In “The Paradox of Policy Analysis: If It Is Not Used? Why Do We Produce So Much of It?” Nancy Shulock addresses these dual questions by arguing that the role of policy analysis in the policy making process has changed. It is no longer being used for problem solving as was originally intended; rather policy analysis supports and promotes discourse among policy actors by highlighting and clarifying specific issues. Lawrence Mead in “The Interaction Problem in Policy Analysis” explains why in the interaction of analysis and problems in the policy making process causes problems to change. While both authors are clearly discussing different issues, in addressing these issues they allude to a much deeper issue in policy analysis that is the dominance of economic theory in policy analysis. I have two concerns regarding this issue: firstly as policy analysis addresses issues that affect multiple aspects of human life, stronger consideration should be given to other equally relevant areas of theory. Secondly much of mainstream economic theory can be criticized for making assumptions that are unrealistic and unreflective of the real world therefore to allow an entire analytical field to be guided by these theories are a grave mistake. In this paper building on some of the arguments raised in Mead (1983) and Shulock (1999) I argue that policy analysis is not being used as a problem-solving tool because it is based on methods that rely on unrealistic assumption that generate results with limited real-world applications.
Mead (1983) asserts that the common criticisms of the use of economic paradigm are in the realism of its assertions and the calculations required. He references Wildavsky (1979), Lindbolm (1959), Trible (1972) and Allison and Halgrave (1971 and 1975) in summarizing the key arguments against the dominance of economic theory in policy analysis. Economic analysis assumes; political decisions are aimed at satisfying optimal not salient constituents, there are no limits on the information that policy makers can access, as economic consequences are easiest to measure policy analysis ignores other value areas, and it ignores the administrative and implementation dimensions of policy making. Perhaps no-where else are these issues blatantly clearer than in the design and implementation of unemployment policy. Unemployment policy is intended to achieve a single goal that is to reduce unemployment. Based on this goal a myriad of policies have been designed and implemented from employer-focused policies to worker-centered policies such as unemployment insurance program.
Despite its name Unemployment Insurance is not only intended to provide workers with income protection during job loss its larger goal is to keep workers in the labor force and actively looking for new employment. From this perspective its aim is simply to keep unemployment low. Possibly from its inception this program had been criticized for not achieving its goal largely because of weaknesses in the design of the policy. In addressing the issue of unemployment analyst sort specifically to find ways to induce people to find new employment as quickly as possible so they included restrictions on the length of time and quantity of benefits received. This was directly based on the assumption that rational workers facing reduced income would strive to re-enter formal employment as quickly possible. What was instead observed was that workers often chose to stay unemployed for as long as it was legally possible and loss of skill actually resulted in exit from the labor force entirely. In fact most states eventually increased benefit durations and replacement rates based on yet another misguided assumption that workers did not re-enter employment and in some cases left the labor force because the job-search time was too short. Very few economists and even less policy analysts in this area have considered the fact that workers cannot act rationally.
Rational choice requires among other things perfect knowledge about the existence and results of all possible alternatives. Human being in general and in this case workers specifically simply do not possess the processing capacity to collect and evaluate all possibilities therefore it is impossible for us to think and act rationally in the economic sense. If one applies a more behavioral or socio/psychological perspective which would assume that the actions of the worker will be guided by a more complex string of factors both internal such as emotion and self satisfaction to external the need to provide shelter and food then the outcomes of decisions regarding policy can be better analyzed. Not to mention emphasis in the analysis and design of policy will shift from influencing the organism to examining how the organism is affected, which will certainly improve the analysis and design of policy.
While Shulock (1999) does make the valid point that though policy analysis is no longer being used for its original purpose it is still being used. One must ask: Why was the shift necessary in the first place? The answer I would offer is that the product of policy analysis is often so misleading due to its unrealistic base assumptions that it has simply been relegated to the role of information provision, even in this role I would be weary of its ability as well.
References
Shulock, Nancy, “The Paradox of Policy Analysis: If It Is Not Used, Why Do We Produce So Much of It?” Journal of Policy Analysis and Management, 18(2), 1999
Mead, Lawrence M., “The Interaction Problem in Policy Analysis,” Policy Sciences, 16(1), 1983
Mead (1983) asserts that the common criticisms of the use of economic paradigm are in the realism of its assertions and the calculations required. He references Wildavsky (1979), Lindbolm (1959), Trible (1972) and Allison and Halgrave (1971 and 1975) in summarizing the key arguments against the dominance of economic theory in policy analysis. Economic analysis assumes; political decisions are aimed at satisfying optimal not salient constituents, there are no limits on the information that policy makers can access, as economic consequences are easiest to measure policy analysis ignores other value areas, and it ignores the administrative and implementation dimensions of policy making. Perhaps no-where else are these issues blatantly clearer than in the design and implementation of unemployment policy. Unemployment policy is intended to achieve a single goal that is to reduce unemployment. Based on this goal a myriad of policies have been designed and implemented from employer-focused policies to worker-centered policies such as unemployment insurance program.
Despite its name Unemployment Insurance is not only intended to provide workers with income protection during job loss its larger goal is to keep workers in the labor force and actively looking for new employment. From this perspective its aim is simply to keep unemployment low. Possibly from its inception this program had been criticized for not achieving its goal largely because of weaknesses in the design of the policy. In addressing the issue of unemployment analyst sort specifically to find ways to induce people to find new employment as quickly as possible so they included restrictions on the length of time and quantity of benefits received. This was directly based on the assumption that rational workers facing reduced income would strive to re-enter formal employment as quickly possible. What was instead observed was that workers often chose to stay unemployed for as long as it was legally possible and loss of skill actually resulted in exit from the labor force entirely. In fact most states eventually increased benefit durations and replacement rates based on yet another misguided assumption that workers did not re-enter employment and in some cases left the labor force because the job-search time was too short. Very few economists and even less policy analysts in this area have considered the fact that workers cannot act rationally.
Rational choice requires among other things perfect knowledge about the existence and results of all possible alternatives. Human being in general and in this case workers specifically simply do not possess the processing capacity to collect and evaluate all possibilities therefore it is impossible for us to think and act rationally in the economic sense. If one applies a more behavioral or socio/psychological perspective which would assume that the actions of the worker will be guided by a more complex string of factors both internal such as emotion and self satisfaction to external the need to provide shelter and food then the outcomes of decisions regarding policy can be better analyzed. Not to mention emphasis in the analysis and design of policy will shift from influencing the organism to examining how the organism is affected, which will certainly improve the analysis and design of policy.
While Shulock (1999) does make the valid point that though policy analysis is no longer being used for its original purpose it is still being used. One must ask: Why was the shift necessary in the first place? The answer I would offer is that the product of policy analysis is often so misleading due to its unrealistic base assumptions that it has simply been relegated to the role of information provision, even in this role I would be weary of its ability as well.
References
Shulock, Nancy, “The Paradox of Policy Analysis: If It Is Not Used, Why Do We Produce So Much of It?” Journal of Policy Analysis and Management, 18(2), 1999
Mead, Lawrence M., “The Interaction Problem in Policy Analysis,” Policy Sciences, 16(1), 1983
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