1

N
2
N
M.P.A.-15
Public Policy and Analysis
ASSIGNMENT SOLUTIONS GUIDE (2013-2014)
Disclaimer / Special Note: These are just the sample of the Answers/Solutions to some of the questions
given in the Assignments. These Sample Answers/Solutions are prepared by Tutor for the help of the student
to get an idea of how he/she can answer the questions of the Assignments. Sample answers may be seen as
the Guide/Reference Book/assignment Guide. Any Omission or Error is highly regretted though every care
has been taken while preparing these Sample Answers/Solutions. Please consult you Teacher/Tutor before
you prepare a Particular Answer.
SECTION - I
Q. 1. Explain the policy cycle and highlight its various stages.
Ans. Policy analysis is determining which of various alternative policies will most achieve
a given set of goals in light of the relations between the policies and the goals. However,
policy analysis can be divided into two major fields. Analysis of policy is analytical and de-
scriptivei.e., it attempts to explain policies and their development. Analysis for policy is
prescriptive-i.e., it is involved with formulating policies and proposals (e.g., to improve social
welfare). The area of interest and the purpose of analysis determines what type of analysis is
conducted. A combination of policy analysis together with programme evaluation would be
defined as policy studies.
The six steps to policy analysis includes:
1. Verify, define and detail the problem
State the problem meaningfully
Determine the magnitude and extent of the problem
Continually re-define the problem in light of what is possible
Eliminate irrelevant material
Question the accepted thinking about the problem
Question initial formulations of the problem
Say it with data
Locate similar policy analyses
Locate relevant sources of data
Eliminate ambiguity
Clarify objectives
Resolve conflicting goals
Focus on the central, critical factors
Is it important? Is it unusual? Can it be solved?
Identify who is concerned, and why?
What power do concerned parties have?
Make a quick estimate of resources required to deal with the problem.
3
N
Effectiveness
Equity
Legality
Political acceptability
3. Identify alternative policies
Consider a wide range of options
Consider the status quo, or no-action alternative
Consult with experts
Brainstorming, delphi, scenario writing
Redefine the problem if necessary
4. Assess alternative policies
Select appropriate methods and apply them correctly
Estimate expected outcomes, effectsand impacts of each policy alternative
Do the predicted outcomes meet the desired goals?
Can some alternatives be quickly discarded?
Continue in-depth analysis of alternatives that make the first cut.
5. Display and distinguish among alternatives
Choose a format for display
Show strengths and weaknesses of each alternative
Describe the best and worst case scenario for each alternative
Use matrices, reports, lists, charts, scenarios, arguments
6. Implement, monitor, and evaluate the policy
Draw up a plan for implementation
Design monitoring system
Suggest design for policy evaluation
Was the policy properly implemented?
Did the policy have the intended effect(s)?
Q. 2. Critically evaluate the rational policy-making model.
Ans. Rationality and rationalism are two words used in the literature of social science but
are not practiced in policy making. Rationality is considered as the yardstick of wisdom
in policy making and focuses on the policy making in making a choice among the
policy alternatives on rational grounds. Rational policy making believes in choosing
the one best option.
The Rational Policy-making model is based upon the thought of choosing the one best
option. Different scholars have different views on this aspect:
According to Thomas Dye a policy is rational when it is most efficient. i.e. if the ratio
between the values it achieves and the values it sacrifices is positive and higher than
any other policy alternative.
Robert Haveman analysed that a rational policy is one that is designed to maximize
net value achievement.
4
N
Therefore, the policy-makers should be rational in nature and should have the qualities
like the ability to identify and to determine the goals, ranking the goals in order of importance,
identifying the possible policy alternatives for achieving the goals and also should be able to
do the cost benefit analysis of policy alternatives.
The policy maker should know the society value preferences and the policy alternatives
and should be able to compare the consequences of policy alternative. He should be able to
clarify the goals and objectives and finally should be able to select the most efficient policy
alternatives that match with the goals and objectives.
According to Simon, the policy maker should simplify the problem breaking its complexity
into smaller and understandable parts and then choose the best and satisfactory option. The
process of rational policy making involves the following steps:
Identifying the problem by setting the goal priorities.
Identifying the policy alternatives.
Calculating the cost and the benefits of the alternatives.
Comparing the alternatives and finding the one with the higher benefits.
Finally, selecting the most efficient policy alternatives.
After all this stage comes monitoring while implementing the policy. Then comes the
feedback stage in which the necessary modifications and corrections are made.
