THREE EMERGING THEORIES OF THE POLICY PROCESS

The Three Emerging Theories of the Policy process are: (1) Sabatier’s Coalitions Framework; (2)
Institutional Rational Choice Theory and (3) Political Theory of Bureaucracy (The Politics of
Structural Choice).

1. The common denominator of these theory is to explain how interested political actors
within the political institution to produce, implement, evaluate and revise public policies.

Ostrom and the Institutional Sabatier’s Advocacy or Coalitions Political Theory of Bureaucracy
Rational Choice Theory Framework (The Politics of Structural
Choice)
1. Public policies are 1. There are multiple actors 1. Public policies are
institutional and other variables at institutional
arrangements – rules work in the policy arrangements.
permitting, requiring or process. 2. Institutional change can
forbidding actions on 2. Policy change normally be viewed as the results
the part of the citizens occurs over a period of of rational individuals’
or public officials. a decade or more. efforts to overcome
2. Policy change results 3. Policy change is a collective action
from actions by rational function of (a) problem and to
individuals trying to interaction of competing cooperate for mutual
improve their advocacy coalitions gains.
circumstances by within a policy 3. Public policies arise from
altering institutional subsystem; (b) changes the interaction of
arrangements. This external to the interest groups
action or decision is subsystem; (c) effect of politicians and
anchored on the relatively stable system bureaucrats within the
presumption of this parameters. context of democratic
theory about the 4. The unit of analysis – politics.
individual actors and policy subsystem which 4. Principal actors (units of
their key decision- is composed of public analysis) are groups.
making behavior. The and private 5. Example: Principal-
adequate model of organizations who are agent theory; Twin
individual actors under pressures of political
 this theory must specify actively concerned with compromise and
their (a) resource; (b) a policy problem. political uncertainty.
ability to process 5. Methods of operation:
information; (3) (1) developing and
valuation of outcomes using information in an
and actions; (4) criteria advocacy mode to
for selecting actions persuade decision-
3. Unit of Analysis: makers to adopt policy
Individual rational actor alternatives supported
4. This theory reminds us by coalitions; (2)
that in IRC, actors’ manipulating the choice
strategies and moves of decision-making
are guided by their forum; and, (3)
perception of expected supporting public
benefits and costs officials in position of
conditioned by the public authority who
decision situation. share their views and
5. IRC defines policy maybe members of
change in terms of coalitions
actions taken to change
institutional
arrangements within a
decision situation that is
partially shaped by
institutional
arrangements.
6. There are three levels of
actions that individual
actors utilized: (a)
operational level; (b)
collective choice; (c)
constitutional.
 NEW DIRECTIONS IN PUBLIC POLICY

This narrative completely argues that “there is an innovative work happening in public policy in
a cognate sub-discipline.”

