PPI DSE SOL Notes Sem 6

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Unit 1-5 - Public policy in India sol material semester 6
Political science (University of Delhi)
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B.A. (Hons.) Political Science Semester-VI
Discipline Specific Elective (DSE-3)

Public Policy in India
Study Material : Unit 1-5
SCHOOL OF OPEN LEARNING

University of Delhi
Editor : Dr. Mangal Deo

Dr. Shakti Pradayani Rout
Department of Political Science

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Graduate Course
Discipline Specific Elective (DSE-3)

Public Policy in India
Contents
Pg. No.
Unit-1 : Introduction to Policy Analysis Ms. Revathy V Menon 01
Unit-2 : The Analysis of Policy in the Context of
Theories of State Dr. Deepika 11
Unit-3 : Political Economy and Policy: Interest Groups and
Social Movements Ms. Revathy V Menon 23
Unit-4 : Models of Public Policy Decision Making in India Dr. Neelam Jain 37
Unit-5 : Ideology and Policy: Nehruvian Vision, Economic
Liberalization and Recent Developments Priya Dahiya & Rinki 48
Edited by:
Dr. Mangal Deo
Dr. Shakti Pradayani Rout
SCHOOL OF OPEN LEARNING

UNIVERSITY OF DELHI
5, Cavalry Lane, Delhi-110007

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Unit-1
Introduction to Policy Analysis

Ms. Revathy V Menon1
1. Structure
1.1 Introduction
1.2 Evolution of Policy Analysis
1.3 Concept of Policy Analysis
1.4 Types of Policy Analysis
1.5 Context for Policy Analysis
1.6 Methods and Techniques in Policy Analysis
1.7 Procedure/Steps of Policy Analysis
1.8 Conclusion
1.9 Practice Questions
1.10 References
1.1 Introduction
The world is changing rapidly with an uncertain future. Policymakers are confronted with a
plethora of policy options, each with its own set of repercussions that are both far-reaching
and impossible to predict. Different groups value and interpret outcomes differently.
Nonetheless, it is the job of public policymakers to establish and implement policies that will
have the greatest impact on the health, safety, and well-being of their constituents.
Policymaking is therefore, difficult in this environment. There are a lot of uncertainties.
There is scarcity of data. It is difficult to simply identify the major policy issues, and one
does not have the luxury of disregarding certain topics because they are too complicated or
unmanageable. Important policy decisions, on the other hand, are made on the basis on
hunches and guesses in the absence of study. Important policy decisions, on the other hand,
are made on the basis of conjectures and estimates, which can have unfavorable
consequences. Policy analysts in the United States and Europe have developed a systems-
based approach and a set of tools for examining public policy issues that illuminate
uncertainties and their implications for policymaking, identify tradeoffs among alternative
policies, and support the policymaking process over the last 50 years.
1
Presently Ad-hoc Faculty at Department of Political Science, Kamala Nehru College, University of Delhi.

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Any policy decision requires knowledge on the specific problem under consideration.
Information is processed in order to examine data that has been transformed into a
meaningful form and is relevant in the context of the user for decision making. One essential
purpose of policy analysis is to assist policymakers in arriving at feasible informed policy
choices with a reasonable anticipation of what those policy choices will result in. In the
world of complicated political and social economic processes, there are no full stops. It is
difficult to forecast the efficacy of a certain policy in relation to the desired aims while
recognizing potential and intended repercussions. If policymaking is an art, policy analysis
adds a touch of science to the mix.
1.2 Evolution of Policy Analysis
Policy analysis is a relatively new academic discipline. Traditionally, social scientists and
political scientists were preoccupied with institutions and the processes of public
policymaking. Sociologist Daniel Lerner (1917–1980) and political scientist Harold Laswell
(1902–1978) coined the term “policy sciences” in 1951. Their work is frequently
acknowledged as laying the groundwork for the evolution of how public policy are
researched. The classical technique evolved over time to incorporate examination of the
substance and process of real policies; a subject now known as policy analysis.
Policy analysis, a subfield of policy studies, arose and flourished over the 1960s and
1970s. Various triggers have been identified as boosting the field’s growth. Among the
triggers were social concerns about civil rights, women’s liberation, the Vietnam War (1957–
1975), Middle Eastern politics, growing energy costs, inflation, and environmental
protection. The rising interaction between government and the academic community, as well
as the government’s increasing dependence on the academic community for devising
techniques of optimizing productivity in the face of dwindling resources, aided in the field’s
expansion. In addition, as it sought aid in tackling the aforementioned societal challenges, the
government increased research funds and job possibilities. Academics and think tanks were
able to profit on government expansion thanks to new analytical and multidisciplinary
methodologies. One such development is the Keynesian economic revolution of the 1930s
and 1940s. This innovation made it possible for the government to intervene in economic
decision-making. Applied policy research continues to play a significant part in modern
government decision making on concerns of efficiency, effectiveness, and equality.
Although largely inspired by political science disciplines, policy analysis is eclectic in
that it borrows from and lends to a wide range of academic subjects. Economics, for example,
contributes cost-benefit analysis and models linked to efficient resource allocation. The
emphasis in economics on prescriptive findings is likewise incorporated into policy analysis.
Psychology contributes to policy analysis the research paradigm of experimental and control
groups, as well as other statistical inference techniques. Furthermore, psychology offers
theories and insights on the use of incentives and punishment as strategies for fostering
certain behaviors. The study of public policy has benefited from sociology’s interest in social

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problems. Furthermore, comparative policy analysis has origins in anthropology, geography,

and history.
1.3 Concept of Policy Analysis

According to Patton and Sawicki, the term “policy analysis” was likely coined by Lindblom
in 1958. Since then, a number of subject experts have provided definitions. Below are some
of the key features of policy analysis as outlined by some of the scholars:
 Policy analysis, according to Dunn, is an applied discipline. Policy analysis, in his
words, is “...an applied discipline that use numerous methods of investigation and
argument to develop and change policy-relevant knowledge that may be used in
political contexts to solve public problems.”
 Policy analysis, according to Jacob B. Ukeles, is the systematic examination of
various policy possibilities. He believes that policy analysis is important as the
systematic examination of various policy alternatives, as well as the gathering and
integration of information supporting and opposing each option It involves problem-
solving techniques, data gathering and analysis, and some efforts to anticipate the
outcomes of certain courses of action.
 Policy analysis, according to Patton and Sawicki, is a systematic review of the
technical and economic feasibility and political viability of various policies,
implementation techniques, and policy adoption effects.
Policy analysis can be classified as:
Empirical, Evaluative or Normative Policy Analysis
Three categories of questions are determined for debate when processing information for
policy analysis. These are the following:
i) How did the problem get resolved earlier?
ii) Were the policy’s aims met?
iii) What should be done in terms of future actions?
The empirical method is based on historical policy interpretation. This method focuses on
evaluating the causes and consequences of certain public policies in order to answer the first
question.
Program evaluation is the emphasis of the evaluative approach to policy analysis. It
establishes a policy option’s worth or value. For example, a study of government spending on
primary education can focus on a specific goal, such as whether or not a specific target was
met. The primary goal of nonnative policy analysis is to recommend future courses of action
for a given situation. The type of material in this situation is persuasive. For example, a

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government may establish a regulation prohibiting contaminants from being discharged into a
river from surrounding habitations. As part of this strategy, the government may advise local
governments to take the required steps to prevent contaminants from entering the river.
Retrospective/Prospective Policy Analysis
Retrospective policy analysis is the study and interpretation of past policies from a historical
perspective. This form of policy analysis is carried out to confirm the primary findings of
previous policy research on the issue at hand. Retrospective research would be, for example,
a study on labor discontent in an industrial company that has already deployed automation.
Ex-post or post-hoc policy analysis are other terms for retrospective policy analysis.
The future outcomes of a proposed policy are the focus of prospective policy analysis.
For instance, a decision maker may have four policy options when it comes to creating a fire
station in the city’s east, west, south, or center areas. In this example, the policy analysts are
attempting to forecast the future status of results from various policy options. Pre-hoc, or
anticipatory policy analysis are all terms used to describe prospective policy analysis.
Retrospective policy analysis gives knowledge that can be used to make decisions. This
is due to the advancement of scientific methodologies, which may prevent policymakers from
manipulating data. Prospective policy analysis, on the other hand, frequently generates a
significant gap between the chosen solutions to the problem at hand and the efforts made by
the institutions involved to resolve it.
Predictive/Prescriptive/Descriptive Policy Analysis
Predictive policy analysis is the process of predicting future situations as a result of the
implementation of specific policy options. Prescriptive analysis suggests behaviors that lead
to a specific result. When policy analysts are unsure about the nature of a problem’s solution
or when there is no programmed mechanism to choose a specific answer among options, they
can use prescriptive policy analysis. In this case, the policymaker’s views, preferences, and
beliefs impact the decision to choose one option over another.
Historical or retrospective policy analysis is referred to as descriptive policy analysis. It
also has to do with assessing a new policy as it is being implemented. Policy analysis is
carried out after the policy has been implemented. It is more important to comprehend the
problem than to fix it. However, descriptive analysis is frequently used in the development of
prospective policy. The adopted policies are monitored and assessed to determine whether the
previous policy should be maintained or modified. The data gathered in this context will also
aid in the resolution of future issues. Before the advice is implemented, the recommendation
based on the prognosis or prescription takes effect. After the recommendation has been
adopted, the descriptive and evaluative policy analyses are used. As a result, while
descriptive and evaluative analysis are concerned with previous activities, prescriptive or
predictive analysis is concerned with future paths of action.

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1.5 Context for Policy Analysis

A rational, methodical approach to making policy decisions in the public sector is known as
public policy analysis. It’s a method for generating knowledge about the consequences of
various policies. It employs a range of technologies to gather this data and deliver it to those
involved in the policymaking process in a way that aids their decision-making. Because it
‘draws on intuition as much as procedure’, it is more of an art than a science.
As long as human dignity and meaning exist as important values, social research will
never acquire the rigour of the physical sciences because it is impossible to isolate human
views from the context and process of analysis. Policy analysis, on the other hand, employs
the scientific method. This implies that
 the work is both open and explicit, and therefore
 the research is objective and empirical;
 the work is in line with what is already known, and
 the outcomes are verifiable and repeatable.
Its goal is to aid policymakers in selecting a course of action from a plethora of complex
options in the face of uncertainty. The word ‘aid’ stresses that policy analysis is utilized as a
choice aid by policymakers, much as check lists, advisers, and horoscopes are. Policy
analysis is not designed to take the role of policymakers’ judgement. Rather, the purpose is to
improve the foundation for that decision by assisting in the clarification of the problem,
providing the alternatives, and comparing their effects in terms of the relevant costs and
advantages. The term ‘complex’ refers to a policy that affects a system that comprises people,
social structures, natural areas, equipment, and organisations; the system being studied has so
many variables, feedback loops, and interactions that projecting the effects of a policy change
is difficult. Furthermore, the options are frequently many, including a variety of technologies
and management practices, and resulting in a variety of outcomes that are difficult to
anticipate, let alone forecast. The word ‘uncertain’ underlines those decisions must be made
based on imperfect information about options that do not yet exist physically, for a future
world that is unknown and mostly undetermined.
Policy analysis is carried out at all levels of government, as well as in for-profit and non-
profit policy research organizations and consulting businesses. It is a generic approach to
problem solving rather than a method for tackling a specific problem. It is not a single
technique, but rather a generic framework that incorporates a range of approaches (including
multicriteria decision analysis). Most importantly, it is a process, with each phase vital to the
study’s success and requiring connections to policymakers, other stakeholders, and the
policymaking process.
The method is based on a comprehensive system description of a policy field (see Figure
1). A system model that reflects the policy domain is at the heart of the system description.
The system model defines the system by (1) defining its boundaries and (2) describing its

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structure, which includes the constituents as well as their linkages, flows, and relationships.
Figure 1: Elements in the policy analysis approach.

External factors acting on the system are divided into two categories: external forces beyond
the control of the participants in the policy domain and policy changes. Both types of factors
are external developments that can have an impact on the system’s structure (and, hence, the
outcomes of interest to policymakers and other stakeholders). These changes are fraught with
uncertainty. External factors are inherently unpredictable. They include the economic
climate, technological advancements, and people’s interests and behavior. The policy
changes are not in contention, but their impact on the system’s structure is.
Scenarios are often the analytical tools used to depict and cope with this uncertainty.
Each scenario describes a different possible future state of the system. Scenarios do not
predict what will happen in the future; rather, they show what is possible. Furthermore,
scenarios do not offer entire descriptions of the future system; rather, they include those
aspects that may have a significant impact on the outcomes of interest.
Policies are the collection of factors within the control of policy actors that impact the
structure and performance of the system. A policy, in broad terms, is a collection of activities
made by a government to regulate the system, help address issues within it or created by it, or
acquire advantages from it. When discussing national policy, the issues and advantages are
often related to broad national goals, such as tradeoffs between national environmental,
social, and economic goals. A goal is a broad, non-quantitative policy objective. Policy
actions are meant to aid in the achievement of the objectives.
Criteria are used for each policy aim to assess the extent to which policy measures can
aid in achieving the goal. These criteria are directly connected to the system’s outputs.
Outcomes of interest are system outcomes that are relevant to policy aims and objectives.
Unfortunately, even if a policy action is developed with a specific purpose in mind, it seldom
affects only one result of interest. Policy decisions must thus include not just evaluating the
outcomes of interest in relation to the policy aims and objectives, but also determining the
preferences of the various stakeholders and establishing tradeoffs among the outcomes of

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interest given these multiple sets of preferences. The analysis of tradeoffs among policies, as
well as the exploration of the impact of various policies on the complete range of outcomes of
interest under a number of scenarios, necessitates a systematic analytical method that
supports the policy making process.
1.6 Methods and Techniques in Policy Analysis
Policy analysis methods differ from analyst to analyst. Various schools of thinking, including
behaviorist, post-behaviorist, and rational choice theory, affect analysts in terms of the sorts
of questions they ask and the techniques they use to answer them. A variety of methodologies
are used by public policy analysts. An empirical method can be used by analysts to determine
the causes and repercussions of public policy. One of the primary goals of such an approach
is to comprehend a policy issue. Such an approach tends to produce better descriptive and
predictive data. An analyst can also employ an evaluative method, in which the key question
is the value or usefulness of previous or future policy prescription. Finally, adopting a
normative perspective, analysts question what should be done. As a result, their work
produces more prescriptive sorts of knowledge. Analysts can also investigate policy
substance or the policymaking process.
Various methodological methods and approaches have been used in the examination of
public policy over the years. Policy analysts’ methodologies are influenced by theories
originating from management, organizational development, and psychology, as well as the
use of economic and political models. Analysts use a variety of qualitative and quantitative
methodologies. Case studies, economic modelling, quasi-experimental techniques, causal-
path analysis, operations research, and correlations analysis are a few examples.
The policy analysis team consists of analysts who present alternative policy choices
using various methods and procedures. Graphs, diagrams, tables, decision trees, and
mathematical equations can all be used to represent these methodologies and procedures. In
policy analysis, tools and techniques including cost-benefit analysis, input-output analysis,
survey methods, computer simulation, and optimization techniques like linear programming,
marginal analysis, and others play an essential role. For example, the compound interest
calculation approach is extensively used to determine the values for various rates of interest
on savings (or loans) for a particular length of time.
The approaches and strategies are quite helpful in gathering data for policy analysis. The
majority of these technical tools are employed to aid decision-makers. Politics, it is often
assumed, dominates policy analysis. The use of quantitative analysis in policy analysis, on
the other hand, has a brighter future. Because it is a more scientific and transparent
procedure, economic, technological, and scientific criteria are given more weight.
1.7 Procedure/Steps of Policy Analysis
In general, the policy analysis process entails the same set of logical phases. Most projects
only incorporate a fraction of the stages. The processes are not always carried out in the same

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order, and there is generally feedback between them. Figure 2 summarizes the steps, which
are briefly discussed below.
Step 1: Identify Problem (Determine the nature of the problem)
This stage establishes the parameters for what comes next. It entails identifying the questions
or issues at hand, establishing the context in which the issues will be examined and the
policies will be implemented, clarifying constraints on possible courses of action, identifying
the people who will be affected by the policy decision, identifying the major operational
factors, and deciding on the initial approach.
Figure 2: Steps in a policy analysis study.