Constraints to Rationality: There are many constraints to rational decision-making.
Some of these are as follows:
(i) Accomplishing Goals: Because rational policy making is a difficult exercise, it
becomes very difficult to accomplish goals and therefore it becomes a mere exercise than
the actual realization of set of goals.
(ii) Securing Optimization: The rational policy-making is expected to produce optimal
results. The public interest considered to be more important than being merely the sum of
individual interests in the policy.
(iii)Conflict between Rational Choice and Need for Action: Another constraint to
rationality is the conflict between the rational choice and the need for action. The policy makers
are more concerned with their own rewards in the form of power and are not motivated to
make decisions on rationality basis. The proper time is needed for careful analysis which
becomes short in case of an emergency.
The values of the policy-makers conflict and therefore there is no consensus between
them.
(iv) Dilemma of Political Feasibility: Next constraint to rationality model is the
dilemma of political feasibility. Political feasibility means the probability that however rational
and desirable, a policy option would actually be adopted and implemented by the political
system. The politicians are in a dilemma and uncertain about the consequences of the new
policy which forces them to stick to previous policies. Also the fear of loosing their chance in
re-election, the elected officials do not prefer the rationality in policy-making.
(v) Problem of Cost-Benefit Analysis: Because of fear of social, economic, political
and cultural values at stake, it becomes difficult to analyse the cost-benefit ratios. It is also not
5
N
easy for the policy-maker to assess the alternatives to arrive at rational decisions as it requires
making hard choices. Gathering of information of policy alternatives involves a lot of time and
cost which becomes another constraint in information gathering.
(vi) Nature and Environment of Bureaucracy: The nature and environment of
bureaucracy is another hurdle to policy alternative. Some factors that limits the bureaucracy
includes fragmentation of authority, satisfying personal goals, conflicting values, limited
technology, etc.
To sum up, we conclude that both the analysts and the decision makers are constantly
faced with the conflict between the technically superior and politically feasible alternatives.
After analyzing the rational model, comes the setting of alternatives and choosing the one
that is the best amongst all.
According to some theorists, the rational policy-making is impossible but at the same
time, this mode is useful for analytic purpose as it helps in identifying the constraints to
rationality.
Q. 3. Describe the role of Planning Commission in policy formulation.
Ans. The Indian Constitution in its Directive Principles, relating to economic and social
development assigned the tasks to the government which is directly related to the role of the
Planning Commission. The state has to ensure the growth in production and distribute is
equally amongst the various sections of society. Here comes the role of Planning Commission
which is responsible to formulate the plans for the whole country. Another function of the Planning
Commission is to act as an Advisory Planning Body at the Apex level. Some of the functions
of the Planning Commission according to the Government of India Rules 1961, are as follows:
Planning Commission makes an assessment of the material, capital and human
resources of the country which includes technical, personal and formulation of proposals.
Planning Commission also formulates plan for effective and balanced utilization of the
resources in the country.
Planning Commission defines the stages in which the plan should be carried out and
also the allocation of resources for completion of each stage.
Another important function of Planning Commission is to identify the factors which
tend to retard economic development and determine the conditions which should be
established for the successful execution of the plan.
Planning Commission determines the nature of machinery necessary for the
implementation of the plan.
Planning Commission appraises the progress achieved in the execution of each stage
of the plan and makes the necessary recommendations for the adjustment of the policy.
Planning Commission make interim or ancillary recommendations.
Planning Commission performs the responsibility in the matters of public cooperation
in national development, in specific programme for area development, in perspective
planning, in Institute of Applied Manpower Research and in overall coordination of the
Pradhan Mantri Gramodaya Yojana.
6
N
To sum up, we conclude that except for execution, Planning Commission is responsible in
almost all the aspects of planning. The formulation of plan is a two stage process:
Firstly, preparing a set of objectives or goals to achieve the desired target.
Secondly, deciding the time frame and the stages in which these goals are achieved.
Next step is the estimation of resources, and then the Commission decides on a strategy
to make the best utilization of these limited resources. Thus we can say that following are the
steps involved in the formulation of a plan:
Setting up of priorities
Time frame estimation
Setting the stages involved
Estimation of resources
Finally, deciding a strategy which is the major function of the Planning Commission.
After the formulation of the plan, it is executed through their department i.e. the central
ministries and the state governments. The function of the Planning Commission is to keep
track of the progress of the plan, identify impediments and suggest remedial measures and
finally monitoring and evaluating a plan. P.E.O. or Programme Evaluation Organization
undertake the evaluation details or quick study of the implementation of selected development
programme to assess the impact of the programme. P.E.O. assist the Planning Commission
to provide feedback to the Planners and the agencies which help in the implementation of the
policy and in policy-making.
