SUB Hamburg

A/561750

Contemporary PolicyAnalysis

MICHAEL MINTROMUniversity of Auckland

New York Oxford

OXFORD UNIVERSITY PRESS

BRIEF CONTENTS

PREFACE XXI

1 Introduction 1

OVERVIEW OF POLICY ANALYSIS 132 What Policy Analysts Do 15

3 What Governments Do 27

4 Objectives of Government Policy Actions 43

5 Managing Policy Projects 63

6 Presenting Policy Advice 80

7 Doing Ethical Policy Analysis 95

ANALYTICAL STRATEGIES 109

8 Introduction to the Analytical Strategies 111

9 Analysis of Markets 119

10 Analysis of Market Failure 149

11 Analysis of Government Failure 189

12 Comparative Institutional Analysis 209

13 Cost-Benefit Analysis 225

14 Gender Analysis 246

15 Race Analysis 267

16 Implementation Analysis 285

IMPROVING YOUR PRACTICE 305

17 Developing as a Policy Analyst and Advisor 307

BIBLIOGRAPHY 315

INDEX 331

CONTENTS

PREFACE XXI

1 Introduction lThe Nature of Policy Analysis 2The Rise of Policy Analysis 5The Purpose and Organization of This Book 8Conclusion 9Exercises 10Further Reading 11

OVERVIEW OF POLICY ANALYSIS 13

2 What Policy Analysts Do 15The Social Function of Policy Analysis 16Where Policy Analysts Are Employed 18How Policy Analysts Contribute to Public

Decision Making 20Common Competencies and Attributes of

Successful Policy Analysts 22Why Being a Policy Analyst Is an Appealing

Career Choice 23Conclusion 24Exercises 25Invite a Guest to Class 25Further Reading 25

3 What Governments Do 27The Role of Government in Society 28Achieving Cooperation 29A Review of Government Policy Actions 30

Market Making 30Taxes 32Subsidies 32

x CONTENTS

Regulation 34Direct Service Supply 35Funding and Contracting 36Partnering and Facilitating 37Information and Social Marketing 38Frameworks and Strategies 39Summary 40

Increasing Complexity 41Looking Ahead 41Exercises 42Further Reading 42

Objectives of Government Policy Actions 43Discussing Government Policy Action 45Promoting Human Flourishing 47Promoting Effective Institutions 48Promoting Efficiency 50Promoting Sustainability 52Advancing Human Rights 53Promoting Social Equity 54Problem Definition and Agenda Setting 58Working with Objectives, Goals, and Public Policies 59Conclusion 61Exercises 61Further Reading 62

Managing Policy Projects 63The Discipline of Project Management 64

Project Initiation 65Project Planning 65Project Execution and Control 66Project Closure 66

Developing a Policy Project Proposal 66A Project Summary 67A List of Project Objectives 68A List of Project Deliverables 68A Project Task List 68A Preliminary Time Budget 71A Project Timeline 71Biographical Statements 71A Project Budget 72A Risk Assessment 72

Transitioning to Project Execution and Control 72

Contents xi

Constructing Progress Reports 73Managing Your Time 74

Make "To Do" Lists 74Prioritize Among Activities 75Batch Routine Tasks 75Think About Opportunity Costs 75Think in Marginalist Terms 75Take Care of Relations with Others 75Manage Your Downtime 75

Working with Policy Literature 76Conclusion 78Exercises 79The Class Project 78Further Reading 79

6 Presenting Policy Advice 80Clarifying Audience Needs 81Structuring a Policy Report 82

Abstract or Executive Summary 83Table of Contents 83Introduction 83Background 83Analytical Strategy 84Analysis and Findings 84Discussion 84Policy Recommendations 85Conclusion 86Other Items 87

Effective Presentation of Evidence 87Reflecting on the Contribution 89The Sign-Off 90Developing Presentations and Oral Briefings 91The Importance of Creativity 92Conclusion 93Exercises 94Invite a Guest to Class 94Further Reading 94

7 Doing Ethical Policy Analysis 95Policy Analysis and Ethical Practice 96Ethical Principles for Policy Analysts 100

Integrity 101Competence 101

xii CONTENTS

Responsibility 102Respect 102Concern 103

Doing Ethical Policy Analysis 104Ethical Problem Definition 104Ethical Construction of Alternatives 105Ethical Selection of Criteria 105Ethical Prediction of Outcomes 106Ethical Analysis of Trade-Offs 106Ethical Reporting Practices 107

Conclusion 107Exercises 108Invite a Guest to Class 108Further Reading 108

ANALYTICAL STRATEGIES 109

8 Introduction to the Analytical Strategies illPolicy Analysts in the Policy-Making Process 112The Analytical Strategy Chapters 113