Step 2: Specify Objectives (Determine the goals of the new policy).
A policy, in broad terms, is a collection of activities made to address an issue. The
policymaker has specific goals that, if reached, will ‘solve’ the problem. The policy goals are
determined in this stage. Most public policy issues have numerous objectives, some of which
are in contradiction with one another.
Step 3: Decide on Criteria
Determine the criteria (measurement of performance and cost) to be used to compare various
plans. Measuring the extent to which a policy achieves a goal is necessary. This stage entails
determining policy effects that can be estimated (quantitatively or qualitatively) and are
directly connected to the objectives. It also entails identifying the costs (negative outcomes)
that might result from a programme and determining how to assess them.
Step 4: Select Alternatives
Determine which alternative policies will be evaluated. The policies whose consequences are
to be calculated are specified in this stage. It is critical to include as many as have a
reasonable probability of becoming beneficial. If a policy is not included in this phase, it will

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never be analyzed, thus there will be no way to tell how excellent it is. In order to assess how
much of an improvement may be expected from the other choices, the existing policy should
be included as the ‘base case.’
Step 5: Analyze Alternatives (Examine each option)
This entails calculating the potential implications of implementing the alternative, where the
repercussions are quantified in terms of the criteria established in Step 3. This stage often
involves the use of a system model or models. This stage is often carried out for each of
multiple potential future planets (scenarios).
Step 6: Compare Alternatives (Evaluate the options in terms of predicted costs and
outcomes)
This stage entails assessing the anticipated costs and impacts of each scenario, considering
choices between them, and selecting a preferable alternative (which is robust against the
possible futures). Return to Step 4 if none of the alternative options considered thus far are
good enough to be implemented (or if new parts of the problem have been discovered, or the
analysis has led to new alternatives).
Step 7: Implement the chosen alternative (Put the preferred alternative into action)
This stage entails gaining acceptance of the new processes (both inside and outside the
government), training personnel to utilise them, and carrying out additional activities to put
the policy into action.
Step 8: Monitor and evaluate the results (Keep a watch on the findings and assess
them). This phase is required to ensure that the policy is truly achieving its intended goals. If
it is not, the policy may need to be changed or new research conducted.
1.8 Conclusion
Policy analysts are frequently confronted with ethical dilemmas. Most ethical issues
confronted by policy analysts, planners, experts, and advisors on a daily are resolved without
controversy. These are connected to administrative decisions, bureaucratic procedures, and
customer and supervisory behavior guidelines. The more complicated questions are the moral
implications of our methodology, the ethical substance of decision-making criteria, and
ethical issues that arise during the examination of important policy alternatives. The Pareto
rule, for example, asserts that an optimal income distribution in society is one in which some
individuals benefit while others suffer losses. That is, Pareto optimality ensures that everyone
in society keeps the money to which they are due based on their aptitude and work. However,
because the Pareto optimality does not represent unfair entitlements to income based on
illegality, fraud, racism and other forms of discrimination, this may not happen in practice.
Even proponents of the Pareto optimality rule, on the other hand, claim that applying it
violates their own moral values about ability and work.

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1. What is policy analysis? Describe the process of policy analysis.
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2. Examine the various types of public policy analysis.
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3. Evaluate various elements in the policy analysis approach.
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1.10 References
Lasswell, H. D. (1970). The emerging conception of the policy sciences. Policy
sciences, 1(1), 3-14.
Dye, T. R. (2013). Understanding public policy. Pearson.
Jenkins, B. (1997). Policy analysis: Models and approaches. The policy process: A reader, 2.
Nagel, S. S. (Ed.). (1975). Policy studies and the social sciences (Vol. 2). Transaction
Publishers.
Nagel, S. S. (1984). Contemporary public policy analysis. Policy Studies Journal, 12(4), 780-
780.
Sapru, R. K. (2004). Public Policy: Formulation, Implementation. Evaluation.
Sapru, R. K. (2016). Public policy: formulation. Implementation and Evaluation, 2nd Edition,
New Delhi: Sterling Publishers Private Limited.
Wildavsky, A. B. (1979). Speaking truth to power. Transaction Publishers.
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Unit-2
The Analysis of Policy in the Context of Theories of State

Dr. Deepika
2. Structure
2.1 Introduction
2.2 Learning Objectives
2.3 Policy Analysis
2.4. Distinction between Policy Analysis and Related Concepts
2.4.1 Policy Analysis and Policy Advocacy
2.4.2 Policy Analysis and Policy Management
2.6 Process of Policy Analysis
2.6.1. Identification of Problems and Objectives
2.6.2 Specification of Alternatives Policy
2.6.3 Evaluating Policy Alternatives
2.6.4 Recommending Policy Action
2.6.5 Monitoring Policy Outcomes
2.7 Policy Analysis in context of the Theories of State
2.8 Summary
2.10 References
2.1 Introduction
Public Policy, as a subject or a field of inquiry has a long past, though the contemporary
policy analysis has emerged in twentieth-century. After second world war the subject of
policy sciences, has emerged as a new discipline to offset such problems in the process of
policy making. It can be stated that policy sciences is a body of knowledge which enhances
the efficiency of public policy-making and also the effectiveness and efficiency of
implementation and evaluation of policies.
Public policies are basically governmental decisions or the course of activities that the
government takes up to achieve certain goals and objectives. The major function and role of
public policy is to shape the society for its betterment. Public policies involve augmenting the
democratic or political aptitude of the citizenry and not simply provide improved services.2
2
T.A. Smith, Post- Modern politics and the case for constitutional renewal, Political Quarterly, summer 1994, p-
128-137.
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Earlier, study of public policy was dominated by institutions of state and philosophies
followed by the government. It may be noted that even though the policies are not the main
focus, yet public policy is an important element of political process. Dye says:
“……institutional studies usually described specific government institutions …. without

systematically Inquiring about the impact of institutional characteristics on policy outputs….
However, the connection between institutional adjustment and content of policy remained
mostly unexamined”.3
Dye mentions that how public policy has become the central focus of political science.
Nowadays, Policy analysis play an important role in the improvement of polices and hence
forms a major part of policy sciences. Primary objective of Public Policy analysis is to assist
policymakers in making informed decisions while choosing policies by providing an
expected outcome of these policies. It is pertinent to note here that predicting how a policy is
going to unfold and what intended and unintended consequences may follow its
implementation becomes more arduous owing to the political and socio-economic
complexities. Moreover, Policy analysis as a process of multi-disciplinary inquiry designed to
create, critically assess and communicate information that is useful in understanding and
improving policies. Therefore, this Unit, will discuss the concept of policy analysis in detail.
In addition, an attempt will also be made to explain the changing conceptualisation of policy
analysis in the context of theories of State in the subsequent sections.
After studying this Unit, you should be able to:
 Explain the meaning, nature and scope of policy analysis;
 Discuss and distinguish between policy analysis, policy management and policy
advocacy.
 Understand the various types of policy analysis;
 Describe the process of policy analysis, and
 Examine the theoretical framework of policy analysis with an emphasis on the various
contemporary state theories.
2.3 Policy Analysis
Policy Analysis is as old as the State itself. As the State developed and intellectual
technology became more available, the nature of analysis of the choices and strategies for
policies changed. In this changed context, there has been considerable growth in the research
3
Thomas Dye, Understanding Public Policy, 10th ed. (New Delhi: Pearson Education, Singapore, Indian Reprint
2004, p.13.
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and training in policy analysis since the early 1970s in many developed countries.4 In these
countries, policy analysis has been substantially stimulated by the government’s increased
concern for public policy problems.
Public policy analysis is thus nothing more than estimating the impact of public policy
on the government programmes. The salient aspects of policy analysis as explained by some
experts of the subject are mentioned below.
The Dictionary of Public Administration defines policy analysis as: systematic and data-
based alternative to instinctive judgements about the effects of policy or policy options. It is
used:–
(a) for problem assessment and monitoring
(b) as a ‘before the fact’ decision tool and
(c) for evaluation.5
William Dunn explains, that the policy analysis is an applied discipline. In his words,
“Policy analysis uses multiple methods of inquiry and argument to produce and transform
policy-relevant information that may be utilized in political settings to resolve public
problems”.6
According to Patton and Sawicki, policy analysis is a “systematic evaluation of the
technical and economic practicability and political viability of alternative policies, strategies
for implementation, and the consequences of policy adoption”.7
Jacob B. Ukeles observes that policy analysis as the systematic investigation of
alternative policy options and the assembly and integration of the evidence for and against
each option. It involves a problem-solving approach, the collection and interpretation of
information, and some attempt to predict the consequences of alternative courses of action.
Dye describes policy analysis as the ‘thinking man response’ to demands. He further
observes that public policy analysis specifically involves:
(a) A primary concern with explanation of policy rather than the instruction of policy.
(b) It is a careful search for the causes and consequences of public policies through the use
of the tool of systematic inquiry.
(c) An effort to develop and test general propositions about the causes and consequences of
public policy and to accumulate reliable research findings of general relevance.8
4
See for example, E. Stokey and R. Zeckhauser, A primer for policy analysis (New York: W.W. Norton, 1978).
5
Ralph C. Chandler and Jack C. Plano, The Public Administration Dictionary (New York: John Wiley, 1982),
p-88.
6
William Dunn, Public Policy Analysis: An Introduction (New Jersey: Pearson, 20054).
7
Carl Patton and David Sawicki, Basic Method of Policy Analysis and Planning (New Jersey: Prentice- Hall.
1993).
8
Thomas R Dye, Understanding Public Policy, 10th ed. (New Delhi, Person Education (Singapore), Indian
Reprint 2004) p-6-7.
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2.4 Distinction between Policy Analysis and Related Concepts

