Topic 9 Policy Process Study: Policy Formulation and Making

1. Topic 9Policy Process Study:Policy Formulation and Making PEDU 6209 Policy Study in Education

2. Perspectives and Processes in Policy Studies

3. Theories of the Policy-making Process • The first generation of policy-making process theories • Scientific-rational model • Incrementalist model • Garbage can model • The second generation of policy-making process theories • Comprehensive rational model • The stages heuristic model • New Institutionalism model • The multiple stream model • The discourse model

4. ComprehensiveRationalist Perspective in Policy Making Theory • Comprehensive rational framework: The ideal-typical framework • Problem analysis • Pathology control approach • Desirability striving approach • Comprehensive information gathering • Solution analysis • Best solution approach • Satisfice and good enough resolution approach

5. ComprehensiveRationalist Perspective in Policy Making Theory • Harold Lasswells’ intelligence system for policy making • Intelligence: The stage of intelligence collection, which consists of • Information of the status quo of the phenomenon to be intervene • Information of causal relations among vital constituents in operation within the policy phenomenon • Information of the feasibility of candidate solutions • Cost-benefit analysis of candidate solutions

6. (Weimer & Vining, 1992) • PROBLEM ANALYSIS • Understanding the problem • Choosing and explaining relevant goals and constraints. • Choosing a solution method. SOLUTION ANALYSIS 4. Choosing evaluation criteria 5. Specifying policy alternatives 6. Evaluating: predicting impacts of alternatives and valuing them in terms of criteria 7. Recommending actions. (a) Receiving the problem: assessing the symptoms. (b) Framing the problem: analyzing market and government failures. (c) Modeling the problem: identifying policy variables. COMMUNICATION Conveying useful Advice to clients INFORMATION GATHERING Identifying and organizing relevant data, theories and facts; using facts as evidence about future consequences of current and alternative policies. Figure 8.1: A summary of Steps in the Rationalist Mode

7. ComprehensiveRationalist Perspective in Policy Making Theory • Harold Lasswells’ intelligence system for policy making • Promotion: The stage of considering the pros and cons of candidate solutions • Prescription: The stage of making decision on the prescription of the course of action to be taken • Invocation: The stage of laying down the rules and regulations based upon which the policy prescriptions can be invoked • Application: The stage of carrying out the course of action stipulated in the policy by the designated authority. • Termination: The stage of bringing the course of action to a close as designed • Appraisal: The stage of evaluating the effectiveness or/even efficiency of the policy measures.

8. Political Perspective in Policy Making Theory • Criticism on comprehensive rational framework by incrementalism and the introduction of political rationality into the policy process study • Conceptual difference between political rationality and means-end rationality • Means-end rationality refers to agency that a person acts in a conscious and knowledgeable “way in which the attainment of his goal can be maximized in the real world.” (Dahl & Lindblom, 1992, p.57) • Political rationality refers to the agency that the person will make conscious and knowledgeable consideration of the political reality and its entailed constraints and opportunities, within which the maximization of the means-to-an-end / satisfice project is carried out.

9. Political Perspective in Policy Making Theory • Pluralism: The simple institutional model • The general political system model: Pluralism as a theory of policy making or politics in general is generated from the political system model. In political system model, political process is characterized as input-process-output-feedback model. • Pluralistic model characterizes the policy making with the following attributes • Plurality of interest groups each with equal capacities in inputting political demands into the polity • The polity processes the plurality of political demands in impartial and indiscriminant manner • Plurality of administrative output to meet with plurality of political demands

10. Political Perspective in Policy Making Theory • Advocacy coalition model This model further specifies that the networking among policy actors in policy making process by put forth the concept of advocacy coalition. It indicates that policy actors will form coalition in order to advocate a particular policy choice. These coalitions will subsequently constitute a stabilizing parameter or institutional inertia within a policy area.

11. Political Perspective in Policy Making Theory • The state theory State theorists criticize pluralism and political system of treating the state as a blackbox or an impartial arbitrator of political demands. In replacement, they put forth different thesis on the natures and features of the modern state • The instrumental-state perspective • The corporatist-state perspective • The derivative-state perspective • Competition-state perspective

12. Simon and March’s Contribution to the New–institutionalism • The contribution of Herbert Simon: Herbert A. Simon, the Nobel laureate in Economics 1978, in his now-classic Administrative Behavior (1997/1945) has made to important distinctions, • Distinction between economic man and administrative man: Simon underlined that " The model of economic man was far more completely and formally developed than the model of the satisficing administrator. …limited rationality was defined largely as a residual category—as a departure from rationality." (P. 118)

13. Simon and March’s Contribution to the New–institutionalism Nobel laureate In Economics 1978 (1916-2001)

14. Simon and March’s Contribution to the New–institutionalism • The contribution of Herbert Simon: … • Distinction between the maximization principle (best solution) and satisfice principle (good-enough solution): "Whereas economic man supposedly maximizes—selects the best alternative from among all those available to him—his cousin, the administrator, satisfices—looks for course of action that is satisfactory or "good enough". (P.119)

15. Simon and March’s Contribution to the New–institutionalism • James March’s conception of logic of appropriateness: James G. March, who once coauthored with Simon in another now-classic, Organizations (1958/1993) and has since then become one of the representative figures in new-institutionalism, underlines that

16. Simon and March’s Contribution to the New–institutionalism • James March’s logic of appropriateness… • Policy making process is not simply a rational calculation of means-end and/or cost-benefit analyses but should be conceived predominantly as institutional processes; hence they are by definition influenced if not determined by the features, structures and cultures of the institutions, in which the policy making processes are supposed to undergo.