Chapter 9: Analysis of Markets 113Chapter 10: Analysis of Market Failure 114Chapter 11: Analysis of Government Failure 114Chapter 12: Comparative Institutional Analysis 114Chapter 13: Cost-Benefit Analysis 114Chapter 14: Gender Analysis 114Chapter 15: Race Analysis 114Chapter 16: Implementation Analysis 115

Use of Applied Examples 115The Analytical Strategies and General Steps in

Policy Analysis 116When to Apply Each Analytical Strategy 118Conclusion 118

9 Analysis of Markets 119An Introduction to Market Analysis 121

Consumer Choice and the Demand Side ofthe Market 122

Firm Behavior and the Supply Side of the Market 131Equilibrium in Markets 135Comparative Static Equilibrium Analysis 136Price Signaling and Interconnected Markets 137Assumptions of the Market Model Revisited 138

Contents xiii

Using Market Analysis as an Analytical Framework 140Steps in Market Analysis 141

Step 1. Identify the phenomenon of interest. 142Step 2. Consider the behavior of consumers and producers. 142Step 3. Think in terms of comparative statics

equilibrium analysis. 142Step 4. Collect and analyze the relevant information. 142Step 5. Draw implications for government action. 142

An Applied Example 143Step 1. Identify the phenomenon of interest. 144Step 2. Consider the behavior of consumers and producers. 144Step 3. Think in terms of comparative statics

equilibrium analysis. 144Step 4. Collect and analyze the relevant information. 145Step 5. Draw implications for government action. 145

Advice for Analytical Practice 145Analysis of Markets and Other Analytical Strategies 146Chapter Content Review: A Self-Test 146Exercises 147The Policy Research Seminar 147Further Reading 148

10 Analysis of Market Failure 149An Overview of Market Failure 151

Information Asymmetries 151Rectifying Information Asymmetries 157Positive Externalities 160Rectifying Positive Externalities 162Negative Externalities 163Rectifying Negative Externalities 165Public Goods: Common Pool Resources 167Rectifying Problems with Common Pool Resources 169Pure Public Goods: The Need for Collective Provision 171Arranging Collective Provision 173Natural Monopolies and How They Can Be Managed 174Social Equity Concerns and How They Can Be Addressed 176

Using Market Failure as an Analytical Framework 178Steps in the Analysis of Market Failure 178

Step 1. Specify the good or service of interest. 179Step 2. Identify the consumers and producers and the

location of their transactions. 179Step 3. Using the tools of market analysis, construct a

simple model of how an efficient market wouldallocate this good or service. 179

xiv CONTENTS

Step 4. State the market failure that you believe is presentin this context. 179

Step 5. Analyze the actions of consumers and producersand how those actions contribute to market failure. 179

Step 6. Estimate the financial implications of the marketfailure, and note any other salient impacts. 180

Step 7. Identify efforts made by consumers, producers,and any other nongovernmental actors to address themarket failure. 180

Step 8. Suggest how government use of policy instrumentscould potentially address the market failure. 180

An Applied Example 180Step 1. Specify the good or service of interest. 182Step 2. Identify the consumers and producers and the

location of their transactions. 182Step 3. Using the tools of market analysis, construct a

simple model of how an efficient market wouldallocate this good or service. 182

Step 4. State the market failure that you believe ispresent in this context. 182

Step 5. Analyze the actions of consumers and producersand how those actions contribute to market failure. 182

Step 6. Estimate the financial implications of themarket failure, and note any other salient impacts. 184

Step 7. Identify efforts made by consumers, producers,and any other non-governmental actors to addressthe market failure. 185

Step 8. Suggest how government use of policy instrumentscould potentially address the market failure. 185

Advice for Analytical Practice 185Market Failure and Other Analytical Strategies 186Exercises 186The Policy Research Seminar 187Further Reading 187

11 Analysis of Government Failure 189An Overview of Government Failure

and Its Analysis 191Government and Coordination Problems 192Political Control 193Provider Capture 194Perverse Incentives 194Goal Displacement 195Institutional Inertia 196

Contents xv

Using Government Failure as an Analytical Framework 197Steps in the Analysis of Government Failure 198

Step 1. Define the area of policy interest. 198Step 2. Determine the objectives of government action. 198Step 3. Note the nature of information and coordination

problems that can arise through reliance on decentralized,private decision making. 199

Step 4. Contrast the current or favored government actionswith possible alternatives. 199

Step 5. Identify opportunities for undue politicalinterference in program management. 199

