MM5010-Entrepreneurial Leadership

Midterm Exam

Syndicate Group 1: SLEMBA BPOM

Andi Wibowo (29320081)
Bayu Wibisono (29320174)
Chatulis Indra Jaya (29320188)
Fadhila Nurfida Hanif (29320149)
Febriany Martiana Nasel (29320007)
 3. Review the theories of public policy (institutionalism,
rational choice, elite, incrementalism, etc) and provide
your analysis on the strengths and weaknesses of each
theory. Please incorporate your analysis by providing an
example of the theory implementation that you know
Public Policy Theory
1. Institutionalism
 The institutional approach focuses on the more
formal and legal characteristics of government
institutions, including their formal structure, legal
authority, procedural norms, and activities.
 Static and formalistic approach
 Executive, legislative, and judicial branches
 Institutional aaproach have concentrated on the
institutional structures, organization, functions, and
responsibilities of institutions without examining
their influence on public policy.
Example of Institualism theory:
 Nigeria: the legislative body, executive and
judiciary vary depending on the regime in power.
When a democratically elected regime comes to
power, its institutions are the National Assembly,
the Federal Executive Council, and the Federal
Court. However, during a military regime, the
Supreme Military Council or the Council of Rulers
of the Armed Forces is the legislative body, and the
Council of Ministers is the executive (Anyebe,
2018).
 Indonesia: In 2020, the House of Representatives
took the initiative to enact a law on the Ideological
Path of Pancasila which is a guideline for state
administrators in preparing and evaluating national
development policies
 2. Public choice
 Public choice theory is inextricably linked to social choice theory, a
mathematical framework for aggregating individual interests,
welfare, or votes.
 US: in 1989 there were intense negotiations
 This approach sees policy as a collective decision formulation
on the General Agreement on Tariffs and
process of the individuals who have an interest in the decision.
Trade (GATT); $40+ billion allocation bill for
 The roots of this policy relies that humans are homo economicus
state agriculture and food programs; a $900
who have interests that must be satisfied.
million farmer reimbursement package for
 The principle is buyer meets seller, supply meets demand (Tahir,
crop losses due to droughts, floods (Tullock,
2018).
G., & Hillman, J.,1991).
 This model emphasizes that the policies made by the government
 Indonesia:
must be policies based on the choices of the majority public
- The rules regarding online motorcycle taxis
(Shughart & Tollison, 2005).
and online taxis were drawn up because of
the many waves of demonstrations to ask for
legal certainty of their presence.
- disposal of air and water pollution, which
causes others to bear it. Governments
respond to this by regulating activities that
generate externalities or imposing fines on
these activities to offset their costs to society.
 3. Elite theory
 In this theory, public policy may be viewed as a
reflection of a ruling elite's ideals and preferences.
 Public policy is not established by popular demands
and actions, but by the governing class, whose
preferences are carried out by political authorities and
institutions (Anyebe, 2018).
 Elites exert a greater impact on the masses than the
populace exert on elites (Dye and Zeigler, 1990).
 The policy is top-down (Hayat, 2017)

Example of elit theory:

o In US: The admittance of more than one million legal immigrants each year and the weak enforcement
of laws against illegal immigration, is primarily driven by business organizations wanting to reduce labor
costs. Agriculture, restaurants, the apparel industry, manufacturing, and hospitals, for example, all
spend a lot of money lobbying in Washington to undermine immigration rules and enforcement (Dye
and Zeigler, 1990).
o In Indonesia: The policy was carried out to revise the law on the KPK, which tends to weaken the KPK in
investigating and eradicating corruption.
4. Group Theory
 This theory relies on policy as a point of balance
(equilibrium).
 The core idea is that interactions within the group will
result in balance, and balance is best.
 The capacity of a group to influence policy is contingent on
a variety of elements, the most important of which include
wealth, organizational capabilities, leadership quality,
negotiating abilities, access to decision-makers, and a
measure of good fortune (Anyebe, 2018).
 India: Between 1974 and 1978, gender
concerns were a minor component of the
welfare program. A modest beginning
was made when a women's movement
fueled by a larger source of knowledge
and insights joined forces with an
increasing number of gender
demographics and specialists in the fight
for gender-sensitive legislation. As a
result of these pressure group initiatives,
the Sixth Plan (1981-1985) has a distinct
chapter on 'Women and Development.'
 Indonesia: Policy to grant privileges to
certain areas. Examples such as: Aceh,
Papua, Yogyakarta because of the
struggle of these areas.
5. Game theory
 Game theory describes policy as the result of the
interaction between two or more rational
participants.
 Game theory is concerned with the strategic choices
made by participants or players during a
competition, in which each participant or player
attempts to maximize profits and minimize losses.
 A governmental policy may not benefit all segments
of the population equally.
 The formulation of a specific policy may be
beneficial to one segment of society, but detrimental
to another (IGNOU University).
Example of Game theory:
 To attain more fairness in development results,
gender-sensitive policy formulation may
require males to give up some benefits and
assume certain duties. These policies benefit
women, but males may suffer as a result of
them.
 In Indonesia: Eid homecoming (mudik Lebaran)
policy during the COVID-19 pandemic. There is
a dilemma for people to choose going home or
not going home. Likewise with the
government, both policies to prohibit going
home or limit going home have their
respective consequences (Yazid, 2020).
Game theory on the dilemma of “pemudik”
during the pandemic can be seen in the image
below
 Game Theory Formulation Between “Pemudik” in the
midst of the COVID-19 Pandemic
“Pemudik” B
Mudik
“Pemudik” Mudik A & B: Economic conditions are both
bad. The risk of spreading is greatly
A increased. Both meet family.
(-2, -2)
Not Mudik A: The economic conditions are very
bad. The risk of spreading increases.
Didn't meet family.
B: Economic conditions are stagnant.
The risk of spreading continues to
increase. Meet family.
(-4, 0)
Not Mudik
A: Economic conditions are stagnant. The
risk of spreading continues to increase.
Meet family.B: Economic conditions are
very bad. The risk of spreading increases.
Didn't meet family.
(0 -4)
A & B: Economic conditions are both
stagnant. The risk of spreading both
stagnated. Neither of them met the
family.(-1, -1)
 6. Garbage can
 This theory of organizational decision-making must account
for a very complex interplay between the development of
issues inside an organization, human deployment, solution
production, and the opportunity for choice (Cohen et al.,
1972).
 The choice opportunity is a trash can into which
participants dump various types of issues and solutions as
they are created; policy results are determined by the mix
of garbage in the can: problems, solutions, participants,
and participation resources, as well as how the can is
processed.
 Each actor and activity can function as an impulse or a