The discipline of policy analysis can be better appreciated when compared with other related
concepts.
2.4.1 Policy Analysis and Policy Advocacy
Public policy analysis is the study of how governmental policies are made and implemented,
and the application of available knowledge to governmental policies for the purpose of
improving their formulation and implementation. Policy analysis is a technique to assess
organizational effectiveness by means of examination and evaluation of the effect of a
programme. Policy analysis is a systematic and data-driven tool to study the effects of a
policy to be implemented.
Policy advocacy involves research and arguments which are intended to influence the
policy agenda inside or outside the government. Also, it primarily involves what governments
are supposed to do, or suggesting changes in what they actually do by means of discussion,
organization and involvement. Moreover, policy analysis examines the impact of policy by
using tools and techniques and studying the policy systematically. Policy analysis is not the
same as prescribing what policy government ought to pursue at a given situation. Rather,
government analyse the situation when there is a need for government intervention in the
form of a policy.
2.4.2 Policy Analysis and Policy Management
Policy analysis deals with the substantive examination of policy issues and the identifying
alternatives by following systematic approaches and applying explicit methods. It covers
various methods and concepts, some of which are quantitative, including social
experimentation, game simulation and contingency planning etc. On the other hand, policy
management deals with the general administration of policymaking and the process of
preparing policies so as to produce high quality policies.
While studying Policy Analysis the following questions are required to be answered. These
are:
i) How was the existing problem tackled?
ii) Were the objectives of the policy achieved?
iii) What should be the future courses of action?
On the basis of these fundamental questions various types of policy analysis tools are used.
Some of them are mentioned as follows:
Empirical/Evaluative approach of Policy Analysis
The Empirical approach is based on analysis of the previous policies of the past. Under this
approach, we are required to analyse the causes and effects of public policies. For example,
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we may analyse the expenditure of the government in primary health sector over a certain
period and predict its future trends.
Evaluative approach on the other hand lays emphasis on programme evaluation. This
approach seeks to find the worth or value of a policy that is chosen. For instance, a study of
state’s expenditure on primary healthcare may focus on a certain objective, such as the
percentage, whether a given target was met or not?
The normative policy analysis involves highlighting future courses of action for a certain
issue. Here, the type of information provided is advocative in nature. It can be understood by
an example that the government may have a policy on women empowerment, therefore to
properly implement the same it may be required to recommend to states and local authorities
the necessary steps to encourage participation of women in various activities and to safeguard
their rights.
Retrospective/Prospective Policy Analysis
Retrospective policy analysis approach involves historical analysis and interpretation of
previous policies. This approach is often used to confirm the major aspects of historical
policy research available on the problem at hand. For instance, study on the growth of small
and marginal businesses in an economy that has changed its economic policy from
conservatism to liberalisation, such a study would require retrospective analysis. This
approach is also known as ex-post or post-hoc policy analysis.
Prospective policy analysis focuses on the future course of events in case a certain policy
is implemented. For e.g., government wishes to conduct a vaccination drive in a state, it
needs to decide where to establish vaccination camps, which health agencies to involve
among other policy options available to them. Such an approach is often termed as ex-ante,
pre-hoc, or anticipatory policy analysis.
Retrospective policy analysis provides information, that is used directly in the decision-
making process. That’s because of development of scientific methods that prevents
manipulation of data by the policy makers. Whereas, prospective policy analysis often creates
a large gap between the preferred solutions to the problem and the efforts made by the policy-
makers to resolve them.
Predictive/Prescriptive/Descriptive Policy Analysis
Predictive policy analysis involves predicting the future course that may result from
implementation of a certain policy alternative. This approach recommends actions that shall
result in a specific outcome. When the policy-makers are not confident a solution to a certain
problem or there is no pre-defined way to choosing a certain solution over other alternatives
available, then they may go for prescriptive policy analysis approach. In this approach policy
maker’s attitudes, preferences, and beliefs have a major impact on choosing a certain policy
option over other alternatives. For instance, if we conduct a study to check the impact of
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increasing government’s expenditure on girl child education female literacy ratio, this is an
example of prescriptive policy analysis.
Descriptive policy analysis both understanding and evaluating past policies as well as a
new policy as it is implemented. In this approach, policy analysis is done after the
implementation of a policy. The main objective is to understand the problem rather than to
resolve it. Descriptive analysis is also often incorporated with prospective policy analysis.
Once a policy is implemented, it is checked and evaluated to recommend its continuation in
current form or with some modifications. This information is often used while choosing
policies for problems arising in the future.
2.6 Process of Policy Analysis
Edward Quade,9 identified five elements of the policy analysis process and stages such as the
following:
1. Identification of Problems and Objectives
2. Specification of Alternatives Policy
3. Evaluating Policy Alternatives
4. Recommending Policy Action
5. Monitoring Policy Outcomes
2.6.1 Identification of Problems and Objectives
This is quite easily the most crucial stage of policy analysis as it is often observed that the
objectives of the problem analysis are not clearly laid down, rather in other cases they are
even contradictory to each other. Proper identification of the problem is a fundamental
requirement in policy analysis as it lays a strong foundation for an efficient and effective
analysis. Defining the problem involves moving from mundane descriptions to a more
focussed, conceptual plane. For example, an institution which is investigating policy
alternatives for control of pollution in the river Ganges will necessarily need to identify the
source of this pollution i.e. the industrial and human waste being draining into the river.
Once the context of the problem is identified, the next logical step would be to define the
objectives of the mission. Too often, the rational objectives which require careful attention
are overlooked. For example, promoting e-vehicles alone will not work if we continue to
generate majority of our electricity from non-renewable sources of energy.
2.6.2 Specifying Policy Alternatives
After the identification of the policy problem, generation of policy alternatives comes up as
the next task for the policy analyst. This requires a clear understanding of the problem. Often
it is seen that combining various policy alternative may reveal newer dimensions of the
9
Edward Quade, Analysis for Public Decisions, New York: Elsevier, 1975.
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problem, which were not envisaged earlier. Here, policy analyst may also utilize other’s past
experience facing similar problems for a more thorough analysis and understanding of the
problem. This approach immensely helps in generating an robust policy alternative.
Determining policy alternatives is a difficult task as several additional options are also
available. It must be noted here that this process shall not treated merely as a mechanical
exercise as doing so many attractive policies may be ignored and desired results are not
achieved. We can hardly jump directly from the identification of problem to choosing a
preferred policy. All the alternatives should be considered before settling on a desired
solution.
2.6.3 Evaluating Policy Alternatives
Once a policy problem has been clearly stated, and alternatives for policy choice have been
determined, it is important to forecast the consequences of each of the alternatives. Thus,
evaluating the policy alternatives is another step in the sequence of policy analysis. In order
to have a rational policy choice it is pertinent to compare the relative merits and demerits of
all alternative options.
However, the distinction between analysis of policy and evaluation of policy is not well
demarcated. The evaluative studies of policy feeds into analysis of problems and the policy
issues involved. Whereas, policy analysis includes analysis which takes place before and after
a decision is taken, so as to assess or evaluate a policy.
An evaluative criterion shall be chosen which effectively measures, compares and helps
in selecting among various alternatives. Therefore, in this context there are different
techniques and approaches for evaluation analysis aimed at providing a more rational basis
for decisions: such as,
1. Cost-Benefit Analysis Techniques
Cost-Benefit Analysis Approach involves policy-makers to identify and measure the cost and
benefits of policies and programmes by using various economic concepts. The quantitative
outcomes show whether the gains exceed the total costs or not. This approach is also used to
estimate the impact of existing policies and comparing them with proposed policies while
ranking their effectiveness. This is the most reliable, simple and clear-cut system of analysis
but it was incapable of evaluating policies of the intangibles, like the impact of the free meal
policy for children upon their performance; at the loss of environment due to mining; or the
impact of oil refinery on the coastal marine and human life. In general, the cost- benefit
analysis is incapable of assessing all these complex variables in public policy.
2. Performance Measurement Techniques
This method is applied to assess how efficient the use of given resources has been i.e. how
much should have been achieved and how much was actually achieved.
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3. Impact Assessment Techniques

An impact evaluation is done at the post- implementation stage of the policy cycle. It seeks to
measure how the policy or programme has actually impacted upon the problems to which it
was addressed. It is a comparative mode of inquiry, that is comparing the situation before and
after such an intervention. In impact evaluation, an experimental approach may be used.
4. Experimental Techniques
In this technique, experiments are conducted to test the impact of a programme on a group or
an area against what has happened to a group or an area which has not been target of
intervention. For comparative analysis, certain variables of a group is examined at each stage
i.e. before, after and during the programme period, in order to find out the impact of the
policies. Subsequently, the data derived is test for its significance levels using various
statistical methods.
2.6.4 Recommending Policy Action
The next stage in policy analysis relates to making the preferred choice. At this point, the
policy makers need to analyse pro and cons for each alternative and recommend the one
option that is best suited. In contrast, the situation may also arise due to various complexities
that one may have to think of preferences among the various possible outcomes.
2.6.5 Monitoring Policy Outcomes
Generally, the policy analyst is not involved in the implementation and monitoring of
policies. However, for better policies, it is important that policy analyst be consulted in the
maintenance, monitoring, and also the evaluation of the implemented policy. In this context,
Patton and Sawicki observes:
Even after a policy has been implemented there may be some doubt, whether the problem was
resolved appropriately and even whether the selected policy is being implemented properly.10
These concerns require that the policies and programmes are regularly monitored and
evaluated during implementation stage. Overall evaluation of the programme is important to
improve the quality of programme analysis. It must be realized that success of a policy
depends on whether the programme is implemented as it was meant to be, or is able to
produce the intended results, because the under-lying assumptions during the planning stage
were either incorrect, exaggerated or ignored.
Thus, it can be established that the strategy which frames rational policy analysis has its
own complexity of exercises in each stage. Presently there are several criticisms to the use of
analytical work in real policy decision-making. The idea policy analysis as involving a series
of logical stages, problem identification, setting objectives, analysing alternatives, decision-
10
Carl Patton and David Sawicki, Basic Method of Policy Analysis and Planning (New Jersey: Prentice- Hall.
1993).
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making, and implementation, appears to be weak vis-a-vis political and bureaucratic

interests.11 Political realists view policy analysis as a threat to politics. Analysis is not a
substitute for politics or ‘anti-political”, but essentially supplementary and subordinate to the
political process.12
There is a criticism that analysis inhibits political initiatives. It is also argued that it
reduces the impact which political participation may have on the decision taken by the
government. In certain contexts, it appears to be more of a form of democratic distortion than
enlightenment. It is also argued that in situations where there is lack of general consensus
identifying and defining the problems, policy analysis is neither effective in providing
solution to such nor is it capable of resolving societal value conflicts. At its best policy
analysis can provide guidelines on how to achieve certain set of end values. Although its
important to note that it doesn’t determine what those end values should be. Moreover, its
impossible to have social science research to be completely value-free. Today the
government is constrained by many forces, sauch as population growth, patterns of family
life, religious beliefs, class structure, cultural and linguistic diversity, financial resources and
much more – all these variables cannot be easily managed by the government. Moreover, the
policy analysis cycle ignores the real world of policy-making which involves multiple levels
of government and interacting forces.
2.7 Policy Analysis in Context of Theories of State
Generally, policy analysis is a means of explaining the actual essence of public action
because policies are interpreted as revealing its nature. Thus, in contemporary society there
are different schools of thought which describe the questions concerning policy making in
context of the emergence and nature of the state. Scholars like Jobert and Muller locate their
work on ‘The State in Action’ in the matter of bridging the gap that today still separates
research on policies.13 Similarly, Meny and Thoenig define their approach in terms to ‘the
essence of politics’ and classify their arguments on the basis of three theoretical approaches14:
The first one is a pluralist theory of state which conceives the state as a ‘service hatch’
whose purpose is to respond to social demands. From this perspective, public policies are
conceived as responses to social demands and their analysis is in turn located in a perspective
based on the optimisation of collective choices, the rationality of the decision-making
processes and the behaviour of bureaucrats as augmented in theory of limited rationality.
Specify, it believes that group interest and attitude are influential factors in determining
public policies and all issues concerning the nation are decide by multiple and competing
groups. According to this concept, the lack of policies in the area of sport, for example, is a
reflection of the fact that there is no public problem to be resolved. However, this absence
11
R.A. Heineman et al., The world of the policy Analyst (New Jersey: Chatham House, 1990), p-62-64.
12
T.A. Smith, Anti- politics: Consensus, Reform and Protest in Britain (London: Charles Knight, 1972).
13
Jobert and Muller, Theoretical perspectives on policy analysis, 1987, p. 9.
14
Meny and Thoenig, Policy analysis, 1989, p.67.
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could also be interpreted as the result of corporate actions which are aimed at controlling this
sector despite the existence of significant public problems like drug use, corruption etc.
The second interpretative theory places the emphasis on the state as an instrument at the
service of either a social class or specific groups. This theory is similar to neo-Marxist
approach which was mainly developed in the 1970s by urban German sociologists. It
suggested that the analysis of public action makes it possible to demonstrate the weak
autonomy of the state with respect to capitalist interests or the private actors and
organisations of which it consists. Seen in this way, a social problem can only become a
public problem if its resolution serves the interests of the dominant classes. As stated by
society is often divided into the few, who have power, and the many, who do not. Only a
small minority of influential people allocate values for society, whereas the masses do not
decide public policy. It believes that people are passive, apathetic and ill- informed about
public policy. consequently, the incentivise for public policy does not come from masses. The
elites belong to the upper strata of the society. They know what is good for the society in
general. In this situation the polices flow downwards towards the masses.
Moreover, a public policy can be considered as the preferences and values of the
governing elite. Although it is often asserted that public policy reflects objectives or demands
of the people in reality, this is not so in most of the cases. Thus, it is the responsibility of the
elites to frame proper policies that are in the interests of the society as a whole.
Finally, the third neo-institutionalist approach stresses the distribution of power and
interaction among and between actors, either through the representation of different sector-
based or category-base interests or through the organisations and institutional rules which
frame these interactions, as also suggested in neo-corporatist approach. Seen from this
perspective, public sector employees are the most important part, which maintain privileged
and exclusive relationships in the exercising of public power. A policy becomes a public
policy only when it is authoritatively determined by the government institutions. Government
gives legitimacy and universalistic character to a policy. Today in the complex industrial
societies, the technicality and complexity of policy matters and lack of time and information,
among others, have led to the delegation of much discretionary authorities to the
administrative agencies.
In this context, policy analysis makes it possible to understand how the state and, more
broadly, public authorities work. Presently the winds of globalization have been sweeping
across in different countries making a profound impact on the social, political, economic and
cultural relations. Under these circumstances, the role of the government has come under the
scanner. The role of the state in the past was limited; it was a mere ‘regulator’ and not an
‘initiator’ of socio-economic development. But in the changed scenario the role of state
remarkably shifts and it becomes the biggest change-agent in shaping society. Now it is the
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responsibility of the government to enhance its capacity for policy formulation, policy
execution and policy analysis in the face of global onslaughts.
2.8 Summary
Policy analysis consists of the study of the action of public authorities within society from
different perspectives. (Meny and Thoenig, 1989, p. 9). It may not be able to provide
solutions to all the society’s problems but it is a valuable tool in dealing with policy
questions. Policy Analysis helps us to understand the reasons and consequences of public
policies. In broader terms, this framework does allow us to analyse the complexities of the
real world.
In an era of globalization, with the increasing complexity of the society, public policy
analysis has gained considerable importance. Today it is influenced by too many elements
which made the process more complex as it facilitated the entry of numerous players into
policy -making.
1. What is meant by policy Analysis? Discuss the nature and scope of policy analysis?
2. Distinguish between policy analysis and policy advocacy?
3. How would you relate policy analysis with the process of policy management?
4. Analysis different types of policy analysis?
5. Describe the steps involved in the process of policy analysis?
6. Discuss the importance of qualitative and quantitative methods and techniques in
policy evaluation?
7. Examine policy analysis in the Context of numerous theories of State?
8. The impact of globalization on policy analysis can never be absolute. Do you agree
with this view? Elaborate your response.
2.10 References
Dunn, William N., 2004, Public Policy Analysis: An Introduction, Upper Saddle, N.J.:
Pearson.
I Patton, Carl V, and David S. Sawicki., 1993, Basic Methods of Policy Analysis and
Planning, Prentice-Hall, Inc. New Jersey.
Weimer, D. and Vining, A. ,1998, Policy Analysis: Concepts and Practices, Prentice Hall,
New Jersey.
Jenkins, B. (1997) ‘Policy Analysis: Models and Approaches’ in Hill, M. (1997) The
Policy
Process: A Reader (2nd Edition). London: Prentice Hall, pp. 30-40.
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Dye, T.R. (2002) Understanding Public Policy. Tenth Edition. Delhi: Pearson, pp.1-9, 11-
31, 32-56
Sapru, R.K. (1996) Public Policy: Formulation, Implementation and Evaluation. New
Delhi:
Sterling Publishers, pp. 26-46.
Dunleavy, P. and O’Leary, B. (1987) Theories of the State. London: Routledge.
Simmie, J. & King, R. (eds.) (1990) The State in Action: Public Policy and Politics.
London: Printer Publication, pp.3-21 and 171-184.
Agnihotri, V.K. Public Policy Analysis and Design. New Delhi: Concept Publishing
Company, 1995, p-177.
Bidyut, C. and C. Prakash. Public Policy- concept, theory and practice. New Delhi: Sage
Publications, 2016.
Skocpol, T. et al (eds.) (1985) Bringing the State Back In. Cambridge: Cambridge
University Press, pp. 3-43 and 343-366.
Hogwood, B.W. and L.A. Gunn, 1984, Policy Analysis for the Real World, Oxford
University Press, London.
Parsons, W, 1995, Public Policy: An Introduction to the Theory and Practice of Policy
Analysis, Edward Elgar Cheltenham.
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Unit-3
Political Economy and Policy: Interest Groups and Social Movements