Step 6. Identify opportunities for provider capture. 200Step 7. Identify perverse incentives and unintended outcomes. 200Step 8. Propose changes in policy design to reduce

observed government failure. 200Step 9. Consider ways that reliance on government action

could be reduced over time. 201An Applied Example 201

Step 1. Define the area of policy interest. 202Step 2. Determine the objectives of government action. 203Step 3. Note the nature of information and coordination

problems that can arise through reliance ondecentralized, private decision making. 203

Step 4. Contrast the current or favored governmentactions with possible alternatives. 203

Step 5. Identify opportunities for undue politicalinterference in program management. 204

Step 6. Identify opportunities for provider capture. 204Step 7. Identify perverse incentives and unintended outcomes. 204Step 8. Propose changes in policy design to reduce

observed government failure. 205Step 9. Consider ways that reliance on government action

could be reduced over time. 205Advice for Analytical Practice 206Analysis of Government Failure and Other

Analytical Strategies 206Exercises 207The Policy Research Seminar 207Further Reading 208

12 Comparative Institutional Analysis 209An Overview of Comparative Institutional Analysis 211Using Comparative Institutional Analysis as an

Analytical Framework 213

xvi CONTENTS

Steps in Comparative Institutional Analysis 215Step 1. Select and refine the analytical questions. 215Step 2. Develop a research design, and select cases. 215Step 3. Collect and analyze the relevant information. 215Step 4. Isolate the relationships between institutional

choice and observed outcomes. 216Step 5. Present your findings, and make recommendations. 216

An Applied Example 217Step 1. Select and refine the analytical questions. 217Step 2. Develop a research design, and select cases. 218Step 3. Collect and analyze the relevant information. 218Step 4. Isolate the relationships between institutional

choice and observed outcomes. 219Step 5. Present your findings, and make recommendations. 219

Advice for Analytical Practice 220Comparative Institutional Analysis and Other

Analytical Strategies 220Exercises 221Invite a Guest to Class 222The Class Project 222The Policy Research Seminar 223Further Reading 224

13 Cost-Benefit Analysis 225An Overview of Cost-Benefit Analysis 226Using Cost-Benefit Analysis as an Analytical Framework 227Steps in Cost-Benefit Analysis 228

Step 1. Define the scope of the study. 229Step 2. Identify all negative and positive effects of the policy. 229Step 3. Estimate the monetary costs and benefits of the policy. 230Step 4. Take account of opportunity costs. 232Step 5. Calculate net present value. 232Step 6. Reflect on the value of human life and

quality-of-life issues. 233Step 7. Report study assumptions and limitations. 234Step 8. Present results using several scenarios. 235

An Applied Example 235Step 1. Define the scope of the study. 236Step 2. Identify all negative and positive effects of the policy. 237Step 3. Estimate the monetary costs and

benefits of the policy. 238Step 4. Take account of opportunity costs. 239Step 5. Calculate net present value. 239

Contents xvii

Step 6. Reflect on the value of human life andquality-of-life issues. 240

Step 7. Report study assumptions and limitations. 240Step 8. Present results using several scenarios. 240

Advice for Analytical Practice 240Cost-Benefit Analysis and Other Analytical Strategies 241Exercises 242The Class Project 242The Policy Research Seminar 244Further Reading 245

14 Gender Analysis 246Gender and Race Analysis 247

Policy Motives 248Policy Actions 249

An Overview of Gender Analysis 250Analysis of Aggregate Statistics 251Process Tracing 252Tests for Discriminatory Practices 254

Using Gender Analysis as an Analytical Framework 256Gender Analysis and Problem Definition 257Gender Analysis and Construction of Alternatives 257Gender Analysis and Selection of Criteria 257Gender Analysis and Prediction of Outcomes 258Reporting Gender Analysis 258

Steps in Gender Analysis 258Step 1. Select a specific context in which women

appear significantly disadvantaged relative to men. 259Step 2. Assemble evidence allowing you to illustrate

differences in men's and women's experiences insimilar contexts. 259

Step 3. Develop a process-tracing method to show howspecific institutional arrangements, social practices, ordecision making are discriminatory. 259

Step 4. Highlight discriminatory policies or practices, and showhow they disadvantage women compared with men. 260

Step 5. Propose policy actions to rectify thediscrimination and disadvantage. 260

Step 6. Address the view that gains forwomen spell losses for men. 260

An Applied Example 261Step 1. Select a specific context in which women appear

significantly disadvantaged relative to men. 261

xviii CONTENTS

Step 2. Assemble evidence allowing you to illustrate differencesin men's and women's experiences in similar contexts. 262

