?
Is there an obvious bias in the document?
What is the pattern of word usage?
Does the document omit important information?
Are there errors in the document?

Assessing Interviews:
Was the information plausible?
Was the information consistent?
Does the information diverge from accepted facts?
Did the respondent report direct experience?
Did the respondent have ulterior motives?
Did the respondent operate under some constraints?
Was the respondent candid?
Did the respondent acknowledge areas of ignorance?
Was the respondent self-critical?

Data quality:
Are multiple sources of information consistent?
Were data collected independently, from separate sources?
Is the data original or re-organized?
Do the data pertain to a particular geographic locale?
Were the data collection methods systematic?
For what purpose were the data originally collected?
How old are the data? Were they affected by timing?
Was there bias or special motivation in the collection of the data?

5.7. Basic Data Analysis

Data are not generally useful in their raw form. Instead, they must be analyzed. Data are most
often analyzed using descriptive and/or inferential statistics. Descriptive statistics search for

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patterns in the data and look for relationships to gain insight into the problem. Inferential
statistics attempt to estimate a characteristic of a population from data gathered from a sample.

Descriptive univariate statistics look for patterns in the data. They are best presented in graphical
form, using frequency distributions, cumulative distributions, bar charts, histograms, pie charts,
and frequency polygons. Statistics include the mean, median, and mode, as well as the range,
standard deviation, and variance.

Descriptive bivariate statistics look for relationships in the data. They are best presented in
tables, plots, scatter-grams, and time series graphs. Measures of association include Lambda,
Gamma, and Pearson's r.

Inferential statistics make probabilistic statements (or inferences) about a whole population
based on the results obtained from a partial sample. Measures of statistical significance are used
to estimate whether two groups differ from one another, or whether there is a chance that a
relationship observed in a sample also exists in a population. These measures include Chi
Square, Z-scores, t-tests, and F-tests.

5.8. Communicating the analysis

Written Communication:

Work from an outline--keep separate folders for each section of the analysis
Work from goals and deadlines--generate a complete draft and then fill in the holes
Get help--with editing of rough drafts; revise for clarity; incorporate new ideas
Include a Table of Contents--sections include Executive Summary; Problem Definition;
Decision Criteria; Alternatives; Comparison of Alternatives; Conclusions and
Recommendations;
Use graphics--charts, graphs, flow charts, tables, maps, pictures, diagrams, drawings, etc.
Use geographic information systems (GIS)--to generate maps of data distributions
Simplicity--use the active voice for verbs
Accuracy--verify facts; triangulate; check all calculations
Documentation--note all formulas used and assumptions made
Fairness--use references and give credit to your sources of data
Neatness--use good grammar, spelling, punctuation, syntax, etc.

Oral Presentations

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Know your audience
Keep it short and simple
Use visual aids and handouts
Allow time for questions, comments and criticisms

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