Policy analysis and policy making

Policy making cannot and should not take place without sound policy analysis. This, in turn, requires up-to-date policy research. In most cases policies are made on existing problems or as a continuity of on-going policies. Both require recent information and data to ensure that the policy made is not only relevant but also practical. Taking into account experiences with existing policies that need makeover and their impact on target groups or the economy is the easiest route to this information gathering. But analysis based on past and current experiences with policies are most likely to be fragmentary so far the area of policy making is concerned. Only fresh resource to collect data from the 'field' and stakeholders can provide up-to-date information about the impact of ongoing policies and the need for reforms in them. For new policies such research for data collection and assessment of need is unavoidable if the desired policy outcome is to be ensured.

Policy research thus becomes the first stage of policy analysis which, in turn, paves the way for policy making. Some of the concrete objectives of policy research are obvious. The first and foremost is the identification and measurement of the need that has to be addressed by policy. The need may be of a target group (e.g. poor) or of a sector (trade, industry, etc.). The second task of research is identification of the programme and actions to realise the needs. The third stage is the evaluation of existing institutions for implementation of the programmes. The fourth is the assessment of the strategy used for implementation, e.g., subsidy. Fifthly, resource allocation in the light of the programmes and alternate use of resources to decide the least-cost approach has to be determined. Finally, feedback from the stakeholders about the adequacy of the programmes and benefits enjoyed has to be collected.

Ministries that formulate policies do not have in-house capacity for undertaking policy research. As a result, in most cases, policies are made on the basis of felt need and, at best, using past experiences. Failure of policies result mostly from this type of policy making without backup of research inputs. The government of Bangladesh has a few research bodies under it like the Bangladesh Institute of Development Studies (BIDS) and the Bangladesh Bureau of Statistics (BBS). Though data and reports from BBS are used by some ministries in certain cases, the expertise of BBS is hardly used for policy research. Even for formulating plans of various durations the use of BIDS is limited. On the other hand, though some private sector independent research bodies specialise in policy analysis, these do not usually engage in policy research through collection of data at first-hand. Government may approach these think-tanks to collaborate with it for policy research or make offers for undertaking such research independently keeping in view the need of the government. In order to be relevant and effective evidence-based policy research has to be contemporaneous with current policy making. However high the standard of the research may be, their results, in the form of data and information, will be of limited use and even misleading if they are out of date.

Policy analysis based on result should be without any bias either for or against any particular policy. While theory should be given due importance in policy analysis, importance should be attached to the reality of political economy, specially the need for promoting growth with equity. The policy analysis should highlight the matter and let the policy makers decide on the options. Efficiency criteria may not be favoured by policy makers eager to promote welfare. In view of this obligation of policy makers, policy analysis should point out the least-cost approach to realise the objectives.

Policy analysis has a double role to play. It is required both before policy making and after its adoption and implementation. Midway through the operation of a policy there should be mid-term policy analysis by ministries in collaboration with policy-oriented research bodies. To facilitate this there should be regular monitoring after the policy is put into practice. Such mid-term monitoring should concentrate on implementation of procedure and result obtained. There also can be policy analysis at the end of implementation of a policy. This should be based on evaluation which, in turn, will use inputs from monitoring.

It would be myopic and impractical to think that economics can alone be the basis for policy and policy making. Ideology, history, the social and cultural framework and a host of other factors are germane to and important for policy and policy making. To a large extent there is no realistic alternative to the role of the government in achieving a social welfare function. Given this role government has its own priorities and not infrequently these will involve a denial of individual preferences or the preferences of the market. These priorities cannot be judged by economic theory as it these pertain to political economy. 

In this prevailing situation of growing inequality and marginalisation of disadvantaged groups, the economists are required to live with state preferences just as they have been used to accommodating the preferences of the market. To make life more difficult, they have to do so knowing that preferences will be sometimes ill-defined and somewhat contradictory and subject to frequent change. If politics is the art of possible economists who aspire to exert influence on policy making are obliged to judge what is the 'possible' in any given problem area and to measure the expected benefits from what is 'possible' against the cost of achieving it. Unfortunately, the training received by an economics graduate will often do little to prepare him/her for the complexities of the task just mentioned. There has grown up in the academia of the developed countries a narrowly 'scientific' view which is a far cry from the concerns of earlier generations with questions of political economy. In consequence, modern economists are largely silent on the nature of the state as an economic agent. The model of government implicit in economists' normative theories of economics policy is abstract to a high degree from observed realities. Economists will be failing as professionals if they don't strive to help policy makers in situations of conflicting interests. Here objectivity in handling and presenting evidence is of the essence. Above all, economists have to realise that the policy making is a different kettle of fish from policy analysis.

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