Ms. Revathy V Menon
3. Structure
3.1. Introduction
3.2. Public Policy through the Lens of Political Economy
3.3. Interest Groups and Public Policy
3.3.1 Interest Group Influence on Policy-Making
3.3.2 The Strategy and Tactics of Various Interest Groups
3.3.3 The Advantages and Disadvantages of Interest Group Influence
3.3.4 Concerns About Political Influence of Interest Groups and Wealth
3.4. Role of Social Movement in Public Policy
3.4.1 Social Movement
3.4.2 Stages of Social Movements
3.4.3 Relation between social movements and public policies
3.4.4 Effects of Social Movements in Public Policies
3.5. Conclusion
3.6. References
3.1 Introduction
Many policy analysts, academicians, innovators, development practitioners, and individuals
are dissatisfied with the state’s or its agencies’ inability to accomplish what they believe they
should do. Policy formulation and service delivery are the two key areas where states are
perceived to fail. This unit examines the significance of public policy in political economy.
Also, it presents the fundamentals of political economy analysis, which investigates the
connection of political and economic processes inside a society and can give insight on why
states behave as they do (and why they formulate the policies that they do). Political economy
analysis enables us to comprehend why governments, in particular, behave the way they do.
It investigates the connection of political and economic processes inside a society, looking at
how policymakers gain power and the ramifications for subsequent policymaking. In turn,
economic results impact the relative wealth of various groups, which has consequences for
the future allocation of political power and policy direction. The unit culminates with a look
at how interest groups and social movements have an impact over the policy process.
3.2. Public Policy through the Lens of Political Economy
In the formulation and execution of public policy, conflicts between the public interest and
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special interests are unavoidable. Some public policies seek to serve the public interest by
aiming to rectify market flaws, reduce transaction costs, effectively control externalities, or
boost productivity. Other public policies are the product of manipulation by powerful
organizations that are deliberately pursuing their own self-interest. Regardless, conceptual
formulations that seek to explain or dictate public policy by stressing only one sort of interest
will fail. Frameworks that fail to account for the involvement of special interest groups have
minimal explanatory value. Models that assume the government has no autonomy or interest
in the size of the economic pie will have major limits as an explanatory, predictive, or
prescriptive tool.
Political and economic factors are at work in any public policy-making process in
resolving the strategic interconnections among the diverse interests. Figure 1 depicts a
schematic illustration of the policy-making process that incorporates these influences.
Historically, political science has been the realm of the right-hand box, whereas economics
has been the domain of the left-hand box. Particular governance structures determine the
constitutional structure at the top of the right box, setting voting procedures, the rule of law,
property rights, laws controlling exchange, and, more broadly, the norms by which rules are
established. The form and extent of political feedback mechanisms from groups affected by
public policy are also determined by governance systems. Any causal examination of
constitutional norms, in its broadest sense, analyses the consequences of alternative legal,
regulatory, and institutional frameworks, as well as varying degrees of political, civil, and
economic freedom. In other words, governance institutions define the limits of the political-
economic relationship. Over the last decade, economists have made major theoretical and
empirical advances in studying the relationship between governance systems, political
economics, and policy selection.
Figure 1
Political economic analysis aims to understand how public policies are chosen and
implemented. This link in the policy-making process endogenizes instrument settings as a
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result of governmental bureaucracy and stakeholder activity. The unit of study is interest
groups as agents representing stakeholders rather than individuals. Interest groups compete at
various stages of the policy-making process by investing time, energy, and money in the
creation of pressure to affect both the design and tactical execution of policies.
The box at the bottom of Figure 1 acknowledges that public policy implementation can
have both intentional and unforeseen implications. The possible strategic behaviour of both
public and private sector agents and their representatives becomes crucial for this
relationship. To isolate the incentives embedded in certain policy regimes, modern economics
has employed the ideas of asymmetric information, incentive compatibility, participation
restrictions, and credible obligations. Unintended outcomes are frequently the result of
concealed acts or knowledge. Concealed acts are commonly classified as moral hazard issues,
whereas hidden knowledge is classified as adverse selection or signalling issues.
Following the creation and/or implementation of policies, the process of incidence
begins with the determination of winners and losers. Some groups or segments of the market
may bear the burden of government policies, while others may benefit. The real impact of
every public policy that is formulated and implemented is determined by individual agent
incentives and, ultimately, market structure. Economic implications are often measured in
terms of economic growth or the size and distribution of the economic pie among diverse
stakeholders. These economic repercussions result in a distribution of political power, which
is depicted in the top box of Figure 1.
The relationships indicated in Figure 1 are compartmentalised in most of the scholarly
literature. This segmentation has enabled at least four analytical dimensions of public policy
to be identified based on their imposed assumptions or maintained hypotheses. Until recently,
the great bulk of public policy analysis was centred on the incidence analytical dimension
depicted in the left box of Figure 1. The influence of present policies and/or the consequences
of alternative policy instruments are assessed for this dimension. The maintained hypotheses
enforced in this evaluation frequently include flawless execution, no feedback effects from
interest group or coalition building, and a certain governance structure. Since the traditional
standard for every executed public policy is a perfectly competitive partial or general
equilibrium market structure, any public policy is frequently regarded as a failure of
government.
The second analytical dimension is often found at the policy implementation link in
Figure 1. The pristine implementation assumption is modified for this dimension while still
retaining no feedback effects from interest group or coalition formation and a particular
governance structure. This usually entails exercises in mechanism design to isolate the
impacts of asymmetric information, imbalance of incentives, and structured signal
interpretation. This analytical feature focuses on incentive effects, possible strategic conduct
on the part of private sector and government actors, and the credibility of long-term public
programmes.
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Modern political economy is a third analytical dimension that takes several forms. All of
these formulations, however, loosen the assumption of no feedback effects from the
establishment of an interest group or coalition, but often enforce a certain governance
structure. This analytical dimension’s intrinsic relevance is that it officially recognises that
groups and agents affected by public policies are not passive and may pursue tactics to
influence and modify policy selection and execution.
A fourth analytical feature that has recently gained popularity focuses on governance
structures that define the bounds of discussions and bargaining between stakeholders and
governmental agencies. This analytical dimension, in its most general version, relaxes the
assumptions of faultless execution, no feedback effects among interest groups or coalition
building, and given governance arrangements. This dimension, as shown in Figure 1, is
capable of examining how the allocation of political power leads to various governance
forms. A misallocation of political power is likely to result in governance structure
adjustments. This causal relationship serves as the foundation for conceptualising the
negotiations and concessions made to construct governance structures acceptable to those
with the most potential to oppose such structural reforms, as well as others with an interest in
the result. Formally, this analytical dimension assesses various collective choice or
constitutional norms regulating access to the policy-making process, the formation of
acceptable coalitions, the range of problems over which tradeoffs are organised, and the
definition of default alternatives.
Power is allocated between the government and other interest groups in the articulation
of the political economic lens, and a maldistribution of power can dull any and all efforts at
better efficiency. According to Williamson (1975), all collective action groups, whether
government or non-government, have a “central” that coordinates group actions and
peripheral participants. Individual well-being is affected by the center’s decisions, therefore
the objective functions of the peripheral players are described in terms of the center’s choices
to some extent. Individual peripheral participants will naturally try to sway the center’s
decisions. The centre also comprises of individuals with their own private interests, and while
it is not unreasonable to expect central decision makers to completely absorb the group’s
aims, it would be impossible to disregard their own interests. As a result, the centre is
vulnerable to attempts to sway its decisions by peripheral participants who have the authority
to reward or punish members of the core. In this context, the idea of price is not clearly
defined, and unlike the non-personal Walrasian transaction, agents’ identities do matter in
“political markets.”
The early Nobel Prize-winning work on bargaining by Nash (1950, 1953) and Harsanyi
(1963, 1977) laid the groundwork for this political-economic paradigm. Bargaining power is
a key idea in these formulations. According to Dahl (1957), A has power over B to the extent
that “he can induce B to do something that B would not otherwise do.” However, as Harsanyi
(1963, 1977) has stressed, power interactions do not have to be unilateral; they can also be
bilateral or reciprocal. Harsanyi leverages these concepts to explain the incentives for
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coalition formation as well as, indirectly, the inability of coalitions to exert power.
The heart of the policy-making process comprises of policymakers who are
constitutionally allowed to make policy decisions. In some cases, a polycentric organisation
with many centres (e.g., federal, state, and municipal) is mandated by the Constitution. A
hierarchy, in any case, organises the connection between the authoritarian centre and the
periphery peripheral actors or interest groups. These interest groups can be of several types,
including: organised structures capable of rallying group members into coordinated joint
action (Olson 1965); unorganised but responsive interest groups; groups that share common
interests but are unable to evolve any machinery for deliberate political action; politically
inert interest groups; or groups that not only lack any mechanism for coordinated policy
action but also have members who are unresponsive to policy choices.
The interaction between organised interest groups and policy-making institutions
establishes a reciprocal power system in which each party bargains using its own methods of
influence. For this procedure, a political-economic equilibrium with a postulated cooperative
result specified by group rationality may be developed. The political-economic equilibrium
relates to a cooperative solution of a (g + n) person bargaining game in applications involving
policy-making centres and n organised interest groups. New developments in political
economics are increasingly focusing on the distribution of political power, the function of
governance structures, coalition building, and the mechanism design difficulties that arise
during the execution of public programmes.
3.3 Interest Groups and Public Policy
Interest groups are organised groups whose members have common ideas and aims and
actively carry out programmes to influence public institutions, personalities, and policies.
These organisations are not political parties in the sense that they seek to control and manage
the government. These are primarily focused with influencing the formulation of public
policies that directly or indirectly affect their interests. The size, funding, influence, and aims
of such groups vary widely. Their methods of operation, on the other hand, are extremely
similar, and include lobbying, electoral campaigns, and propaganda to influence public
opinion and political institutions. Interest groups aim to influence legislative, executive, and
judicial decisions.
The interest group conceptual theory is founded on the psychological assumption of
accomplishing self-interests and the goals of a certain segment of society. Individuals in
society join together readily when they have shared self-interests. Individuals in the political
system, particularly in a representative democracy, have the freedom to join any political
party whose doctrine they find most appealing. Normally, a person is unable to exercise
actual influence on political party leaders in order for them to adopt a policy that is
favourable to his interests. A party cannot serve the interests of a single individual or group
of people since it has its own platform and is broadly based. Furthermore, those who formally
join a party are required to adhere to the party’s directions and ideals. As a result, they are
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little more than ‘sticks inside the party framework.’ As a result, individuals band together and
join interest groups in order to exercise influence over governmental policy-making
institutions in order to defend and advance their common interests and opinions.
Interest groups are alliances of persons or organisations that aim to influence public
policy in their favour by lobbying members of the government on the basis of one or more
shared concerns. Influence by interest groups on policymaking is not a corrupt or unlawful
action in and of itself, but rather a necessary part of the decision-making process. However,
excessive and opaque interest group influence may result in administrative corruption, undue
influence, and state capture, favouring certain interest groups at the expense of the general
interest. Transparency is thus essential to ensuring that policymakers do not favour certain
interest groups. Regulations on lobbying, conflict of interest, asset disclosure, competition,
and freedom of information are just a few of the many policies that governments throughout
the world have enacted to improve openness and accountability in decision making.
Interest groups’ actions offer a link between public policy and environmental variables,
and vice versa. The socioeconomic mix of a society is reflected in the organisation of interest
groups at work in a particular situation. Thomas R. Dye claims that “A variety of separate
interest groupings emerges from modern metropolitan institutional civilizations. Because of
the variety and diversity, it is less probable that any single interest group will be able to
decide policy in all fields. Poor, rural, agricultural cultures, on the other hand, create fewer
interest groups, but these interest groups have a greater potential to influence policy-making
in developing economies.” Interest groups, it goes without saying, have a significant impact
on public policy. These groups exert influence on lawmakers in order for them to establish
policies that benefit them the greatest. In comparison to modern and established nations,
emerging and developing countries have fewer interest groups. In these regimes, interest
groups wield control over public policy mostly through personal ties and ‘overlapping elites.’
These groups’ data is rarely realistic, their goals are confined and localised, and they are less
farsighted than interest groups in industrialised nations.
Whatever the polity’s character—totalitarian, authoritarian, or democratic—the effect of
the interest group on public policy cannot be overstated. The activities of these groups are
centred on a restricted set of values, goals, and objectives. The systems collect and
disseminate data to policymakers to back up their claims. If policymakers are satisfied of the
facts offered, they will respond based on them. In India, like in most other Third World
countries, the government plays an essential role in social and economic development. As a
result, public policy has the greatest influence on the formulation of development objectives
and priorities.
3.3.1 Interest Group Influence on Policy-Making
Interest groups or special interest groups are any grouping of individuals or organisations that
aim to influence public policy in their favour by lobbying members of the government on the
basis of one or more common concerns.
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Interest groups may be divided into three types based on their motivation:
(i) economic, which includes individual firms and corporate organisations;
(ii) professional, which includes professional groups such as labour unions and farmers;
and
(iii) public interest, which includes human rights organisations and environmental
organisations, among others.
3.3.2 The Strategy and Tactics of Various Interest Groups
Interest groups may seek to influence legislative action directly or indirectly through
consultants/lawyers (so-called professional lobbyists). These attempts to influence policy-
making can take many forms, including direct engagement with government officials,
participation in public hearings, producing reports to members of the government on specific
policy concerns, and media commentary.
3.3.3 The Advantages and Disadvantages of Interest Group Influence
The impact of interest groups on policymaking is not a corrupt or immoral activity in and of
itself, but rather a critical component of the decision-making process. However, the benefits
and drawbacks of interest group influence will vary depending on how much power such
organisations have and how power is divided among them. A corporate group’s excessive
power, for example, can lead to undue influence or even state capture. In this scenario, the
interaction between policymakers and interest groups must tread a narrow line between
participatory democracy and excessive influence.
Advantages:
1. Possible Benefits
There is no evidence of the real benefits that interest groups’ influence on decision making
might provide. Interest groups, in general, may help policymakers by giving useful
information and insight data on specific subjects. They also represent interests that may be
adversely and unwillingly impacted by ill-considered public policy. Furthermore, because
such organisations maintain track of legislative and regulatory procedures, they play a vital
role in holding the government responsible. Furthermore, Campos and Giovannoni (2008)
observed that in transition nations, interest group influence through lobbying is an alternate
tool of political influence to corruption. In this context, their conclusions are that lobbying, if
properly controlled, is a far more effective weapon for exerting political influence than
corruption, and that lobbying is also a significantly stronger explanatory factor for corporate
performance than corruption. According to studies, the scope of lobbying grows with
revenue, and corporations that join to a lobby organisation are substantially less likely to pay
bribes. Firms in politically unstable nations, on the other hand, are more inclined to bribe and
less likely to join a lobbying organisation.
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2. Declaration of Assets
Many nations have implemented asset disclosure regimes in order to improve openness and
honesty, as well as citizens’ faith in government. They monitor the wealth fluctuations of
individual politicians and civil workers in order to prevent conflicts of interest among public
officials and members of the government, as well as to avoid illicit enrichment or other
unlawful acts.
3. Transparency In Decision-Making Processes and Information Access
The prominence of an issue may also affect interest group influence — ‘the more attention
the public gives to a given choice, the more difficult it should be for a special interest group
to influence the outcome.’ Governments should encourage citizen engagement in this
environment by enabling (or making mandatory) open hearings on policies and consultative
decision-making procedures. Other measures that may improve transparency and
accountability in policymaking and aid in the identification of any suspicious relationship
between special interest groups and politicians include: freedom of information legislation to
allow access to government documents related to the policy-making process; e-government
mechanisms to encourage consultations and public comment on draught laws and regulations;
and public disclosure of Parliamentary votes, among others.
4. Encouraging Competition and Enhancing Corporate Governance
Concentration of capital may inevitably lead to concentration of political control. As a result,
expanding competition, particularly in industries controlled by monopolies or big
conglomerates, is critical for strengthening competition over policy influence. Measures to
promote competition include, among other things, restructuring key monopolies, removing
entry barriers, eliminating anti-competitive advantages, improving the investment climate,
promoting various forms of interest representation among existing firms, and strengthening
anti-monopoly agencies.
The Disadvantages:
1. Excessive Influence and State Capture
Interest group influence may lead to administrative bribery, political corruption, excessive
influence, and state capture if it is opaque and disproportionate. Unlike bribery and political
corruption, which are more evident kinds of corruption, undue influence is more subtle and
not always illegal, which means that interest groups can exert influence on policy-making
without resorting to unlawful payments. Interest groups will strive to build a “feeling of
reciprocity” with a public figure in this setting, for example, by lawfully making campaign
donations, holding receptions, and offering research, among other favours.
Undue influence can also be gained by promising high-paying future posts in the private
sector in exchange for assistance in crafting legislation, or by putting former ministers and
legislators in lobbying companies.
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Disproportionate and unregulated influence by interest groups may also result in state
capture, which occurs when firms shape and influence the formulation of laws and
regulations through illicit private payments to public officials and politicians, such as illicit
contributions paid by private interests to political parties and election campaigns, or the sale
of parliamentary votes on laws to private interests, among other things. Examples from
transition economies indicate that a firm’s ownership and origin may impact how it attempts
to wield power. State-owned or privatised firms, for example, are expected to maintain
significant access to and relationships with public officials, boosting their influence on the
state without resorting to unlawful payments. New businesses, on the other hand, are less
likely to be influential but more likely to rely on state capture or administrative corruption to
compensate for their lack of power.
2. Addressing the Influence of Interest Groups
As previously stated, interest group influence on policymaking has the potential to benefit
society provided corporate undue influence is avoided and openness and accountability are
improved. In this setting, full openness is necessary to avoid the detrimental effects of interest
group influence on policy actions. As a result, a diverse set of rules should be enacted,
depending on the country’s political context and stage of development. These include
lobbying registration and disclosure, conflict of interest prevention, revolving door
regulation, comprehensive asset and interest disclosure by public officials, antitrust
restrictions, and freedom of information legislation.
3. Regulation of Lobbying
Lobbying registries are essential for making interest group actions more open and
accountable. Lobbyists’ identities, clients, issue areas, goals, strategies, and financial
information should ideally be made public through registration systems. Effective
implementation will also need strong supervision and enforcement measures.
4. Conflict of Interest
A conflict of interest is described as “a circumstance in which an individual or the institution
for which they work, whether a government, corporation, media outlet, or civil society
organisation, is forced to choose between the obligations and expectations of their position
and their own private interests.” Companies, for example, may face allegations of
inappropriate influence if they hire lawmakers as consultants or have them on their boards.
As a result, a conflict of interest might occur “when an individual with a formal obligation to
serve the public participates in an activity that jeopardises his or her professional judgement,
objectivity, and independence.”
Preventing conflicts of interest is especially vital in this context for increasing openness
and accountability in public decision making. Laws, standards of conduct, and internal rules
or management guidelines are all examples of regulations. They should also include post-
public employment and impose a mandated “cooling-off” period to avoid the revolving door,
as businesses and their consultants frequently use former public officials for lobbying
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reasons. There are three types of conflict-of-interest regulation: activity prohibitions,

