3.6 Public policy: formulation process and analysis

Public Policy: Formulation Process and Analysis (Nepalese Perspective)

Concept of Public Policy

Public policy refers to the decisions made by a welfare state, based on public opinion, to promote the interests of citizens regarding what to do or what not to do. It is a comprehensive, goal-oriented, and result-driven roadmap adopted by the government for the holistic welfare and development of the nation and its people.

Public policy is the commitment or declaration made by the government to fulfill promises made to citizens. It is a purposeful action taken by an authorized entity to address specific issues or problems, through which the government mobilizes services, facilities, and rights for citizens.

It is a set of values or ideas issued by an authorized body for the benefit of society, taking into account political, economic, social, and cultural conditions. Public policy reflects what the government intends to do or not do and is a collection of long-term decisions or actions taken by the government or its officials for the public good.

Understanding Public Policy

• Decisions made by the government on matters of public concern.
• Formally issued by authorized officials or bodies.
• Serves as the government's roadmap.
• Decisions based on public opinion to govern the state.
• The foundation for state governance.
• A pre-determined course of action.
• Actions based on political will for the welfare of citizens.
• Guidance for managing state affairs.
• A means to enhance public accountability.
• An action plan guided by social norms and values.
• A bridge connecting the government and the public.

Public policy is a combination of laws, regulations, strategies, and other related factors. It is shaped over time by lessons from the past, advocacy groups, pressure groups, and national/international contexts. The process is dynamic and complex, often conducted through public forums, helping to identify and address public issues. Public policies can be political, economic, social, or cultural in nature.

Main Features of Public Policy

1. Legislative Power

Public policy is primarily rooted in politics, though it is a joint effort of public administration and politics (Public Administration + Politics = Public Policy). Elected representatives, endowed with three key powers by the public, are responsible for policy formulation:

1. Economic authority (imposing and collecting taxes).
2. Authority to limit autonomy as per the law.
3. Authority to regulate activities (if they violate social norms).

Public policy is formulated only by the legislature (or its delegated bodies) using these powers.

2. Uniformity

Since public policy is formulated by elected representatives, it applies uniformly to all citizens, ensuring equal treatment.

3. Coercive Power

Compliance with public policy is mandatory for all individuals (legal and natural persons). Non-compliance may result in the use of coercive power to enforce adherence.

4. Goal-Oriented

All public policies aim to achieve specific government objectives, designed to fulfill the state's welfare goals. The government uses policies to implement programs and achieve its targets.

5. Result of Government Action

Public policy is the collective outcome of all government actions, integrating the efforts of government officials in policy formulation and implementation.

6. Various Forms

Public policy can take forms such as laws, notices, ordinances, judicial decisions, executive orders, or court rulings, based on the government's decisions to act or refrain from acting.

7. Depicts Government Concern

Public policy addresses societal problems, reflecting the government's commitment and priorities. Failure to address issues through policy signals a lack of government empathy or concern for citizens.

Need for Public Policy

• To fulfill the state's directive principles as outlined in the constitution.
• To enhance the state's vitality, effectiveness, and activity.
• To perform state functions (economic, social, political, and developmental) by providing access, empowerment, equity, and security to all citizens.
• To regulate public activities.
• To build a change-oriented society.
• To promote public interest and importance.
• To strengthen the rule of law.
• To establish accountable governance.

Types of Public Policy

1. Constituent/Substantive

Policies outlined in the constitution that influence all sectoral policies, e.g., the 13 policies under Article 51 of Nepal's Constitution.

2. Regulative

Policies aimed at transforming the government's role, e.g., policies related to quality, health, and education.

3. Distributive

Welfare policies targeting specific groups, e.g., social security, inclusion, affirmative action, reservation, and land reform policies.

4. Redistributive

Policies that transfer resources from the affluent to the underprivileged, e.g., progressive tax policies.

Sources of Public Policy

Internal Sources

• Constitution (preamble, directive principles, policies, fundamental rights, other provisions).
• Periodic plans.
• Customs and traditions.
• Political party manifestos.
• Media and publications.

External Sources

• International laws, treaties, agreements, declarations.
• International practices.
• International organizations.

Public Policy Formulation Process (Policy Cycle)

1. Agenda Setting

• Identifying visionary or pressing public concerns.
• Prioritizing existing problems and needs.
• Assessing the severity of issues and available resources/capacity.
• Evaluating the legal basis for policy implementation.
• Preparing the agenda.
• Consulting with stakeholders.