17. Simon and March’s Contribution to the New–institutionalism • Accordingly, he makes the distinction between the logics of consequence and that of appropriateness. • Logic of consequence: “The idea is that a reasoning decision maker will consider alternatives in terms of their consequences for preferences.” In other words, it assumes that “decision processes …are consequential and preference-based. They are consequential in the sense that action depends on anticipation of the future effects of current actions. Alternatives are interpreted in terms of their expected consequences. They are preference-based in the sense that consequences are evaluated in terms of personal preferences. Alternatives are compared in terms of the extent to which their expected consequences are thought to serve the preferences of the decision make. (March, 1994, P. 2)

18. Simon and March’s Contribution to the New–institutionalism • James March’s logic of appropriateness… • Logic of appropriateness: “When individuals and organizations fulfill identifies, they follow rules or procedures that they see as appropriate to the situation in which they find themselves. Neither preferences as they are normally conceived nor expectations of future consequences enter directly into the calculus.” (March, 1994, p. 57)

19. Simon and March’s Contribution to the New–institutionalism • James March’s logic of appropriateness… • Accordingly, decision makers are no longer based on the choices solely on consequences of actions and the extent that their preferences are satisfied by the consequences of actions. Instead they would base their choices on the follows: (p.58) “1. The question of recognition: What kind of situation is this? 2. The question of identity: What kind of person am I? Or what kind of organization is this? 3. The question of rules: What does a person such as I, or an organization such as this, do in a situation as this?” (March, 1994, P. 58)

20. Simon and March’s Contribution to the New–institutionalism • Taking together, Simon and March’s conceptions on decision making process, policy making processes are no longer conceived as simple rational, consequential and preference-based calculations taking places in some socio-cultural vacuum. Policy-making processes must be studied against the institutional contexts and situations in which they are embedded. Decision makers, who recognized in these institutional contexts, are embodied with particular identities. And deriving from these institutional contexts and identities are rules that these decision makers would find themselves obliged to follow.

21. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Elinor Ostrom, one of the co-winners of the 2009 Nobel Prize in economic science, has developed the IAD framework to analyze how an aggregate of rational decision makers come to reciprocal decision of mutual benefits. (Ostrom, 1990; 1999; 2005)

22. Elinor Ostrom (1933-2012)

23. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Elinor Ostrom, one of the co-winners of the 2009 Nobel Prize in economic science, has developed the IAD framework to analyze how an aggregate of rational decision makers come to reciprocal decision of mutual benefits. (Ostrom, 1990; 1999; 2005) The framework is made up of three tiers of conceptual units, namely (1) the action arena, (2) the exogenous variables, and (3) the interaction patterns and their outcomes. This framework can be represented as follows.

24. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism (Source: Ostrom, 2005, P. 13)

25. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • The action arena: The core conceptual unit of the IAD framework is what Ostrom called the action arena. The action arena of made up of two units, namely the actors and action situation

26. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Action situation: “The structure of an action situation includes • the set of participants, • the specific positions to be filled by participants • the set of allowable actions and their linkage to outcomes, • the potential outcomes that are linked to individual sequence of actions, • the level of control each participant has over choice, • the information available to participants about the structure of the action situation, and • the cost and benefits―which serve as incentive and deterrents―assigned to actions and outcomes.” (Ostrom, 1999, P. 43) Roles Roles expectation Roles performance Social Control

27. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Action situation: … In addition, an action situation can further be characterized as recursive or non-recursive. This conceptual unit can be represented as follows. (Source: P. 33)

28. Recursive Situation Non-recursive Situation

29. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • The actors: Actors in the action arena can either be “a single individuals or a group functioning as a corporate actor.” (Ostrom, 1999, P. 44) This actors are assumed to possess • meanings and values imputed to the situations; • resources, information, and beliefs; • information-processing capacities; and • decision-making strategies brought to the situation. With these possessions, Ostrom suggested that actors can further be characterized into for examples as “Homo economicus”, “Fallible learner”, “opportunist”, etc

30. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • The exogenous Variables: The second tier of conceptual unit consists of three exogenous variables, each of which will asset its effect on the dependent variable, i.e. action arena. These exogenous variables include • The rules in use: • The concept of rules: Ostrom defines rules as “shared understanding among those involved that refer to enforced prescriptions about what actions are required, prohibited, or permitted. All rules are the results of implicit or explicit efforts to achieve order and predictability among humans by creating classes of persons (positions) that are then required, permitted, or forbidden to take classes of persons in relation to required, permitted, or forbidden states of the world.” (Ostrom, 1999, P. 49, original emphases)

32. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • The exogenous Variables: … • The rules in use: … • Rule configurations: Ostrom differentiates seven types of working rules each of which affect one aspect of the structure of the respective action arena. These rules are represented as follows. (Source: Ostrom, 2005, P. 189) • Accordingly, these seven types of rule will configure into a set of “rules-in-use” in a particular action arena and subsequently in an institution.

33. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • States of the world: It refers to the biophysical/material condition, in which the action arena is embedded. Ostrom has specified the attributes of the states of the world with two dimensions, namely excludability and subtractability. • Excludability refers to the extent that whether the goods and/or services available in a given state of the world are difficult and costly to exclude those who are not entitled to consume the respective goods and/or services. • Subtractability refers to the extent that whether numbers of consumers consuming the goods and/or service in a given state of the world will subtract the quantity and quality of the respective goods and/or services.

34. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • States of the world: …..Accordingly, goods and services available in a given state of the world can be categorized as follows. (Source: Ostrom, 2005, P. 25)

35. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Attributes of community: The third set of exogenous variables affecting the structure of the action arena is the community and its attributes. It is the least development conceptual unit in the IAD model. This underdevelopment of the conceptual unity of community is understandable given the academic background of Ostrom, who is a political scientist focusing on rational-choice institutionalism. She has specifically assigned the task of developing the conceptual unit of community to sociologists, who “tend to be more interested in how shared value system affect the ways human organize their relationships with one another.” (Ostrom, 1999, P. 50)

36. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Attributes of community: … Ostrom has simply outlined five attributes of community, namely (Ostrom, 2005, P. 26-27) • “values (and norms) of behavior generally accepted in the community; • the level of common understanding that potential participants share (or do not share) about the structure of particular types of action arenas; • the extent of homogeneity in the preferences of those living in a community; • the size and composition of the relevant community; and • the extent of inequality of basic assets among those affected.”

37. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • The interaction patterns and outcomes: Ostrom, as an institution analyst, underlines that the accuracy of institutional analysts’ inference of interaction patterns (i.e. institutions) and outcomes generated in a given action arena depends on the empirical attributes of the exogenous variables, the actors and the action situations in the IAD models at point.

39. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Market Institution: Prefect competitive market

40. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Tragedies of the Common

41. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Application of tragedy of the common on the impact of Direct-Subsidized Scheme (DSS) on the common-pool of schools and schoolplaces in the public-school sector of Hong Kong.

42. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Prisoner’s dilemma: Ostrom conceives prisoner’s dilemma model in game theory as a particular case of common-pool resource (CPR) situation. Instead of numerous participants, in prisoner dilemma model there are only two participants. However, under the assumption of rational calculation of maxcimizattion of bebefit, the situation would only encourage defect and discourage cooperation. Hence, the results of the prinsoners’ rational choices are the same as CPR situation, i.e. tragedy of the common.

45. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Evaluating outcomes: The final conceptual unit of the IAD framework is the evaluating the outcomes being achieved. Ostrom proposes that the outcomes can be evaluated under six criteria. These evaluative criteria are: • Economic efficiency: “Economic efficiency is determined by the magnitude of the change in the flow of net benefits associated with an allocation or reallocation of resources.” (Ostrom, 1999, P. 48)

46. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Evaluating outcomes: … • Fiscal equivalence: “There are two principal means of assessing equity: (1) on the basis of the equality between individuals’ contributions to an effort and benefits they derive and (2) on the differential abilities to pay. The concept of equity that underlies an exchange economy holds that those who benefit from a service should bear the burden of financing that service.” (Ostrom, 1999, P. 48) • Redistributional equity: “Policy that redistribute resources to poorer individuals are of considerable important. …The provision of facilities that benefit particularly needy groups …may conflict with the goal of achieving fiscal equivalence.” Ostrom, 1999, P. 48)

47. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Evaluating outcomes: … • Accountability: “In democratic polity, officials should be accountable to citizens concerning the development and use of public facilities and natural resources. Concern for accountability need not conflict greatly with efficiency and equity goals.” (Ostrom, 1999, P. 48)

48. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Evaluating outcomes: … • Conformance to general morality: This criterion refers to evaluate the level of general level of general morality fostered by a particular set of institutional arrangements.” And Ostrom has suggested two of such general morality. One is honesty, which concerns with issues such as “are those who are able to cheat and go undetected able to obtain very high payoffs? Are those who keep promises more likely to be rewarded and advanced in their careers?” Another general morality is sustainability of reciprocal interaction, i.e. “How do those who repeatedly interact within a set of institutional arrangements learn to relate to one another over the long term?” (Ostrom, 1999, P. 49)

49. Elinor Ostrom’s Institutional Analysis & Development in Rational-Choice Institutionalism • Evaluating outcomes: … • Adaptability: Lastly, Ostrom underlines that “unless institutional arrangements are able to respond to ever-changing environments, the sustainability of resources and investment is likely to suffer.” (Ostrom, 1999, P. 49) Taken as a whole, Ostrom reminds us “trade-off are often necessary in using performance criteria as a basis for selecting from alternative institutional arrangements. It is particularly difficult to choose between the goals of efficiency and redistributional equity.” (Ostrom, 1999, P. 49)