restraint; streams are essentially self-contained.
 Problems, policies, and politics all go into defining the
agenda for action in a given policy area, as illustrated by
the garbage can model (Kingdon, 2014).
Example of garbage can policy:
 The foreign policy process will be
unpredictable and fluid since it is run like a
disorganized anarchy. Because of this, the
garbage-can model has the most relevance
to models for making foreign policy
decisions (Newmann, 1998).
 Indonesia: The arrangement of the policy
agenda for the Hajj bailout fund was
originally intended for Indonesians who
wished to perform Hajj but did not have
the money to go. But in the end, this Hajj
bailout became a bad policy and was
discontinued due to various existing
problems such as causing additional
waiting lists, usury, and so on (Adiakarti
Farid, 2019).
7. Incrementalism
 There will be only minor adjustments to current policies
when making incremental choices.
 Policymakers look at a small number of policy options before
settling on one and making incremental changes (Anyebe,
2018).
 Concern for unexpected effects; sunk costs from previous
initiatives may limit the scope for dramatic change,
according to the implications of this idea.
 This model is mostly carried out in developed countries,
while for developing countries it depends on the conditions
and situation of the country (Tahir, 2018).
Incremental model overview
Example of incrementalism:
 US: Gay rigths. In 1779, for example,
Thomas Jefferson proposed a law that
would have forced the castration of gay
men. More than 200 years later, in 2003,
the U.S. Supreme Court banned laws
criminalizing sexual conduct between same-
sex partners in its Lawrence v. Texas ruling.
Through an ongoing process of
incrementalism, most Western nations have
slowly expanded the rights of gay and
transgender people.
 Indonesia: development in Indonesia
applies short, medium and long term
policies. In the long-term policy, the
application of the incremental policy model
can be carried out
8. Process model
 Politics is an activity so it has a process.
 Public policy is a political process that includes a
series of activities: a) problem identification, b)
setting the policy formulation agenda, c) policy
proposal formulation, d) policy legitimacy, e) policy
implementation, and f) policy evaluation (Tahir,
2018).
 The process is the determinant of each output or
result of policy formulation (Hayat, 2017).
Examples of process model
 America: Public policy making goes through the following
stages: 1) Problem identification, 2) Proposal, namely the
submission of alternative proposals, 3) Decision Making
Process, in this process a model is used incremental,
analogizing, segmented.
 Civil Service Law (2014). An academic team commissioned
by the Domestic Affairs Committee prepared a draft bill
that was first presented to Parliament in 2011. Widely
debated within governmental and public forums,
policymakers initially failed to agree on it, until one of the
academic authors who drafted the bill published an
influential newspaper column which spurred action by
Cabinet in 2013. A watered down version of the bill was
subsequently passed by Parliament and approved by the
President in 2014. Although the Civil Service Commission
was accordingly set up and has been issuing its own
regulations, broader implementation of the law stalled
after the change of government in 2014. None of the
implementing regulations required by the law had been
passed at the end of 2016 (Blomkamp et al., 2018)
9. System theory
 Policy is the result or output of the system (public) (Tahir,
2018)
 The context of political systems, inputs and outputs
(usually in the form of requests and support on the one
hand and public policies on the other), and feedback are
all emphasized in systems theory.
 It can be beneficial in combating the propensity to
describe or evaluate political systems in isolation (Hahn,
1987).
 This model policy also looks at the demands, supports,
and inputs which are then transformed into authoritative
public policies for all members of the community.