2. Policy Formulation

• Policy Demand: Identifying the need for a new policy.
• Policy Drafting: Preparing a draft policy.
• Policy Analysis: Analyzing the draft to ensure it meets demands.
• Policy Approval: Finalizing and approving the policy.

3. Adoption

After approval by the cabinet or parliament, the policy is disseminated to the public. Policies that align with societal and political contexts are more easily adopted and implemented.

4. Policy Enforcement/Implementation

Translating policy into action through appropriate mechanisms and strategies.

5. Policy Monitoring/Evaluation

Continuously assessing the policy's implementation and effectiveness.

6. Support/Maintenance

Providing ongoing support and making necessary adjustments to ensure policy success.

Stages of Policy Formulation

1. Policy Demand

Policy demands arise from:

• Public demand for new policies (Bottom-Up Approach).
• Government recognizing the need for new policies (Top-Down Approach).
• International/national commitments requiring new policies.
• Contingent needs for managing immediate situations.
• Proactive political vision.

2. Policy Drafting

Drafting involves analyzing the gap between policy demand and existing policy supply, ensuring the draft addresses the demand. It requires collaboration among:

• Policy Partner: Politicians.
• Development Partner: Bureaucrats and policy experts.
• Delivery Partner: Public/stakeholders.

Key considerations during drafting:

• Maximizing resource productivity.
• Increasing governance effectiveness.
• Promoting social accountability.
• Ensuring resource carrying capacity.

3. Policy Analysis

Policy analysis is the crux of public policy, ensuring the draft reflects public needs and is contextually relevant. It involves stakeholders and experts to assess whether the draft meets demands. Analysis is based on:

a. Understanding

Informing stakeholders about the draft's provisions and ensuring it addresses their demands, using feedback to finalize the draft.

b. Examination

Testing the draft's feasibility based on:

• Political Situation: Alignment with the current political context.
• Administrative Situation: Capacity of administrative mechanisms to implement.
• Socio-Cultural Situation: Social and cultural acceptability.
• Technological Situation: Feasibility with available technology.
• Economic Situation: Economic viability and affordability.
• International/External Situation: Alignment with national/international commitments.
• Access: Equal access for all citizens.
• Acceptance: Stakeholder acceptability.
• Affordability: Ability to bear economic and social obligations.
• Applicability: Practicality of implementation.
• Equity: Fair distribution of benefits across all groups.
• Efficiency: Improved outcomes relative to investment.
• Effectiveness: Achievement of objectives and societal satisfaction.

c. Projection

Based on feedback, context, and analysis, the policy is refined to ensure it is effective and implementable.

4. Policy Making/Approval

The final stage involves refining and approving the policy through the legislature, granting it legal validity.

Policy Making Models

• Open Model: Transparent input-process-output with full stakeholder participation (e.g., constitution-making).
• Close/Black Box Model: Limited stakeholder participation in the process phase, focusing only on input and output (e.g., policies on economic stability, security, or rights curtailment).

Policy Making Approaches

• Political Stream: Direct policy-making without completing the full policy cycle, suitable for urgent or politically driven policies (e.g., Kamaiya emancipation).
• Public Policy Analysis Stream: Following the full policy cycle with bureaucratic involvement.

Basis for National Policy Formulation in Nepal

• National interest (Article 5), fundamental rights (Part 3), and directive principles (Part 4) of the Constitution.
• State obligations to make Nepal prosperous by implementing directive principles (Article 52).
• Government of Nepal’s Rules of Business and Performance.
• Poverty alleviation and social justice as core principles.
• Participation and inclusion in policy-making.
• Broader national and public interest.
• Equity and inclusion.
• Rule of law.
• Human rights guarantees.
• Transparency, objectivity, accountability, and integrity.
• Economic discipline and corruption-free, efficient, people-oriented administration.
• Neutrality and impartiality of administrative mechanisms.
• Public access to administration and decisions.
• Decentralization and delegation of authority.
• Public participation and optimal use of local resources.
• Economic liberalization.
• Poverty alleviation.
• Social justice.
• Sustainable and efficient management of natural and public resources.
• Women’s empowerment and gender justice.
• Environmental protection.
• Upliftment of indigenous, Dalit, and marginalized communities.
• Development of remote areas and balanced regional development.