SECTION - II
Q. 9. Discuss the significance and methods of policy evaluation.
Ans. Evaluation is a wide term and it used in all the spheres of life whether formal or
informal. But appraisal, monitoring and evaluation are different:
Appraisal refers to the critical examination of the programme.
But monitoring and evaluation are undertaken to find out how a programme performs
or has performed.
Monitoring consists of issues of finances, input/output quality, actors and time used in
implementation. The process of monitoring consists of assessing the progress of a project,
the difficulties in obtaining the expected results and finally analyzing the subsequent evaluation.
Evaluation is systematic and scientific progress which emphasized on impacts and efficiency,
effectiveness, relevance, reliability and sustainability.
Policy evaluation is a procedure used to approve the worthwhileness of a policy. Also the
evaluation helps in identifying whether goals of a policy have been achieved or not besides
identifying its constraints. The lack of effectiveness and efficiency leads to poor results. The
changes if need be are suggested in policy evaluation to obtain the desired results. In case
the programme is not effective, it can be scrapped.
Policy evaluation, for a policy maker means the following:
Getting the information and knowledge regarding policy problems.
Effectiveness of the strategies.
Improving the effectiveness of specific policies.
7
N
The process of policy evaluation consists of identifying the policy issues and selecting the
best out of all the alternatives. But in the recent years the process of evaluation has seen
tremendous changes by developing a number of methods. The new methods are based
upon the principles of maximizing income minus costs, non-monetary policy outcomes,
measuring the retarding factors, equity, effectiveness, organizations and human factors, etc.
Policy evaluation has become proactive in the sense that the pre-adaptation projections
methods are issued before and after analysis. Policy evaluation is using the components of
political science, economics, sociology, psychology, law, public administration, business
administration, statistics, social work, behavioural sciences, etc.
Policy Evaluation : Types Aproaches and Methods
Policy evaluation is the most important process in the policy as it helps the policy makers
to know about the utility and the outcomes of the policy. A number of approaches and
methodology have been identified by the scholars to evaluate the policies.
Types of Evaluation: According to Daniel Lerner, following are the different types of
evaluation:
Process Evaluation refer to whether a specific policy has been implemented in
accordance with the policy guidelines or not.
Impact Evaluation refer to the attempts to evaluate the changes, in terms of goals.
Comprehensive Evaluation is the combination of both the process evaluation
and the impact evaluation and is more useful in terms of public policy.
Evaluation: Approaches: Policy evaluation is concerned with the aspects like describing,
judging and explaining policies, their formulation, implementation and outcomes. The routine
approaches to the policy evaluation are:
Front-End Analysis refers to the kind of work undertaken before any decision.
Evaluability Assessment in this the comparison of policys assumption is made
with the stated goals and objectives of the policy.
Process Evaluation helps in describing and analyzing the processes of implemented
policies, strategies adopted, cost incurred, problems faced and nature of interaction
with the clients and other concerned organizations.
Effectiveness Evaluation helps in finding out the goodness or badness of the
implemented policies, its outcome and the visible changes, etc.
Evaluation Synthesis Approach (ESA) helps in serving the there kinds of evaluation
purposes i.e. formulation, implementation and accountability.
Methods of Evaluation: There are various methods in the society for studying the
structures and changes of phenomena, these may also be used as methods of evaluation.
Quantitative and Qualitative approaches are used in evaluation studies in which quantitative
analysis is used primarily for measuring effects and impacts and are most commonly used in
policy evaluation which includes benefit cost analysis, cost effectiveness analysis, experimental
designs and statistical surveys. Let us now study each type of analysis.
(i) Benefit - Cost Analysis: According to Stokey and Zeckhauser, benefit-cost analysis
is used to evaluate public expenditure decisions. This type of analysis requires systematic
8
N
enumeration of all the benefits and all the costs. The net gain is identified when the analyst
subtracts the total cost of each alternative from the total sum of its benefits.
According to Rosse and Freeman (1993), the five means of monitoring benefits are:
Market valuation.
Direct measurement.
Economic estimation (indirect quantification based on explicitly stated assumptions).
Observing political choices (transforming observed political prioritization into some
judged indicated monetary value.
Hypothetical questions (asking target people, how they consider basically non-monetary
benefits to be worth in monetary terms).
