2.3 Policy Formulation and Decision Making

Policy formulation and decision making are crucial stages in the policy process. They involve developing solutions, assessing alternatives, and selecting the best course of action to address policy problems. These stages follow agenda setting and precede implementation and evaluation.

Various decision-making models explain how policies are formulated. These include rational, bounded rationality, incremental, and garbage can models. Evidence, expertise, and values play key roles in shaping policy decisions, while bargaining and compromise help resolve conflicts among stakeholders.

Policy formulation process

Key components and stages

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• Develop effective and acceptable courses of action for addressing policy agenda items
• Identify policy alternatives, assess potential solutions, select policy instruments, and design policy implementation
• Follows problem definition and agenda setting, precedes policy implementation and evaluation in the policy cycle
• Identify a set of policy alternatives for addressing a problem, then narrow that set of solutions in preparation for the final policy decision
• Policy alternatives are competing proposals for dealing with a policy problem (executive orders, court decisions, legislative acts, other measures)

Assessing policy alternatives

• Evaluate feasibility, political acceptability, costs and benefits, and potential intended and unintended consequences of policy alternatives
• Policy instruments are the means or devices used to achieve policy goals
  • Authority
  • Incentives
  • Capacity-building
  • Symbolic acts
  • Learning

Decision making models

Rational and bounded rationality models

• Rational-comprehensive model assumes policymakers identify all possible policy alternatives, evaluate their consequences, and select the option that maximizes societal gains
  • An ideal rather than a realistic portrayal of policymaking
• Bounded rationality model recognizes limitations policymakers face (time constraints, incomplete information, cognitive biases)
  • Leads them to choose satisfactory rather than optimal solutions

Incremental and garbage can models

• Incremental model views policy as a continuation of past government activities with minimal changes
  • Policymakers focus on alternatives that differ marginally from existing policies to reduce uncertainty and conflict
• Garbage can model portrays organizations as organized anarchies where problems, solutions, and participants are dumped into a "garbage can"
  • Decisions are made when problems, solutions, participants, and choice opportunities align

Multiple streams model

• Identifies three streams in agenda setting and policy formation: problems, policies, and politics
• Policy change happens when a "policy window" opens, joining the streams

Evidence, expertise, and values in policy

Role of evidence

• Evidence is the body of knowledge and information relevant to a policy issue (scientific research, program evaluations, statistical data, stakeholder input)
• Use of evidence in policymaking influenced by availability and credibility of evidence, policymakers' receptivity to evidence, and political climate

Influence of expertise

• Expertise is specialized knowledge and skills possessed by individuals or organizations in a particular field
• Policy experts provide technical advice, help define problems, and identify potential solutions
• Influence of expertise depends on perceived credibility and relevance of experts, their ability to communicate effectively with policymakers, and degree of technical complexity of the issue

Impact of values

• Values are principles, beliefs, and ideals that guide individual and societal decision making
• Shape problem definition, policy goals, and criteria used to evaluate policy alternatives
• Policymakers' values influenced by personal experiences, political ideologies, and values of constituents and stakeholders
• Conflicts can arise when evidence and expertise are at odds with deeply held values, policymakers may prioritize values over evidence

Bargaining and compromise in policy decisions

Importance of bargaining and compromise

• Essential processes in policy formulation, help resolve conflicts and reach agreements among stakeholders with diverse interests
• Bargaining involves negotiation, concession-making, and trading of resources or support to reach mutually acceptable solutions
  • Requires identifying each party's interests, resources, and "best alternative to a negotiated agreement" (BATNA)

Types of bargaining

• Distributive bargaining is a competitive process where parties seek to maximize their own gains, often resulting in a zero-sum outcome
  • More likely in one-off interactions or when resources are fixed
• Integrative bargaining is a collaborative process where parties seek to create value and find win-win solutions
  • Involves open communication, trust-building, and a focus on shared interests

Role of compromise

• Each party makes concessions and accepts a less-than-ideal outcome to reach an agreement
• Necessary when parties have conflicting interests but a shared desire to avoid an impasse
• Factors influencing success of bargaining and compromise (balance of power among parties, degree of trust and communication, availability of resources, urgency of the issue)
• Policy entrepreneurs facilitate bargaining and compromise by reframing issues, building coalitions, and creating value for all parties involved