Principles of Public Policy Formulation and Their Application in Nepal

1. Process Theory

• Elite Theory: Policy-making through the participation of the enlightened class representing public needs.
• Group Theory: Policy-making based on competition and consensus among stakeholders.
• System Theory: Policy-making based on collaboration between internal/external factors and systemic processes.
• Institutional Theory: Policy-making through specialized government institutions.
• Populist Theory: Policy as a tool for gaining popularity.
• Institutional Anarchism Theory: Policy-making driven by powerful groups for their interests.
• Functional Theory: Logical and systematic policy-making from issue identification to evaluation.

2. Output Theory

• Incremental Theory: Gradual policy development through marginal adjustments or logical incrementalism.
• Rational Theory: Comprehensive or bounded rational approaches.
• Mixed Scanning Theory: Combining incremental and rational approaches.

3. Strategic Theory

• Analyzing risks and opportunities for policy formulation.
• Entrepreneurial Theory: Mini-Maxi (low risk, high benefit) or Maxi-Maxi (high risk, high benefit).
• VMGOS Model: Vision, Mission, Goal, Objectives, and Strategy.
• Adoptability Theory: Policies aligned with societal and environmental contexts.

Application in Nepal

Due to the lack of a meta-policy, Nepal's policy formulation lacks a clear theoretical basis, often driven by necessity or pressure groups. Observed practices include:

• Rational Theory: Economic, social, and political policies.
• Incremental Theory: Annual development programs and budgets.
• System Theory: Governance reform policies.
• Group/Elite Theory: Industry and commerce policies.
• Strategic Theory: Periodic plans (VMGOS model).
• Institutional Theory: Policy and plan formulation by the National Planning Commission (NPC).

Policy Enforcement

Policy enforcement involves translating policies into practice. Key activities include:

• Creating a conducive environment through dissemination, sensitization, advocacy, awareness, internalization, adoption, consensus building, and orientation.
• Executing the policy through:
• Strategic Enforcement: Formulating laws, strategies, and plans; collaborating with civil society, political parties, and private sectors.
• Institutional Enforcement: Structural arrangements, capacity building, coordination, and monitoring mechanisms.
• Operational Enforcement: Developing guidelines, procedures, and resource management.
• Behavioral Enforcement: Developing human resources, fostering political and administrative commitment, and promoting collective spirit and motivation.

Behavioral enforcement addresses varying levels of stakeholder engagement, ensuring awareness, motivating indifferent groups, and using coercive measures for resistant groups to ensure compliance.

Policy Monitoring

Policy monitoring involves continuous observation, inspection, and regulation to enhance policy functionality, implementation, and adaptability. Types include:

• Monitoring of dead policies (unimplemented).
• Monitoring of sick policies (partially implemented or stalled).
• Monitoring of ongoing policies.

Types of Monitoring

• Enforceability Monitoring.
• Output Monitoring (Quantitative).
• Outcome Monitoring (Qualitative).

Policy Evaluation

Evaluation measures the gap between policy objectives and outcomes, serving as feedback for future processes. Types include:

• Formative Evaluation: Evaluability and needs assessment.
• Process Evaluation: Program monitoring.
• Outcome Evaluation: Objectives-based evaluation.
• Economic Evaluation: Cost analysis, cost-effectiveness, cost-benefit, and cost-utility analysis.
• Impact Evaluation: Assessing broader impacts.

Evaluation Areas

• Effectiveness: Benefit levels and returns on investment.
• Efficiency: Achievements and societal satisfaction.
• Equity: Fair distribution of benefits.
• Accountability: Public satisfaction and opinion.
• Appropriateness: Suitability of objectives, strategies, and programs.
• Adequacy: Investment levels and flow.

Policy Compliance

Effective policy implementation requires compliance, which depends on:

• Legitimacy.
• Alignment with public interest.
• Coercive measures for non-compliance.
• Respect for rights.
• Acceptance of authority.
• Rationality and relevance.
• Meaningful public participation.
• Awareness.

Reasons for Non-Compliance

• Socio-cultural values.
• Economic, social, cultural, administrative, technical, and political factors.
• Governance behavior.
• Ambiguity or lack of clarity.
• Lack of understanding.
• Conflicting interests.
• Internal contradictions.

Role of Administration in Policy Formulation, Implementation, and Monitoring/Evaluation

The administration is the key agent in providing technical and administrative finalization to public policy, playing a critical role in all stages.