statements of interests, and removal from decision-making processes.
3.3.4 Concerns about Political Influence of Interest Groups and Wealth
Many academics and public intellectuals have expressed worry about the power of special
interests and money in policymaking. There are, of course, legislative laws governing interest
groups and the use of wealth in politics, but the number of interest groups continues to
expand, and wealth is utilised in a variety of ways, both visible and covert. The demands on
government for continuous improvement in the quality of life, as well as the need to compete
with other nations for economic, cultural, and military superiority, are so great that
government expands to the point where citizens can no longer relate to it, enormous budget
deficits are created, and government is no longer capable of solving problems or serving the
national interest.
Lowi (1979) was one of the first scholars to argue that the issues with pluralism are not a
“natural” outcome of constitutional arrangements, but are instead the result of the shape that
public policy has assumed in the United States. Lowi was particularly critical of the fact that
most policies (with the exception of some forms of regulatory policy) are characterised by a
specific type of policy design in which statutes are vague, lack transparency, delegate the
majority of authority to agencies or local governments, and grant lower-level implementing
agencies broad discretion in meeting the needs and demands of various interest groups,
neither the Act nor the implementation specifications include clear legal criteria or
guidelines. The result is “interest group liberalism,” which, according to Lowi, undermines
government by precluding planning (instead relying on bargaining); undermines public
morality and citizenship by allowing self-seeking interests of organised groups to dominate
the policy process; is unable to pursue justice because justice is not at the bargaining table
and is not even considered; and teaches incorrect lessons about citizenship and democracy.
Lowi’s approach centred on “juridical” democracy, in which statutes contain explicit,
detailed legal standards that allow citizens to know exactly what is being done, to whom,
why, and with what resources. This form of law creates a clear point of dispute for those who
oppose it, which leads to good policy change (if necessary).
3.4 Role of Social Movement in Public Policy
Many social movements throughout India’s history have had a significant impact on the
society in which they happened. There have been numerous social movements that have been
both successful and unsuccessful. These movements’ ideologies have varied widely; some
have been revolutionary in their agenda, others have recommended reforms to the existing
system, and still others have been struggling for a change and have worked to oppose laws
and changes in society that appear difficult for the public to accept. The scope of social
movements has also expanded.
Social movements are ubiquitous and may be found in every society, past or present.
Their nature, extent, and frequency change with time. During the early stages of political
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development, social movements formed the state, its roles and obligations, and held the state
accountable. They also played a major role in the administration and distribution of power in
numerous sectors of society. They have played a significant part in contemporary times in
questioning the government and authority, foreign norms, and totalitarian regimes. It does not
really matter if it’s the French and Russian revolutions, the Indian independence struggle, or
other peasant uprisings; they all have a profound and intense influence on our lives. From the
German movement to the Hindutva movement in India and the Tamilian struggle in Sri
Lanka, movements have not only changed political systems but have also encouraged
individuals to come up and demand their rights. Their legacies have an impact on us all in
many ways that will last for a long time.
3.4.1 Social Movement
A social movement is a semi - structured or unstructured but persistent campaign in support
of a social objective and aim, often to execute or prevent a change in society’s structure or
values. Although social movements vary in scale, they are all basically collaborative in
nature. That is, they are the outcome of the more or less uninvited and unsolicited gathering
of individuals whose connections aren’t defined by laws and processes but who just share a
same societal viewpoint.
Social movements are broad associations or unions of individuals who are linked by a
common interest in social change. Social movements can be organised to support a specific
social change, but they can also be organised to resist a social change that is being
implemented by another group. These movements do not have to be formalised in order to be
labelled social movements. Different organisations might work together for shared goals
while still being labelled a social movement. Three important elements of a social movement.
They are:
a) collective action;
b) social change and
c) common purpose.
3.4.2 Stages of Social Movements
A social movement goes through four stages. Emergence, coalescence or amalgamation,
bureaucratization, and decline are the four stages of movement evolution. The final step, the
decline stage, can be caused by a variety of factors, including repression, conversion, success,
failure, and mainstreaming. Herbert Blumer, who developed and analysed four stages of
social movement lifecycles, was one of the early researchers to evaluate and gauge movement
processes. He identified four stages: “social ferment,” “public enthusiasm,” “formalisation,”
and “institutionalisation.” Scholars have refined and renamed these four stages since his early
work, but the core concepts have stayed pretty similar.
3.4.3 Relation between Social Movements and Public Policies
When we discuss the link between public policy and social movements, we see that it is a
two-way street. Public policies have the potential to spark social movements. Similarly,
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social movements may result in the formation of new governmental policy. However, in
general, social movements originate as a result of changes in governmental policies. The
reason for this is that social groups that believe they will be negatively impacted by changes
in public policy may band together and mobilise in order to voice their demands, perhaps
resulting in the creation of a new social movement. The latter comes to life when official
policies are reshaped in response to the demands of social movements. While the effects of
social movements are seen as generally extrinsic and prohibitive variables in the sphere of
public policy, these influences are regarded as consequences of the social movement process
in the history of social movements.
The primary focus of every government is the provision of economic infrastructure and
products and services, the purpose to settle conflict situations, the protection of natural
resources, the stabilisation of the economy, the promotion of human welfare, and social
justice. These are transformed into public policies, which are developed, executed, and
assessed by the legislative and the administration. The ability of a social movement to modify
or reform any policy in response to its demands is dependent on a variety of internal and
external elements relating to the current social movement. Internal variables primarily include
the social movement’s demands, methods, plans, and organisational structure. The critical
external aspect is the possible reaction of public or private actors willing to sustain present
policies in the face of the given social movement, as well as the “counter-struggle” they will
engage in. As a result, while analysing the influence of a social movement on a public policy,
it is critical to examine the reaction of actors who desire to keep the provided policy in the
same shape that the social movement challenges and aspires to alter. In addition, there are
some other external factors that should be considered.
3.4.4 Effects of Social Movements in Public Policies
Advantages
Article 19(1) of our Indian constitution guarantees every person the right to free speech and
expression, including the right to congregate and demonstrate without the use of force. The
freedom to publicly protest makes the government responsive and accountable. If such is the
case, one is left in the dark about how the current administration avoids difficulties; he can
intentionally hinder any attempt to debate the topic. Government in the past has made it a
practise to make choices in secret, force them on an unprepared populace, and then campaign
to explain its non-transparent midnight judgments when questioned or opposed. As a result,
the freedom to protest provides an excellent opportunity to correct and modify some of those
political failures by shining a focus on the flaws in the policies. Protests raise issues that must
be addressed by raising voices and bringing them to the attention of policymakers. It can
sometimes assist to change policies and lead to the creation of new ones. And, when the
government is preoccupied with other matters and overlooks some things, the disgruntled
people always have their own way out by organising peaceful protests.
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Protests and social movements have been increasingly visible and well-known in recent
decades. There has been a huge rise in the quantity of literature pointing to the linkages
between movements and policy. Nonetheless, researchers believe that there is a lack of
progress, rigorous study, and attention to developing nations in relation to these relationships.
Making policy is always a subject of significance and public welfare, thus it is critical for
the people to accept it and understand why it was created. But, at the same time, policies are
made to feed a country’s democratic needs, such as better economic stability, better foreign
communication, and so, for the common good of the country, a few groups of people may
face some discomfort, but it is expected of them to understand the cause of the policy and
react accordingly. On the other side, the government sometimes fails to grasp the
requirements of the majority and concentrates too much on other elements, resulting in a
greater unsatisfied public, culminating in disorder and unrest.
Simultaneously, there are public demands that arise as a result of recent events that
agitate people and cause them to want urgent remedies, causing them to take to the streets
and demand immediate execution.
Disadvantages
As previously said, while demonstrations play an important role in a country’s policymaking
process, they also have certain negative connotations. There are illegal protests, involving
violence and anarchy. We can now observe that mass movements frequently contain a high
level of media engagement and governmental oversight. This is helpful for certain needs, but
it also serves as a diversion from the more pressing concerns that must be addressed. The
media and the government’s eyes and ears become so preoccupied with the continuous
protest that other critical issues are overshadowed.
In terms of the opposing side, unlawful protests, i.e., riots, have been ineffective for a
long time. Riots may eventually result in the fulfilment of demands, but they are always
accompanied by a loss of resources, whether human or material. Persons get violent and turn
on one other, destroying public buses or trains or even blowing up police stations, and the
number of people dead is uncountable. Not only do protesters lose their lives at times, but so
do ordinary people who have nothing to do with the disturbance.
Aside from that, not only unlawful riots, but even legitimate protests, can lead to
misguided governmental decision-making. So, in our society, there are several groups of
individuals, and policies are adopted and applied differently to various groups of people. As a
result, while the majority of people may not be protesting, the demands of the minority may
be met, which is ultimately a misguided public opinion.
To summarise, the adoption of public policy techniques in conjunction with social
movement approaches is beneficial in understanding the role of social movements in the
formulation, implementation, and modification of public policies. The social movement
methods will serve as a guiding light for the “policy process,” particularly in regard to topics
that are highlighted in public, and social movement approaches will provide crucial
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indications about how and to what degree social movements might affect the policy process.
Public policy examines how and by whom a public policy is created in light of which criteria,
as well as how it is executed. The study of social movements attempts to comprehend how
social movements form as a result of the effect of public policies and public demands in
particular policies. What effect they have on the policy process and its repercussions in our
society today. Regardless of the benefits or drawbacks, there is always an influence of
demonstrations and public reaction to policies in the creation. Again, because policies are
ultimately for the benefit of the people, they have the freedom to express their agreement and
dissatisfaction with them and have a platform to advocate for their desires. Thus, combining
both sources will aid in understanding how social movements impact the public policy
process and will aid in the implementation of better policies in society.
3.5. Conclusion
Members of a group’s similarities and differences in terms of common interests or shared
values, or both, provide them with a solid foundation for working together, and as they
expand, they become organised and gain access to decisional authority in government. Their
amount of influence in public policymaking is determined by their level of organisation and
mobilisation. In India’s system of representative democracy, the political economy, as well as
interest groups and social movements, influence the political process in a variety of ways,
including funding election expenses for parties, mobilising voter support, interfering in policy
formulation, implementation, and evaluation, and so on.
3.6. References
Campos, N. F. (2009). In pursuit of policy influence: Can lobbying be a legitimate alternative
to corruption in developing countries?. U4 Brief, 2009(1).
Crozat, M., Hipsher, P. L., Katzenstein, M. F., Keck, M. E., Klandermans, B., Kubik, J., ... &
Sikkink, K. (1997). The social movement society: Contentious politics for a new century.
Rowman & Littlefield Publishers.
Giddens, A. (2013). The third way: The renewal of social democracy. John Wiley & Sons.
Lukes, S. (2004). Power: A radical view. Macmillan International Higher Education.
Lukes, S. (1993). Three distinctive views of power compared. The policy process: A reader,
50-58.
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Unit-4
Models of Public Policy Decision Making in India