Example of System theory:

Indonesia: after batik received a certificate from UNESCO as an Indonesian cultural heritage, the government is
now making a policy to register angklung with UNESCO so that the local musical instrument is not claimed by
other parties (Widyasari, 2014).
 10. Rationalism

 The rationalist model is concerned with the

development of public policies that result in improved
public policies. Thus, it seeks to improve the process of
public policy formulation (Anyebe, 2018).
 The Rational Model (Rational) puts forward the idea
that public policy is the maximum social gain, which
means that the government as a policy maker must
choose policies that provide optimal benefits for the
community (Tahir, 2018).
 In order to formulate effective policies, policy makers
should be rational.
 A policy is said to be rational only when these steps are
followed while formulating the policies: identification of
society's value preferences and their relative weights;
finding of policy alternatives that are available; Example of rationalism policy:
evaluation of the consequences of each policy Indonesia: Policy on “market operations” in the approaching
alternative; calculation of the ratio of benefits to costs Lebaran. With this market operation, it provides an
for each policy alternative; and selection of the most alternative to people who feel disadvantaged by the increase
efficient policy alternative (IGNOU).
in the price of basic foodstuffs. Of course, the community
really felt the impact of this policy.
 Strengths and weaknesess for every theory (1)
No. Theory Strengths
1. Institualism  Able to enter and reach all people in a society (Tahir,
2018)
 The excecutive, legislative and judicial institution are
chosen based on democratic involvement,
bureaucratic specification, and adjudication by a court
of law.
 The functions provided by these specific institutions
are the primary determinant of how particular
policies are implemented.
2. Public choice In both politics and economics, the government seeks to
increase profits while also benefiting personally.
3. Elite  The responsibility for the welfare of the people lies on
the shoulders of the elites, not on the people (Tahir,
2018).
 create and enforce policies that individuals must
abide by, since they lack the knowledge and skills
necessary to grasp the policies themselves
Weaknesses
 Government holds the monopoly on the authority
to compel compliance with policy or to penalize
breaches (Dye and Zeigler, 1990)
 Provides services that overlap with those of another
organization
 Segregation is difficult, and duplication occurs,
squandering the country's money and resources.
 there is no clear relationship between institutions
and policy, so this approach is often considered
unimportant and unproductive.
Because of the disparity in their political clout,
policymakers have only followed and supported the
policy ideas of powerful parties while neglecting those
of the weaker kind.
 The demands of the people (non-elite) are not being
heeded
 Changes to public policy are slow (Mustari, 2015)
 Only a small number of public servants and
politicians are considered members of the "elite."
 Strengths and weaknesess for every theory (2)
No. Theory Strengths Weaknesses
4. Group  The dynamics of the policy process are likely to be Influencing bureaucrats and legislators is
theory more vibrant and combative than in homogeneous difficult.
ones, because the capacity to influence policy
decisions is reliant on group unity and power
(Anyebe, 2018).
 Few groups and lobbyists wield significant influence
over the bureaucracy, and the legislature has final
say over policy formulation and execution.

5. Game theory The policy chosen is the safest policy or one that is It rationalizes selfish behavior in the name
adequate to obtain the minimal benefit rather than the of self-interest, and because values are very
highest benefit at the expense of risk, but has a varied, it is impossible to assert that
devastating effect on the policy at any other time. everyone will behave/respond in the same
way, as everyone is not totally rational, as
the idea of the Games Theory Model
asserts.
6. Garbage can  All decision-making occurs inside a single institution.  Habit has a tremendous impact on the
 Clearer picture of the actual mechanisms that decision-making process.
produce a decision, rather than merely an illustration  Not able to accept a haphazard issue
of the complexity of the advisory process
(Newmann, 1998)
 Strengths and weaknesess for every theory (3)
No. Theory Strengths
7. Incrementalism  Efficiency as compared to more formally
organized approaches of formulating policy. It
does not squander time or resources by making
plans for issues and outcomes that will never
arise.
 Currently implemented programs, policies, and
expenditures are viewed as being under the
standards of the new initiatives. Because they
are unsure of the implications of new policies,
policymakers accept the validity of prior
programs.
 Politically, incrementalism is the way to go. It is
important to reduce conflict tensions, maintain
stability, and protect the political system itself.
8. Process model  Transparent and have a well-defined policy
development procedure
 Engaging all stakeholders in the decision-making
process
Weaknesses
 "beagle fallacy." By taking small
incremental "baby steps" toward their
objectives, policymakers following the
incrementalism model risk missing the
overall goal of their task.
 One-step approaches simply focus at
current issues and short-term remedies,
leaving behind the larger issue, which
must be tackled head-on else any
progress made is quickly undone.
Only focusing on how actions are carried out
during the policy-making process, therefore
this approach lacks substance
 Strengths and weaknesess for every theory (4)

No. Theory Strengths Weaknesses

9. System Theory  Liberates social workers from medical treatment  Do not effectively address power and
and practice models social disparities, as well as the sources
 Can be utilized by practitioners working in direct of these inequalities
service, administration and organizational  Superior at describing and explaining
development, and community development. than at making predictions, and superior
at explaining at the probabilistic level
rather than the deterministic level.
10. Rasionalism No policy should be implemented if the costs Not entirely realistic, as it is predicated on
outweigh the benefits. the assumption that the decision maker is
fully informed of all relevant information.
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