Role in Policy Formulation

• Identifying policy demands.
• Managing information effectively.
• Providing expert support.
• Advising and recommending to politicians.
• Analyzing policy demand and existing policy supply.
• Ensuring stakeholder and expert participation.
• Collecting stakeholder feedback on drafts.
• Analyzing drafts for political, administrative, socio-cultural, technical, and economic feasibility.
• Preparing proposals.

Role in Policy Implementation

• Creating a conducive environment through dissemination, sensitization, advocacy, and orientation.
• Implementing policies per their intent.
• Providing legal and regulatory support to politicians.
• Managing institutional, organizational, and human resources.
• Formulating and implementing monitoring plans.
• Mobilizing public participation.
• Coordinating with stakeholders.

Role in Policy Monitoring and Evaluation

• Preparing monitoring checklists and conducting monitoring.
• Developing effective monitoring mechanisms.
• Reviewing weaknesses and adopting improvement strategies.
• Providing feedback for future policies.

Problems and Challenges in Policy Formulation, Implementation, and Monitoring/Evaluation

Global Context

• Global interconnectedness and independence of public policy.
• Unpredictable issues.
• High public expectations.
• Expensive use of ICT.

Nepalese Context

1. Policy Demand

• Predominance of top-down approaches.
• Elite capture in policy demands.
• Ambitious or unrealistic demands.

2. Policy Drafting

• Lack of gap analysis between demand and supply.
• Lack of coordination among politicians, bureaucrats, and stakeholders.
• Low stakeholder participation.
• Neglecting contextual and environmental factors.
• Failure to analyze political, administrative, socio-cultural, technological, economic, and external factors.

3. Policy Analysis

• Lack of stakeholder and expert feedback.
• Failure to analyze accessibility, affordability, applicability, adequacy, equity, efficiency, and effectiveness.
• No review of past policies.
• Lack of SWOT analysis.

4. Policy Making/Approval

• Absence of a meta-policy.
• Lack of entrepreneurial approaches (Maxi-Maxi).
• Limited use of Public Choice Theory.
• Failure to use logical incrementalism.
• Adoption of blueprint models contrary to context.
• Policy-making through political streams.
• Policy changes driven by political instability.

5. Policy Enforcement

• Implementation without creating a conducive environment.
• Lack of sensitization, orientation, and internalization.
• Absence of strategic, institutional, procedural, and behavioral readiness.
• Lack of clear implementation plans.

6. Policy Monitoring and Evaluation

• Lack of monitoring and evaluation plans.
• Failure to adopt result-based monitoring systems.
• Lack of sectoral coordination.
• No impact or sustainability evaluations.
• Lack of feedback mechanisms for future policies.
• Absence of Key Performance Indicators (KPI) and Incentive-Linked Indicators (ILI).

Prospects for Successful Policy Implementation in Nepal

• Increasing public awareness and understanding.
• Efforts to identify government priorities and scope.
• Governance reform and good governance initiatives.
• Growing collaboration among government, civil society, private sector, and NGOs (PPP).
• Increasing use of ICT.
• Rising social awareness and participation.
• Enhanced bureaucratic capacity (cultural competency).
• Development and prosperity as central political issues.

Way Forward

• Develop a meta-policy for policy formulation.
• Create contextually relevant and ecology-friendly policies.
• Ensure coordination and meaningful participation of policy partners (politicians), development partners (bureaucrats), and delivery partners (public/stakeholders).
• Promote policy compliance through awareness and preparatory activities.
• Develop third-party and joint monitoring/evaluation systems.
• Create policy response mechanisms.
• Establish institutional mechanisms like Policy Cluster, Strategic Policy Unit, Policy Analysis Unit, Policy Research Wing, Policy Dialogue Forum, and Policy Monitoring Unit.
• Develop the National Planning Commission (NPC) as a policy development think tank.

Questions for Practice

1. Discuss the role of administration in public policy formulation, analysis, and implementation.
2. Mention the sources of public policy and substantiate the utility of policy analysis.
3. Highlight the role of public administration in policy monitoring and evaluation, and identify challenges in Nepal’s public policy process.
4. Define public policy and present the public policy formulation process.
5. It is observed that while public policy formulation in Nepal is given due importance, its implementation is often weak and haphazard. Analyze this statement and present your views.
6. The core elements of policy formulation are the policy subject and context. In Nepal’s context, what balance exists between these elements? How can imbalances between these elements in policy formulation and implementation be addressed? Provide suggestions in Nepal’s context.