Dr. Neelam Jain
4. Structure
4.1 Introduction
4.2 Process Model
4.3 Institutional Model
4.4 Rational Model
4.5 Incremental Model
4.6 Group Model
4.7 Elite Model
4.8 System Model
4.9 Game Theory
4.10 Conclusion
4.11 References
4.1 Introduction
Public policy making process in India, like any other country in the world, has become more
complex and intensive in the recent times. This is a dynamic and ever evolving process where
different actors and institutions are involved. The idea of desirable role of the state in the
society and economy is also changing and along with it changing is the nature of public
policy. Policies are outcome of the complex interactions between prevalent value systems of
governing actors and existence and role of various civil society groups in any specific period.
Public policy is like a strategic framework which the government uses to deliver its
public role. The assessment of public policies and their models are very important to
understand the relationship of the state to its people. Public policies also reflect the prospects
of betterment of society in terms of economic development, social justice and political
empowerment. It also highlights the intention and nature of the government in terms of its
commitment to welfare of all sections of society.
In the next section, we will discuss the various analytical models of public policies which
are prevalent worldwide including India.
Models of Public Policies
4.2 Process Model
Process model attempts to generalise the pattern of political actions or steps which occur
during the different stages of policy making. The main question researched in this model is
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‘what’, ‘when’ and ‘how’ of the policy making than ‘who’ and ‘why’ particular outcomes
occur of policy making. These models are widely used in policy education. The various
stages of process models are:
 Problem Identification: Various groups of the society demand intervention or action
of the government in their interests and the identification of such problem is the first
stage of policy making process.
 Agenda setting: After identification of problem, a particular course of action is
deliberated with the participation of different stakeholders like administrative
officials, media etc.
 Policy formulation: Various stakeholders of policy making develop policy proposals.
 Policy legitimation: Selection of a particular course of action and enactment of the
policy through legislature, executive and administrative system.
 Policy implementation: Execution of the policy through government institutions and
officials.
 Policy Evaluation: The evaluation of the outcome of the policies and its further
implications are analysed not only by the government agencies themselves, by the
media, think tanks, private consultancies, civil society groups etc.
4.3 Institutional Model
This approach highlights the integral relationship between government institutions and public
policies. In the various stages of making and implementing public policy various government
institutions and political representatives like President, the Prime Minister and members of
Parliament, Urban and Rural Government, Judiciary, Bureaucrats and leaders of interest
groups are involved. The main argument of this model is that the public policy is mainly
outcome of the internal efforts of the Government institutions rather than the result of
external pressures and influences. In this regard, the view of Thomas Dye is noteworthy;
“The relationship between public policy and government institutions is highly
interrelated. A policy converts into public policy when it is formulated and
implemented by government institutions.” (Dye 2004)
The Government institutions give the following three distinctive characteristics to public
policy:
a. Legitimacy: Public policies are formulated by the law making agencies and it give it
the legal authority. Citizen’s compliance is sought by making public policies legally
obligatory.
b. Universality: The Government institutions give universal character to public policies
by making it applicable to the entire society.
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c. Coercion: Government can impose legal sanctions against the violations of various
public policy regulations and as such can authoritatively enforce the public policies.
4.4 Rational Model
This model is related to the decision making process of a policy on rational ground. The main
protagonists of this model are Herbert Simon, Yehezkel Dror and Thomas R. Dye. This is an
efficiency maximisation model defined differently as ‘net value achievement’ (Robert
Haveman) ‘maximum social gain’ (Thomas Dye). Thomas Dye says that government should
choose those policies which yield more societal gains than the input costs.
According to Dye maximisation of social gain depends on two conditions:
 Input costs should not exceed the output benefits.
 The policy which gives maximum gain in compare to input costs should be chosen
among alternative policies.
Image source: Dye 2004

Dye equates rationality with efficiency. A rational policy is that policy in which
“The ratio between the value it achieves and the value it sacrifices is positive and
higher than the any other policy alternatives” (Dye: 2004).
In his view, efficiency is not measurable only on monetary terms but involves the calculation
of achievement and sacrifices of political, social and economic values.
In this model, inferences are draws on logical evidences as in form of facts and
information. Objectivity and economy of efforts are sought to be achieved by giving lesser
importance to subjectivity and intuition.
Herbert Simon developed the rational model by separating values from facts and
incorporating new scientific techniques. He argues that rational decision making process
involves three kinds of activities- intelligence activity, design activity and choice activity.
Intelligence activity involves the searching the problem for decision making, design activity
identifies and develops of all possible course of action and choice activity involves the
selecting of one particular course of action.
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He puts forward the concept of ‘bounded rationality’ while stressing the limitations of
individuals and organizations to act in a complete rational manner.
Various steps of Rational Decision Making Models are:
 Framing or identifying the problem is the first step of rational decision-making.
 Establishing the criteria of decision by measuring elements like stakeholders who are
involved, their requirement, preferences and other relevant facts.
 Ordering the various information by assessing their relevant weights.
 Exploring all the policy alternatives that are available.
 Evaluation of all alternatives on various parameters such as feasibility, possible
outcome etc.
 Calculation of the cost-benefit ratio of each policy alternative.
 Selection of the most suitable and efficient policy alternative and state it as decision.
 Implementation of the policy or decision.
 Evaluation of the results of the decision.
Assumptions of the Rational Model of Decision Making
The model assumes that the people choose the best alternative by assuring the minimization
of costs and maximization of benefits among various policy alternatives. As such, this model
is based on certain assumptions. These are as follows:
 Decision makers have the correct knowledge about the problem and value preferences
of the people.
 They have all the related factual information to measure cost- benefit analysis of the
policy alternatives.
 Decision makers have the cognitive ability to process the data and evaluate all
possible combinations against each other.
 They have the logical ability to choose the best possible alternative.
Limitations
Herbert Simon argues that the condition of perfect rationality is not always possible.
According to Simon,
“The Rational-Economic Model (Classical decision theory) assumes the manager
faces a clearly defined problem, he knows all possible action alternatives and their
consequences, and then chooses the optimum solution. Whereas in Administrative
Model (Behavioural), the Behavioural decision theory accepts the notion of bounded
rationality. It assumes the manager acts only in terms of what is perceived about a
given situation, and then chooses a satisfying solution” (Simon 1947)
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His concept of ‘bounded rationality’ provides holistic understanding of how decisions are
taken. Simon argues that decision maker lack the basic cognitive ability and because of many
other limitations like time constraints, lack of information, organizational procedure etc.
decision makers are not able to obtain optimal decisions which can maximise benefits.
In such cases, the decision maker makes ‘good enough’ or most suitable course of action
basing on his/ her rationality. The rationality here implies the acknowledgment of one’s own
limitations than opting for the most suitable possible alternative.
There are many constraints to rational decision making process:
 Accomplishing goals
Rational policy making is a very difficult exercise. It is not necessary that the prime objective
of the policy maker will only to solve the problems in question. Sometimes, the problem
becomes so complex that decision makers focus on the other goals or maximising his/ her
own personal rewards in the form of power, status, money and re-election.
 Securing Optimisation
In the real world situation optimization of policy is not always achieved. Sometimes, for the
interests of public, group or individual interests are taken as of secondary importance. Some
problems like environment degradation incur decisions which may not always cost effective.
The argument that the various stakeholders of the policy making always strive for net balance
of social gain is not true. Policy makers just involve in making progressive policies, they are
not very much bother about finding the best alternative.
 Conflict between Rational Choice and Need of Action
In a society there is no consensus among societal values. Group interests are sometimes
conflictual which make it difficult for policy makers to compare the relative weightage. Most
of the times, the policy makers do not have sufficient time to have such kind of comparison
and thorough analysis. In the emergency situations, the policy makers have to take swift
action which further limits his/ her ability of rational choice. As such there is seen conflict
between rational choice and need of action in such cases.
 Dilemma of political feasibility
Political feasibility means the probability of adopting and implementing a rational decision
by the policy makers. Most of the times, policy makers work as conservative risk takers and
try to avoid a rational decision which may incur political costs. Due to the uncertainty of the
possible outcomes of different policy alternatives, policy makers try to stick to the previous
policies. Elected political representatives often prioritise the goal of holding power than
incurring risks for the sake of rational decision making.
 Difficulty in Cost- Benefit Analysis
The cost-benefit analysis of policy alternatives is particularly difficult when it involves
diverse social, economic and cultural value system. Apart from these, policy makers may face
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personal inhibitions or lack of capabilities for such a complex exercise. All the relevant
information about the policy alternatives is not only time consuming but many a times, very
complicated exercise. And it is also not always possible to make accurate analysis of
imminent gains of various policy alternatives.
 Nature and Environment of Bureaucracy
Nature and environment of the bureaucracies may also create obstacles in rational decision
making. If there is no coordination among the different compartments of bureaucracies which
are involved in analysing relevant information for decision making, it limits the probability of
rational decision. Besides, fragmentation of authority, conflicting value system, personal
capacity all effect the nature of decision.
In view of such limitations, Yehezkel Dror wants policy analyst to broaden their use of
extra rational information including intuition and exceptional leadership with acute
perception of social reality.
Herbert Simon’s idea of ‘bounded rationality’ is the principle of satisficing which in turn
combination of two words: satisfy and suffice. It is the realistic approach to seek what is
‘good enough’, what is satisfactory, fulfilling minimum threshold and acceptable in the
practical world. He applies the concept to the individual and organizational decisions. Here,
the decision- maker works on simplified version of the problem with only that much of
information which they consider adequate. They do not indulge in endless search for perfect
option rather they opt satisficing option.
4.5 Incremental Model
The main advocate of this model is Charles E. Lindblom as discussed in his book ‘Policy
Making Process’. This model while criticising the rational decision making approach argues
that public policy is a continuation of previous government activities with only incremental
modification.
According to Lindblom, policy makers do not annually review the whole range of
existing and proposed policies because of the constraints of time, intelligence and cost it
involves. New policies are introduced only at smaller level for the first time than it is
subsequently developed by the successive governments. Policy makers are more likely to
legitimise the previous policies than bringing about radically new policies because of
uncertainty involved in the latter. This approach is also politically expedient to avoid
conflicts among different interest groups. Modification of existing policies will fulfil the
particular demands and maintain stability of the political system. As such the incremental
approach which he considered as the branch method of decision making involves a process of
‘continually building out from the current situation, step by step and by small degrees’ as
different from the root approach of rational decision making,
This approach is one of the most popular approaches easily adopted by the policy
makers. In the absence of any agreed upon societal goals or values, it is easier for the
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government to continue existing programmes rather than engaging in overall policy planning
towards specific societal goals.
In his later writings, Lindblom incorporates the critique of his theory of incremental
pluralism while accepting that models based on pluralistic decision making is biased towards
powerful individuals and interest groups. He made a distinction between incrementalism as a
pattern and incrementalism as a policy analysis. In his article “Still Muddling, Not yet
through” (1979), Lindblom makes a case for analytical incrementalism as a method of
securing power in the pluralistic society.
In this work, he discusses three main forms to incremental analysis which are as follows:
I. Simple Incremental Analysis:
In this form of analysis, only those policy alternatives which are marginally different from
the existing policies are discussed.
II. Strategic Analysis
There are many constraints in complete analysis of policy alternatives and as such many
methods are used to make better choices. These are operation research, trial and error
learning, and system analysis, management by objectives and programme evaluation and
review techniques.
III. Disjointed Incrementalism:
In this analytical strategy, six methods are followed for simplification of problems.
 Restraining the analysis for a few familiar alternatives,
 Interlinking values and policy goals with empirical analysis of problems,
 Directing attention to the removal of problems than achieving of goals,
 Bid-and-error learning,
 Evaluating a restricted number of options and their outcomes,
 Dividing the analytical work to many partisan participants in policy making.
The notion of disjointed incrementalism was introduced by Lindbolm and Davis Braybrooke
in their work ‘A Strategy of Decision’ (1963).
4.6 Group Theory
Group theory view public policy as the equilibrium reached among the interests of different
groups. It gives an account of the influential role of the groups made of common interests of
individuals.
Earl Latham states,
“What may be called public policy is the equilibrium reached in this ‘group’
struggling at any given moment and it represents a balance which the contending
factions or groups constantly strive to weight in their favour.”
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Groups work as link between individuals and government. These groups struggle for their
conflicting interests. The political system try to manage those conflicts by accommodative
policies. However, what is seen most of the time is that actual policy tends to incline towards
the groups that are gaining in influence. Thus, public policy at any given time tend to reflect
the interests of the dominant groups. The group strength may derive from various aspects
such as organization capacity, networking links, numerical superiority etc.

