Policy Formulation

1. It is the stage of the policy process where pertinent and acceptable courses of action for dealing with some particular public problems are identified and enacted into law(James E Anderson, 1990).

2. Policy Formulation Dr. UpulAbeyrathne, Senior Lecturer, Department of Economics, University of Ruhuna, Matara

3. Nature of Policy Solutions • The expected result of the policy formulation is some type of solution.

4. Deborah Stone’s Categorization of Solutions • 1. Inducement : Positive (e.g. Tax Holidays) Negative (e.g. Punishment for pollution). • 2. Rules: Other forms of mandated behaviour such as regulations of governing pollution. • 3. Facts: The use of information to persuade target groups to behave in certain ways (e.g. Community rights to know information) • 4.Rights: gives certain people rights or duties • 5. Powers: Decisions making body is charged with specific powers to improve the decision making

5. These policy decisions may either be • Legislation by the parliament • Executive orders • Judicial decisions • Other forms of policy outputs.

6. Actor • Multiple actor • Governmental agencies: Departments, Commissions etc. • The executive: President/Cabinet • The Legislature • Interest groups • Politically Persons

7. Government Agencies • Most of the policy are being decided by government agencies or bureaucracies. • This is contrary conventional logic. • They are experts in certain policy area. Legislators are laymen. • Some proposals are intended to remedy previous policy decision • Process information. This information forms the basis of law.

8. Executive • Has become the most important policy initiator. • In America, the executive is the chief initiator of laws. Separation of power. • Presidential Commissions, Task forces and interagency committees etc. • Cabinet system of Government, executive can control the legislature.

9. Two Important Models • 1. Rational Comprehensive Model • 2. Incremental Model

10. Rational Comprehensive Model • It is based on an assumption. • Individual decision makers arrive at decision on the basis of rational calculation of cost and benefits.

11. Components • A given problem can be separated from the rest of the problem. • The values, goals and objectives that guide the decision maker have to be clarified, • They have to be ranked according to their importance. • A complete list of alternatives has to be made.

12. Each alternative and its attendant consequences have to be calculated. • Finally, the best option that maximizes the goals, value and objectives have to be chosen.

13. Criticism • Public problems can not be separated from others. They are interwoven. • Complete information is not available. Hence, complete accuracy is not a achievable target. • Human are not always rational. • Problem of “Sunk Cost”.