Step 3. Develop a process-tracing method to show howspecific institutional arrangements, social practices, ordecision making are discriminatory. 262

Step 4. Highlight discriminatory policies or practices, and showhow they disadvantage women compared with men. 262

Step 5. Propose policy actions to rectify thediscrimination and disadvantage. 263

Step 6. Address the view that gains for women spell losses for men. 263Advice for Analytical Practice 263Gender Analysis and Other Analytical Strategies 264Exercises 265The Policy Research Seminar 265Further Reading 266

15 Race Analysis 267An Overview of Race Analysis 268

Testing for Statistical Discrimination versusRacial Prejudice 269

Confronting Misattribution Problems 271Tracing Complex Processes 273

Using Race Analysis as an Analytical Strategy 274Race Analysis and Problem Definition 275Race Analysis and Construction of Alternatives 275Race Analysis and Selection of Criteria 275Race Analysis and Prediction of Outcomes 275Reporting Race Analysis 275

Steps in Race Analysis 276Step 1. Select a specific context in which significant

racial disparities are known or expected to exist. 276Step 2. Assemble evidence allowing you to confirm the

existence of racial disparities. 276Step 3. Develop a process-tracing method to show how

specific institutional arrangements, social practices, ordecision making are discriminatory. 276

Step 4. Highlight discriminatory policies or practices, andshow how they disadvantage specific racial groups. 277

Step 5. Propose policy actions to rectify thediscrimination and disadvantage. 277

Step 6. Scrutinize the proposed policy actions to avoidunintended negative effects. 277

Step 7. Estimate the gains for all groups that wouldresult from effective policy change. 277

Contents xix

An Applied Example 278Step 1. Select a specific context in which significant racial

disparities are known or expected to exist. 279Step 2. Assemble evidence allowing you to confirm

the existence of racial disparities. 279Step 3. Develop a process-tracing method to show how

specific institutional arrangements, social practices, ordecision making are discriminatory. 280

Step 4. Highlight discriminatory policies or practices, andshow how they disadvantage specific racial groups. 280

Step 5. Propose policy actions to rectify thediscrimination and disadvantage. 280

Step 6. Scrutinize the proposed policy actions to avoidunintended negative effects. 280

Step 7. Estimate the gains for all groups that wouldresult from effective policy change. 281

Advice for Analytical Practice 281Race Analysis and Other Analytical Strategies 281Exercises 283

| Further Reading 284

16 Implementation Analysis 285An Overview of Implementation Analysis 286

Envisioning Policy Success 287Identifying Tasks and Task Dependencies 288Identifying Threats to Successful Implementation 289Closing Knowing-Doing Gaps 290Planning for Evaluation 291

Using Implementation Analysis as anAnalytical Framework 292

Steps in Implementation Analysis 293Step 1. Identify the overall purpose of the new policy,

where it will be implemented, and how successhas been defined. 293

Step 2. Identify who will be responsible for policyimplementation and the behavioral changes thatimplementation is expected to produce. 293

Step 3. Specify the institutional, organizational, andprocedural changes required to supportthe new policy. 294

Step 4. Treating implementation as a project, note the keytasks required to establish the new policy context. 294

Step 5. Identify any significant threats to successfulimplementation and how they can be addressed. 294

xx CONTENTS

Step 6. Consider how institutional inertia mighthinder change and how it can be overcome. 294

Step 7. Ensure provisions have been made for evaluationof the new policy and associated programs. 294

An Applied Example 295Step 1. Identify the overall purpose of the new policy,

where it will be implemented, and how successhas been defined. 295

Step 2. Identify who will be responsible for policyimplementation and the behavioral changes thatimplementation is expected to produce. 296

Step 3. Specify the institutional, organizational, andprocedural changes required to support the new policy. 296

Step 4. Treating implementation as a project, note thekey tasks required to establish the new policy context. 297

Step 5. Identify any significant threats to successfulimplementation and how they can be addressed. 297

Step 6. Consider how institutional inertia might hinderchange and how it can be overcome. 298

Step 7. Ensure provisions have been made forevaluation of the new policy and associated programs. 298

Advice for Analytical Practice 299Implementation Analysis and Other Analytical Strategies 299Exercises 300Invite a Guest to Class 301The Class Project 301The Policy Research Seminar 303Further Reading 303

IMPROVING YOUR PRACTICE 305

17 Developing as a Policy Analyst and Advisor 307The Power of Positive Thinking 308Developing Openness and Creativity 309Skill Building through Deliberate Practice 311Becoming a Change Leader 312Further Reading 313

BIBLIOGRAPHY 315

INDEX 331