Public Policy Analysis

MPA 404 Lecture 5

Brief Summary of previous lecture

Remaining models of the Public Policy, namely the Group Theory, Elite Theory, Public Choice Theory and the Game Theory

In Public choice theory, we went through a brief article about how a former Vice President of the USA (a highly influential public figure at that time) used his influence to win himself and his firm some favors.

Game Theory. The typical Game Theory Matrix

Different perspectives on Public Policy

We went through some very typical perspectives on Public Policy perspectives in the previous lectures. These included the theoretical foundations and the general categorization of theories into eight groups.

But there are other aspects that are not discussed a lot but may prove to be equally important.

These are the Comparative, Cultural and Ethical Perspectives. But before we do that, let us check on today’s reading. This is a bit

unique case of public policy, because it involves cognition, psychology, medical assumptions, behavior, etc.

Read Richard Thaler’s ‘Public Policies, Made to Fit People’

Hope you’ve jotted down important insights from the article. Notice that the person is talking about public policy from a

behavioral research perspective, which primarily belongs to Psychology. What he tells us is that based on some past experiences (like poor children learning less words) and observed phenomenon/behavior (people not following their medical routine), there is a need to change public policy for better outcomes.

One interesting aside of making informed judgments based on behavior is that it will save us a lot of resources. Since we know how or why the target population behaves, we can implement a policy knowing very well what the reaction of target population will be.

This is another, interesting perspective because there is no such thing as a cost-benefit analysis or a sophisticated software involved. Its just behavioral, psychological research based on observation and simple data. Thus, as I stated earlier, there are many ways of analyzing a public policy. By suing behavior, he addresses three important public policy fields: education, health and domestic violence.

Comparative Public Policy Analysis Why a comparative public policy analysis? Its main strength is that it

allows us to study counterintuitive arguments that tend to defy embedded examples or logic. In other words, it helps us to compare similar patterned/intentioned policies across geography and see whether these meant anything or is there any lesson in it?

Let’s take a simple example, railway in Pakistan and Railway in India. On one side we have a system that gobbles up billions of rupees of state funds (without any outcome or improvement). On the other side, the railway is earning billions of rupees in revenue for the government. So we have a white elephant on our side and gold mine on the other. Why the difference?

The textbook contains Jamica’s example of establishment of a good Telecom network due to proper regulation. But in Pakistan, we have an opposite example where regulation in Telecom sector led to a loss of millions of $’s in investment and government had ultimately to withdraw the policy (we’ll go through an article on this by Ali Salman later).

Remember that conditions do not remain the same since the variables in an equation may change. So comparisons provide us with a kind of natural experiment in the light of inability to conduct real experiments.

What we are doing is drawing inferences, which means a conclusion.

Used extensively in what we call cross-country, cross-time and cross-cultural studies. For example, famous textbook of Robert Barro and Xavier Martin on Economic Growth contains scholarly research on the dynamics of growth across nations. They consider several factors and take their data through sophisticated testing techniques to come to their conclusions.

These comparative studies are helpful on several counts, as discussed above. But we must be very careful in our discussion and conclusions.

This is simply because conditions across countries, especially at the micro level vary tremendously.

The textbook mentions one factor in this regard (official data) which is usually manipulated in many countries in order to make it look good to outside world. we will later go through some examples/articles in this regard.

Meanwhile, read the blog entry titled ‘Useless Comparisons’ at shershahsuree.blogspot.com. You are going to come across some examples of why comparisons, in certain circumstances, are a waste of time and not a good strategy.

So then the question remains: what’s the use of comparisons? Learning lessons and drawing general conclusions, not specific ones. These general conclusions may apply to a country or not.

Don’t forget to go through the readings on the textbook on this stuff especially the domains of comparative understanding.

Last, but not the least, there is an attached podcast again for you. This time it deals with the birth of an important institution in the US, its central bank (known world over as the Federal Reserve).