By stressing on the role of groups this theory underestimates the role of ideas and institutions
and independent role of public officials in public policy making.
4.7 Elite Model
Elite Theory highlights the importance and influence of few individuals in contrast to the
general masses in different aspects of life. The power of the few can be based of various
factors. The ideas of elitism was first expressed by three Italian scholars Vilfredo Pareto,
Gaetano Mosca and Robert Michels. Vilfredo Pareto discussed the intellectual superiority of
two types of elites; governing and non-governing. Similarly, Gaetano Mosca says that
because of their intellectual and moral characteristics the organised minority form the
political class, whereas the majority are unorganised. Robert Michels also highlights the fact
that all social and political organizations are run by the few individuals. This elitist theory
was further developed into different areas by different scholars. One of the most influential
works in this regard is the book Power Elite published in 1956 by C. Wright Mills. Mill’s
work presents a sociological perspective to the systems of power by pointing out the three
distinguishable power building body of political, economic and military in the United States.
In regards of public policy making, elitist theory highlights the importance of ruling
elites in making public policies. Public policies reflect the interests, preferences and values of
governing elite which are carried forward by the bureaucrats. Public policies are made for the
masses, but masses have very limited or no influence in policy formulation. The policy
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problem is shaped by the governing elites. Competition to influence public policy is mainly
between those who are holding political power and those who want to hold public power. The
huge masses are unaware or ill-informed and their opinion about the policy problem is shaped
by the elites. Thus this theory point outs the downward flow of public policies from elites to
masses.
According to Dye,
“Public policy shows elite values, serves elite ends, and is a product of the elite”. (Dye 2004)

Thomas Dye discusses the following main arguments of elite theory.
1. In regards of policy making, masses have very limited influence. The powerful
minority and the powerless majority divides the society where the powerful minority
allocates values for society.
2. The power of the elites mainly derive from their superior socio-economic status.
3. The elite class is not static, there is continuous but slow movement of non -elites to
the elite position. Mostly, those non elites who supported the basic elite consensus are
slowly admit to the governing circles.
4. Elite preferences rather than the public demand is the basic of public policies.
4.8 System Model
The main theorist of System model is David Easton who applies this model to public policy
process. Public policy is viewed as a response of a political system to the demands coming
from the environment. Political system consists of interrelated institutions and activities in
society that make binding decisions in a society.
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Demands and support flow is considered as inputs to political system. Demands are the
claims made by individuals and groups for fulfilling their interests in the form of public
policies or actions. When such actions and policies are acceptable to the individuals and
groups they support the system. David Easton defines environment as social, economic and
all other conditions and events external to the political system. Public policy here refers to the
administrative or authoritative allocation of values. The concept of feedback in this model
indicates that the subsequent impact that alters environment and the demands generated
therein. This theory points out the unending or cyclical process of policy making since each
policy generate new demands which lead to further policy output. Thus, the policy making
process has been regarded as a ‘black box’ which converts the demands of society into
policies.
However, this model is regarded as highly generalised model and mainly used to have
basic understanding of public policy process.
4.9 Game Theory
Game theory of public policy making is about taking decisions in situations of
interdependence of the more than one player. Each individual player has its own goals and
interests which may be conflictual with the goals of other’s. One’s decision or action affects
the other and in this situation, the ‘game’ is how to achieve maximum of one’s objectives.
Thus, this theory highlights the point that decision makers are involved in a situation of
interdependence. All would have to make their independent choice, but the outcome would
be conditioned by the choices made by each actor. This model is applicable in situations
where the best choice is not defined and the ‘best’ course of action depends upon actions of
others. Hence, this is a theory of rational decision making in an interdependent and often
conflictual situation.
4.10 Conclusion
From the discussion of various models in the preceding sections, we can conclude that each
model has its own advantages and disadvantages. Each mode highlights specific aspect of
public policy process. As such, it is very difficult to assert which model better reflects the
policy making process in independent India. It is difficult to claim the existence of a specific
model which applicable to policy making process throughout this period. As for example, in
terms of economic policies we can say that in the last two decades the different political
regimes have followed the incremental model in response to the forces of globalization. But
in terms of foreign policies, the game theory better explains the nature of a specific decision
as a response to the changing nature of foreign policies of other countries in an
interdependent political environment. The bargaining capacity of different sections of society
represented by different organizations and political parties can determine how much their
interests will be reflected in the policies of the current government. This in turn, also depends
how much accommodative and independent are different political institutions and how is
general political environment of the state.
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4.11 References
Anyebe, Adam A (2017) An Overview of Approaches to the Study of Public Policy.
International Journal of Political Science (IJPS) Volume 4, Issue 1, January 2017, PP 08-17.
Anderson, J.E. (1997). Public Policy-Making: An Introduction, Boston: Houghton Miffilin
Company.
Chakravarty, B. and Chand P. (2012) Public Administration in a Globalizing World: Theories
and Practices, New Delhi: Sage Publications.
Dye, T. R. (2004). Understanding Public Policy, (3rd Edition), New Delhi: Pearson
Education.
Kingdon, J. W. (2003). Agendas, Alternatives, and Public Policies, 2nd Edition, New York:
Longman.
Kraft, E. M., and Furlong, S. R. (2004). Public Policy: Politics, Analysis and Alternatives,
Washington D.C.: CQ Press.
Lindbolm, C. E. (1979). Still Muddling, Not Yet Through, 39 (6), pp. 517-526, Wiley.
Lindbolm, C. E. and Braybrooke, D. (1970). A Strategy of Decision: Policy Evaluation as a
Social Process, Macmillan.
Mills, C. W. (1956). The Power Elite, United States: New Delhi.
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Unit-5
Ideology and Policy: Nehruvian Vision, Economic Liberalization and
Recent Developments
Priya Dahiya & Rinki
5. Structure
5.1 Introduction
5.3 Independence and Challenges
5.4 Nehruvian State –Directed Model
5.5 Failure of State led Model of Development
5.6 Economic Liberalization Model
5.7 New Economic Policy 1991
5.8 Issue of Contention
5.9 Summary
5.11 References
5.1 Introduction
Ideology is a set of principles, ideas, beliefs or symbols of an institution that explains how
society should work and offer some political and cultural blueprint for a certain social order.
It is commonly felt that political ideology has an important role to play in the determination
of public policies.
In normal parlance, public policy is an important component of the democratic
government, in response to the increasing complexity of the society. It is actually a purposive
course of actions that the government takes up to achieve certain goals and objectives. It can
be stated that any government activity having wider ramifications for the people is considered
a public policy. Every government in the process of delivering goods and services to people
enunciates certain policies in various fields. Such policies have a long life and even if the
governments change, such policies do not change. Keeping this concern as a central point,
this unit primarily deals with the changing trends and models of public policy in the post-
independent India. It also explains the Nehruvian vision, economic liberalization - market-
based model of development and the role of globalization in the policy making process in
India.
After reading this unit, you should be able to:
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 Explain the theoretical and practical understanding about India’s political economy.
 Describe the essence of Nehruvian model of development.
 Analysis of the main characteristics of economic liberalization model.
 Discuss about the shifts in development discourses in India.
 Examine the impact and importance of liberalization, privatization and globalization on
national policy agenda.
5.3 Independence and Challenges
Policy- making is not done in a vacuum. Issues related to policy making are directly
dependent upon the perceptions and vision of the policy makers on development. It has to
take into account the existing socio- political realities of a nation. At the time of
Independence in 1947, India was one of the poorest countries in the world. It was the great
hope and aspiration of the newly independent Indian republic to relieve this crushing burden
of poverty, agriculture and industrial backwardness, lack of capital and technological
backwardness. In order to achieve socio-economic development and global of nation-
building, policy makers adopted and experimented with various models of development.
It is widely acknowledged that the success of the first plan in Soviet Russia during 1928-
33, in sharp contrast to the crisis of the Great Depression in the capitalist world, made the
entire world plan – consciouses. That success led many of the non-socialist nations to take up
planning as a serious measure to develop their economy and to attempt to solve their
economic problems through planned state intervention.
In this background, planning in India was also treated as an economic exercise which
could help maintain the stability of the nation. Although the idea of planning emerged as
central to the Indian nationalist economic thought with M. Visvesvaraya’s report named
“Planned Economy for India” in 1934 –which is claimed as the ‘pioneering effort’- and then
goes through the national planning Committee, formed by the Indian National Congress in
1938 and the ‘Bombay Plan’ of the Indian capitalists in 1944.
Opting for a state- led economic model of development with planning as the prime
mechanism was not a sudden decision. In fact, it was a logical culmination of the informed
principles and deliberations by the political leadership as well as indigenous capitalist bodies
that evolved within the last two decades of colonial rule. Contrary to Mahatma Gandhi’s
explicit opposition to ‘planned development’, Nehru showed ample interest in socialistic
means, including planning and heavy industrialization as essential to make revolutionary
changes in the present economic and social structure of society and to remove gross
inequalities. He acknowledged that planning was to be guided by what he characterized as
‘integrated planning’. Hence, he observed:
The planning commission has performed an essential task; without which it could not
have progressed. We are a federal structure, and it has served to bring the various states
together and have integrated planning. If it had not been there, the central government could
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not have done its job because immediately difficulties would have arisen that the Central
government was encroaching the rights of the States.15
It was almost natural that planning was envisaged as ‘a pre- condition’ and was based on
the assumption that spontaneous development cannot be expected. 16
Thus, the path of development that India adopted after Independence can never be
conceptualized in a straight – forward manner. The preamble to the Constitution of India laid
the foundation of the socialistic pattern of society in which the state remained the most
critical player. Accordingly, the Directive Principles of State Policy (Part IV of the
constitution) emphasize that the goal of the Indian polity is not unbridled laisses faire but a
welfare state where the state has a positive duty to ensure to its citizens social and economic
justice with dignity of the individual consistent with the unity and integrity of the nation.
5.4 Nehruvian State –Directed Model
Independence in 1947 provided the policy makers a chance to translate their ideological
vision into concrete development programmes in which the role of state was hailed as a prime
mover. They opted for centralized planning as the core strategy adopted for the economic
development of the nation. The basic premise was that a faster and sustained socio-economic
development of the people could be brought about only through conscious planning that
aimed at eradicating poverty, illiteracy, unemployment and regional backwardness through
the promotion of assured availability of basic necessities of food, employment, health,
education and other sectors of growth.
At the same time, the practical utility of state planning was also evident in the resource-
starved countries, like India where the state control of economy was needed to regulate the
economic behavior of people and consumption in order to accelerate capital formation and
productive investment, checking unnecessary imports, investing in social and economic
sectors, monopolistic practices, arranging loans from the governmental and private
organizations of the other countries and ensuring that the drive for private profit does not
produce gross inequalities amongst the different sections of the population.17
The new institutional matrix that the state- led development programmes provided
consisted of ‘a regulatory regime’ comprising (a) public sector expansion - The government
directed to investment primarily into key public sector industries with protectionist policies.
Whereas on the other hand, market was assigned a subsidiary or subordinate role in the grand
project of nation building and strengthening economic prosperity of the people, (b)
discretionary controls over markets and private economic activities and (c) stringent foreign
15
Jawaharlal Nehru, “Planning (A press Release),” Hindustan Times, 17 August 1963.)
Gunnar Myrdal, Asian Drama: An Inquiry into the Poverty of Nations, Vol. II (New York: Pantheon, 1968), 739.)
16
17
Gunnar Myrdal, Asian Drama: An Inquiry into the Poverty of Nations, Vol. II (New York: Pantheon, 1968),
739.)
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exchange and import controls. The first two had their roots in the ideology of socialism while
the last one had its roots in economic nationalism. Taken together, they articulated ‘activism
of the newly established nation- state’ to guide the economic system ‘in a desired direction by
means of intentionally planned and rationally coordinated state policies.18
Underlining the ideological commitment of the nation, the Industrial Policy Resolution
(1948), begins by stating that the nation has now set itself to establish a social order where
justice and equality of opportunity shall be secured to all the people. For this purpose, careful
planning and integrated efforts over the whole field of national activity is necessary; and the
government proposes to establish a National Planning Commission to formulate programmes
of development and to secure its execution. In addition, several wide-ranging policies were
initiated, and many statuary agencies came into being for the welfare of the people.
According, the 1948 Industrial Policy Resolution insisted that the state should play an
active role in the development of critical industries, which were divided into four broad
categories, such as (a) industries manufacturing arms and ammunition, production and
control of atomic energy and the ownership and management of railway transport. (b) basic
industries, namely iron, coal and steel, aircraft manufacture, ship building, mineral oils. (c)
the third category included the basic industries like automobiles, tractors, fertilizers, sugar,
paper, cement and cotton. (d) the fourth category included the leftover industries, which were
managed by industrial, private and joint enterprise. This resolution was reiterated in the 1955
Avadi session of the congress by underlining that in view of declared objective being a
socialist society, where the state shall play an important role in planning and development.
The next landmark event confirming the intention of an activist state was the Industrial
Policy Resolution of 1956 that was adopted after the parliament had accepted in December
1954 a socialist pattern of society as the objective of social and economic policy and the
Second Five Year Plan (also known as Mahalanobis Plan) articulated this ideological goal in
formal terms.19
The Mahalanobis strategy of economic development allowed the state to take a leading
role in industrialization and scale up the economy. The principal components of this
development strategy were:
 Restructuring economic dependency on metropolitan capitalism into independent
economic development;
 State emerging as a capitalist, encouraging capitalist developments in the urban sector
and
 Transformation of semi-feudal agriculture to capitalist farming. It was argued, that for
industrialisation to be viable, it needed a supportive agrarian economy and a small-
18
Myrdal, Asian Drama, 709-10.)
19
Tendulkar and Bhavani, Understanding Reforms,24)
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scale industrial base. Therefore, land reform policy was introduced, which abolished
giant landholdings and introduce large-scale cooperative farming.
Nehru insisted that the basic and heavy industries should remain in the public sector for
two reasons: (a) the private sector may not be able to raise adequate resources for these very
capital- intensive industries and even if it managed it would command a monopolistic control
that was deemed detrimental to social welfare and (b) by controlling allocation of output of
basic and heavy industries according to social priorities, it was certain that the government
would be able to channelize private sector growth to fulfill its ideological goal. In seeking to
achieve the objective of socialist pattern of society, the Nehru government envisaged an
expanded role of public sector and the importance of planning in all –round development of
the country.
The scene had, however, undergone changes following the adoption of the 1977
Industrial Policy Resolution, by Janata Party government. Given the failure of the past
resolution to bring about inclusive development, the new government felt the need to reframe
industrial policies and especially the role of public sector which did not fulfil the expectation
that it had generated when formed. The 1977 Industrial Policy thus insisted that public sector
would not only be the producer of very important and strategic goods of basic nature, but it
would also work of maximizing essential supplies for consumes besides contributing to the
development of small-scale sector and ancillary units.
With the collapse of the Janata Party government in 1980, the Congress returned to
power, though it also brought about significant transformation in the 1980 industrial policy.
Two issues stand out: for the first time, the public sector units were subject to severe criticism
for their inefficiency, especially in managing their affairs. The second issue which was being
raised in past relates to the liberalized licensing regulations for big industries. Thus, the
support that public sector had received from political authority was gradually withdrawn.
Although the government led by Rajiv Gandhi (1984-89) did not abdicate the socialistic
pattern of society in which public sector remained pre-eminent, changes in policy directions
were clearly visible, the government despite having underlined the importance of public
sector in economic growth opened the doors for private sector in many reserved areas which
so far remained the exclusive domain of public sector in order to reduce the burden on the
state and also urged private entrepreneurs to be creative in their approach to address the
global challenges. The change was reflected in the Seventh Plan (1985-90) which argued for
gradual withdrawal of blanket support for public sector units and the idea was also mooted
that they needed to face competition to establish their viability.
The beginning of 1990 saw a paradigmatic shift when the Congress leadership openly
advocated for economic liberalization and think beyond the age-old emphasis on public
sector as a reliable engine for growth. The change was not only due to the feeling that public
sector was not adequately equipped to bring about inclusive growth, but it was also due to the
global change following the collapse of the Soviet Union, and the disintegration of the east
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European countries that precipitated an unprecedented fiscal crisis of the state and serious
erosion of balance of payments in India’s imports and exports.
5.5 Failure of State led Model of Development
Economic planning in South Asia is, as Myrdal argues,’ …. not the result of development but
is employed to foster development. The underdeveloped countries in this region are thus
compelled to undertake what in the light of Western history appears as a short –cut’.20
Despite the delight over planning, it left a large number of people below the poverty line.
By the late 1970s, there appeared to be a growing realization among policymakers in the
government that the state led strategy of economic development and industrialization failed to
achieve the developmental goals of India. Inefficient public sector enterprises, dismal
economic growth rate and rampant corruption in the public administration system were other
malaise in economy. Besides the inherent weaknesses of planning processes, India’s
development strategy did not yield the desired results presumably because of the failure in
evolving a broad political consensus on priorities. This is true that planning failed to evolve a
mechanism for equitable distribution of economic resource and was also detrimental to
capitalist development in India.21
Moreover, Nehruvian state directed model zeal for basic industries which led to the
neglect of other sectors and pay a little attention to minor projects to support it, like agranian
grievances (especially unfavorable terms of trade between rural and urban sectors amid
unremunerative prices for agricultural products), food deficits, famines and starvation, and
the drain on reserves of foreign exchange due to massive grain imports propelled agricultural
development to the front of economic agenda, leading to initial spurts of a Green Revolution
in some parts of the country.
Overall, the economy was deep into fiscal crisis. A host of social movements against the
deep entrenched corruption at all levels in the government, displacements and
disenfranchisements from entitlements, etc., were seeking to redefine the content and contour
of government agenda. In the face of such mass protests, the ruling elites took recourse to
authoritarian intervention in the political and social process by proclaiming Emergency
(1975-77). A part of the pattern was the repeated attempt by the ruling elites to curb the
freedom of press during and even after the Emergency. Such authoritarian measures were
retraced in the face of most determined protests and agitations in the press and the
underground against ethnic alienation, regional disparities and authoritarianism of the central
government. Ever since the Emergency, the misuse of government-controlled electronic mass
media continued, as has the tendency of the ruling parties to politicize professional neutrality
of civil service and to undermine the independence of judiciary. The elitist mentality and
wasteful lifestyles have created an enormous elite-mass gap. In these circumstances the
20
Myrdal, Asian Drama, 739.)
21
Meghnad Desai, Development and Nationhood: Essays in the Political Economy of South Asia (New Delhi:
Oxford University Press, 2005), 121.)
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practice of politics of populism by both the ruling party and parliamentary opposition was
also emerge.
On the other side, the international political and economic environment was rapidly
transforming and there was a critical pressure on the Indian state for structural adjustments
while giving aid: to open up the economy for market and minimize its spending on the social
sector in order to reduce its fiscal deficit, as mandated by the international economic and
financial institutions like International Monetary Fund (IMF) and World Bank to secure the
requisite fiscal discipline.
It was in this backdrop that the Indian government began reforming its economy in 1991.
The opening up of economy (i.e., liberalization), allowing the market to join the economy as
the main actor (i.e., privatization) and integrating the domestic economy with the world
economy (i.e., globalization) were the consequences a new economic policy.
5.6 Economic Liberalization Model
With the adoption of the 1991 New Economy Policy the congress government led by P.V
Narsimha Rao attempted to rejuvenate India facing heavy fiscal deficit and over-
centralization and excessive bureaucratization of economic processes. When the Rao
government stepped up the policy, it was a minority one party government based on a larger
legislative coalition constituted of left parties led by the Communist Party of India (Marxist),
Bharatiya Janata Party (BIP), and other national and regional parties. But despite that the
government did not turn around even, and managed to fabricate a majority in the Parliament
in the latter half of its mandate, though at some extent it slowed the pace of economic reforms
due to a series of defeats in state elections in the meantime, which were attributed by the
party rank and file to the loss of pro-poor image of the Congress on account of association
with the policy of economic liberalisation. On the whole, it can be said that despite
opposition to the aspects and pace of economic reforms in sections of the Caste parties, RIP
and Janata Dal ideological terms, the new policies and revisions, by and large, have enjoyed a
broad consensus in the entire spectrum of the party system.
5.7 New Economic Policy 1991
The year of 1991 can thus be treated as a turning point in India’s economic growth, with the
release of wide – ranging measures to deregulate the economy, discontinuing the licence-
quota –permit raj.22 The principal objectives of the Industrial Policy Resolution 1991 were to
‘build on’ the gains already made, correct the distortions or weaknesses that might have held
back the progress, maintain a sustained growth in productivity and gainful employment and
attain international competitiveness.
The new policy was to deregulate the industrial economy in a phased manner, for those
four specific steps were recommended. First, to release the industrial sector from unnecessary
restrictions, the government basically decided to abolish industrial licensing policy for all
22
Government of India, Handbook of Industrial Policy and Statistics (New Delhi: Office of Economic Advisor,
Ministry of Commerce and Industry, 2001), 10.)
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categories except for a short list of Industries related to security and strategic concerns, social
welfare, hazardous chemicals and overriding environment considerations. Second, the
government remove restrictions on FDI and also endorsed direct foreign investment unto
51% foreign equity in high- priority industries. Third, it was also decided to withdraw
protection of the sick public sector units to introduce liberalization with a view to integrate
the economy with the world economy. Forth, disinvestment of shares of a select set of power
public enterprises for raising resources and to encourage wider participation of general in
their ownership.
Unlike the 1956 Industrial Policy Resolution which reserved as seventeen industries
exclusively for public sector, the 1991 Regulation reduced the number to eight which are: (a)
arms and ammunition, (b) atomic energy, (c) coal and lignite, (d) mineral oils, (e) mining of
iron ore, manganese ore, gypsum, sulphur, gold and Dimond, (f) mining of copper, lead, zinc,
molybdenum and wolfram, (g) minerals, specified in the schedule to the atomic energy of
1953 and (h) rail transport.
Besides demarcating specific areas in which public sectors were allowed to operate, the
1991 Resolution also approved memorandum of understanding with other companies if that
help them in capturing the larger share in the international market. Thus, the major initiatives
towards restructuring of public sector units (PSUs) were initiated in view of their low
productivity, over staffing lack of technological upgradation and low rate of return.
5.8 Issue of Contention
There is no doubt that economic reforms brought about radical changes in India’s political
economy. Yet, the old regulatory regime remained critical in the path and processes of
liberalization in a very decisive way. Mainly that proliferates India towards state- guided
model of liberalization rather than market fundamentalism. This has resulted in an obvious
tension in the economy which is neither appreciative of market-hegemony nor full supportive
of the erstwhile state led development paradigm. In fact, here lie the roots of severe social
discontentment fuelling ideological political movements, including militant Maoist
movement, challenging the state for its failure to protect the marginalised. The situation has
thus become far more complicated because, on the one hand, there is evidence to confirm that
state has miserably failed to address genuine socio-economic grievances of the majority of
the people, especially in rural India leading, on the other hand, to the consolidation of people-
centric political movements, redrawing the contour of Indian politics that cannot be formatted
in the available theoretical discourses.
On the basis of the present state of affairs, it can be observed that India has adopted
reforms in perhaps a very guarded manner. And there are plenty of reasons that one probably
cannot simply wish away the theoretical justification of state intervention in a transitional
economy. Socialist principles may not have been forgotten, but the importance of the state in
social sector cannot be minimized unless a meaningful alternative is mooted. This is reflected
in the obvious distortions in India’s economy.
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Still, reform is a contentious issue in India. With the consolidation of globalization, it is