(ii) Cost-Effectiveness Analysis: The cost-effectiveness analysis is used for evaluating
various alternatives in terms of the degree to which they efficiently lead to the fulfillment of
stated objectives. This type of analysis is simple compared to Benefit Cost Analysis. The
most important use of this policy is comparing proposed alternative policies and for evaluating
the current or previous policies. Rossi and Freeman said that analysis is similar to benefit-
cost analysis (in its conventional form) but in this analysis monetizing is required only of the
costs and the benefits are expressed in direct outcome units.
(iii) Experimental Method: Experimental Method believes in an ideal laboratory like
situation in which some units are randomly selected, those who have received some services
under the policy measures while others have not received it. In this method, the comparative
analysis is done between the samples of different groups i.e. those who have received and
those who have received and those who have not received. Then the difference of impact is
studied and the statistical method is used for testing the data for significant levels.
(iv) Statistical Surveys: In social research and policy evaluation survey is most commonly
used method and is quite useful. In this method, information or data is collected and then
analysed using the sampling techniques, questionnaires and interviews. After collecting all
the variables, suitable hypothesis is developed. Different groups possessing different
characteristics like level of education, income, age, sex, etc. are selected and then changes
are sought and the different characteristics of the samples are tested statistically. The three
types of designs that are used to study the changes from different angles over the different
time periods are trend design, cohort design and panel design.
(v) Qualitative Methods: The Qualitative approach is used in the situations in which the
information cannot be quantified. According to Dale, a qualitative approach is necessary in
the following situations:
When it is not possible to study statistically representative samples of beneficiaries.
When changes are the result of complex processes, involving many interrelated factors.
For analyzing relevance, due to the value judgments involved.
When studying the organizational issues (involve in policy implementation).
(vi) Model Building: A model consists of a series of tables or graphs which systematically
displays and weighs the relevant data and helps in effectively evaluating the cost and benefits
associated with any given policy. Some modes are made up of mathematical equations and
9
N
computer simulations. These models help in gaining or evaluating the insight into the value of
a given policy or alternatives that apply their judgement and experience.
Q. 10. Examine the disinvestment policy of India.
Ans. The charactersitics for the process of disinvestment for the period from 1991 to
2005 is as follows:
(i) Period I1991-92 to 1997-98: In 1991, the CPEs disinvestment got a boost from the
industrial policy and the government holdings in selected public enterprises were to be
disinvested up to 20% of equity in mutual funds, investment institutions in public sector. The
idea behind disinvestment was to raise the resources, introduce market sensitivity to improve
the performance of the enterprises and for attracting wide public participation.
Also the process of disinvestment involved auction in which bids were invited. The process
was a part of annual budgetary exercise and the sale process was carried out during the
period of the validity of the budget. In the year 1996, a disinvestment commission was set up.
Disinvetment during the period was mainly confined to profitable enterprises.
(ii) Period II Year 1998-99: During this period, different alternative proposals of
disinvestments included Special Purpose Vehicle (SPV), sale of shares of financial and
share cross-holdings. During the year, disinvestment was mainly through shares cross-holding
among IOC, ONGC and GAIL. The disinvestments had no positive effect on economic reforms
in this period.
(iii) Period III 1999-00 to 2003-04: During this period the word privatization was used
for the first time in the budget speech and the policy was to encompass a judicious mix of
strengthening strategic units, privatizing the non-strategic ones through gradual disinvestments
or a strategic sale and devising a viable rehabilitation package for weak units. PEs were
classified as strategic and non-strategic for the purpose of disinvestment. The disinvestment
during this period was characterized as strategic sale in which a substantial stake in an
enterprise was sold along with the management control to a bidder who was expected to
complement the exiting strength of an enterprise with a view to impart the long-term viability.
In the year 1999, a Department of Disinvestment was established which aimed at laying
down a systematic policy approach to disinvestments and privatization and to give an impetus
to the disinvestment programme.
In the budget speech of the Finance Minister for the year 2000-01, the Government policy
towards public sector was amplified. Also it elaborated on the disinvestments/privatization/
public sector restructuring as:
Restructure and revive potentially viable PEs.
Close down PEs, which cannot be revived.
Bring down government equity in all non-strategic PEs to 26% or lower.
Fully protect the interests of the workers.
In a statement laid down before the parliament in 2002, it was said, that the main objective
of disinvestment is to put the national resources and assets to the optimal use and in particular
to unleash the productive potential interest in our public sector enterprises.