true that there is no alternative to economic reforms. It is also true that without a proper
political backing, economic reforms are just mere devices without much substance.
Furthermore, the state has a crucial role to play in the changed circumstances.23
5.9 Summary
The importance of public sector has considerably declined in the post – liberalization era in
view of the failure of the state-led planned development to bring about inclusive growth in
India. In this context globalization acquired the centre place in present times. In most general
sense, Globalization is a multi- dimensional process that has unified people of the world into
a single society through a combination of economic, technological, socio- cultural and
political forces and has drastically affected the lives and living of people of developed,
developing and underdeveloped nations alike. It is irreversible in character and entails
negative as well as positive consequences for societies and their governance systems.
Today, the challenges in India are multifarious and one among them is the socio-
economic transformation. In the era of Globalisation, the overriding economic imperatives of
profitability and sustained economic growth may entail heavy social and ecological costs.
The social costs are evident in the decline in public expenditure by governments which
affects the poorer and weaker sections of society and backward regions more than the affluent
classes and communities and advanced regions. Comprehensively, India with the market
intervention in the economy, the private entrepreneurs have undoubtedly contributed to
growth though it has created economic disparities since the principles of social development
were replaces by syndrome of economic growth. As is obvious, the private investors prefer to
invest in profit making areas ignoring social development while the public enterprises remain
committed to inclusive development that cannot be attained if the desire for growth prevails
over other considerations.
Though the discussion raises serious questions regarding India’s developmental policies.
The nation needs development, but it should be sustainable, equitable and linked with the
empowerment of the common people. In the case of market model, the effected should be
compensated not only financially but also socially and culturally. Development should not be
at cost of the weaker sections of society, it has to be inclusive and equitable. Largely, India
has still a long way to go in adapting institutions and aspirations in that direction.
1. Write an essay on Political Economy of development in India.
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
23
Desai, Development and Nationhood, 189.)
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2. Discuss the main features of Nehruvian model of development.

..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
3. Critically analyze the economic liberalization model of policy – making in India.
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
4. Examine the success and failure of the strategy of planned economic development of
India.
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
5. Analyze the reasons that led to neoliberal economic reforms in India.
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
6. Examine the conceptual contour of globalization. Has the globalization process widened
the gap between the rich and poor in India? Give reasons in support of your answer.
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
7. Discuss about the shifts in development discourses in contemporary India.
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
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5.11 References
Bardhan, Pranab. (2008). The Political Economy of Development in India. New Delhi:
Oxford University Press.
Basu, K. (Eds.). (2004). India’s emerging economy: Performance and prospects in the 1990s
and beyond. New Delhi: Oxford University Press.
Bidyut, C. & B. Mohit. (2003). Public Administration- A Reader. New Delhi: Oxford
University Press.
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Bhaduri, A & Nayyar, D. (2000). The intelligent person’s guide to the liberalization. New
Delhi: Penguin.
Bhagwati, J. & Srinivasan, T.N. (1993). India’s economic reforms. New Delhi: Ministry of
Finance, Government of India.
Byres, Terrance J. (Ed.). (1997). The state development planning and liberalization in India.
New York, Delhi: Oxford University Press.
Chandhoke, N. & Priyadarshi, P. (Eds.). (2000). Contemporary India: Economy, society,
politics. Pearson.
Chandra, B.et al. (1998). India’s Struggle for Independence, New Delhi: Penguin Books
India.
Chatterjee, P. (2000). Development planning and the Indian state. In Zoya Hasan (Ed.)
Politics and the state in India. New Delhi: Oxford University Press.
Dye, T. R. (1995). Understanding Public Policy. New Jersey: (11th edition) Prentice Hall.
Entman, R. (1983). Impact of Ideology on Legislative Behaviour and Public Policy. Journal
of Politics.45, 163-182.
Frankel, Francie R. (2005). India’s Political Economy, 1947-2004. New Delhi: Oxford
University Press.
Hinich. M.J. & Munger, M.C. (1994). Ideology and the Theory of Political Choice. Ann
Arbor, MI: University of Michigan Press.
Held, D. (2005). Debating globalization. Cambridge: Polity Press.
Mukerjee, Rahul. (2014). Political Economy of Reforms in India. New Delhi: Oxford
University Press.
Sinha, Aseema. (2004). The changing Political Economy of Federalism in India: A historical
institutional approach, Indian Review, Vol. 3, Issue No. 1, 25-63.
Sapru, R. K. (2006). Public Policy. New Delhi: Sterling Publishers.
Self, P. (1993). Government by the Market? The Politics of Public Choice. Basingstoke:
MacMillan, pp. 1-20,70-105,113-146,198-231 and 262-277.
58

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Unit 1-5 - Public policy in India sol material semester 6

Political science (University of Delhi)

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B.A. (Hons.) Political Science Semester-VI

Discipline Specific Elective (DSE-3)

SCHOOL OF OPEN LEARNING

Editor : Dr. Mangal Deo

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Discipline Specific Elective (DSE-3)

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Introduction to Policy Analysis

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1.2 Evolution of Policy Analysis

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problems. Furthermore, comparative policy analysis has origins in anthropology, geography,

1.3 Concept of Policy Analysis

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1.5 Context for Policy Analysis

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Figure 1: Elements in the policy analysis approach.

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Figure 2: Steps in a policy analysis study.

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1.9 Practice Questions

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The Analysis of Policy in the Context of Theories of State

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“……institutional studies usually described specific government institutions …. without

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2.4 Distinction between Policy Analysis and Related Concepts

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3. Impact Assessment Techniques

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making, and implementation, appears to be weak vis-a-vis political and bureaucratic

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Political Economy and Policy: Interest Groups and Social Movements

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reasons. There are three types of conflict-of-interest regulation: activity prohibitions,

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