1. There are three stages of theory building and testing in public policy:
i. Classic period of studies of decision-making and rationality
- INCREMENTALISM AND THE “RATIONAL MODEL” of decision-making
processes were elaborated during this period.
- The key problem in public policy, according to this period, is to explain public
decision-making; why do we get the policies we do and how do political actors
seek to influence.
- In this period, “the notion of bounded rationality is emphasized.” Bounded
rationality pertains to the limitedness or limited range of decision-making
choices of human beings.
- This belief also complemented the concept of “Incrementalism or
Incrementalist Model of Decision-making” which argues that decision-making
process reflects a limited source for options, constrained by cognitions and
groups from within bureaucracy.
-
ii. Age of synthesis when theories of decision-making were blended into accounts
of agenda setting
- It is a complex account of decision-making which produced the POLICY
ADVOCACY FRAMEWORK, GARBAGE CAN/POLICY WINDOW
METHAPOR AND PUNCTUATED EQUILIBRIUM MODEL.
- This theme emerges from the interaction of multiple actors which had
become more prominent in series of publications.
- Policy Advocacy Framework contends on the alliance of bodies holding the
same ideas and interests for the purpose of arguing other coalitions within
the policy sector. The idea is that, between two or four competing policy
advocacy coalitions, each with its own ideas about policy content, compete
 for the dominance in a subsystem. Coalitions are reflections of ideas and
interests about a set of policy issues.
- Policy Window (By Kingdon, 1984) – refers to the opportunity, such as new
policy problem or a new administration in power, for policy advocates to
press home their ideas.
- Garbage Can Model of Organizational Choice or Policy Stream Approach –
addresses how policy streams join together. This model explains how
decision makers try to move or dump problems in an organization. In this
model, problems emerge to engage some of the people who take decisions.
On the next occasion, policy is discussed but the policymakers now move
on to try to solve other problems. In this context, the original decisions
now create new problems.
- Punctuated Equilibrium (What causes dramatic and long-lasting changes?)
– This highlights the presence of both change and stability in policymaking.
It is more focused in the rapidity of the change between partial equilibrium
and of issue-expansion hence the idea that stable periods of policy making
are punctuated by political activism. It is the explanation of the shift in the
rates of change in policy-making subsystems that is the essence of how
policies change and vary.

iii. Age of Political economy of public policy drawing on models and methods
that have been applied to IR and comparative politics which are increasingly
addressing public policy.
- This age highlights how it overcomes the key weakness of mainstream
public policy which is, the difficulty to test theories and models.
- It is the era by which revival of interest in political economy occurred,
especially with a comparative range.
- During this period, in several empirical (quantitative studies), economists
made economy as the dependent variables and how politics affect it.
Moreover, there is also a growing interest when it comes to treating politics
and policy as the dependent variables and economy will then be modelled
into political choices.
Under this topic, it can be inferred that public policy studies had proceeded along a path which
started on:
1. theories of decision-making to build up a set of explanations, whether based on stages of
the policy process driven by various external elements or constraints on decision-making.
2. It is followed by extending the above-mentioned original ideas and synthesize them –
adding them in the salience of competing ideas in the policy process. However, the first
and second stages suffer from a problem of using description rather than explanation to
understand change in a complex decision-making.

Generally, this paper just provides how did policy studies evolve through times.

THE POLICY DEVELOPMENT PROCESS AND THE AGENDA OF EFFECTIVE

INSTITUTIONS: THE PHILIPPINES

1. A developing country such as the Philippines faces the challenge of how to create an
enabling environment for economic growth and development.
2. The policy development process is not a disembodied phenomenon but is nested in an
effectively functional institutional setting because there can be no effective policy
development process if institutions supporting or implementing it are ineffective and
dysfunctional.
3. There are several reasons why institutions are sometimes accommodating or resistant to
reforms. These factors are the following:
i. Message (content) of the proposed reform or package of reforms;
ii. The relative impacts on various sectors of the economy;
iii. The identification of gainers and losers;
iv. The presence of a broad coalition of support or lack of it.
4. It must be noted that both the content (message) of the reform and the medium used
for acceptance of reform are equally vital.
5. With reference to the experience of some of the ASEAN countries such as Malaysia and
Thailand, it can be derived that it is not sufficient to have the right development
policies; it is equally, if not more important, to have effective (implementing) institutions.
6. Economic growth and development are functions of efficient policies, enlightened
and strong leadership and competent institutions.
7. After the WWII, the Philippines seemed to be better prepared than other countries in
Southeast Asia to get out from the ranks of the poor. Ironically, this promising status of
the Philippines have remained promise and untapped potential until today. This reflects
that we somehow missed pathways to growth and development.
8. During the 1997 East Asian Financial Crisis, there is a continuous decline in economic
growth and economic stagnation. There was very moderate economic growth at around
5% a year since 2003 but other ASEAN countries which were hardest hit by the crisis have
once again galloped ahead of the faltering Philippine Economy. As a matter of fact, private
investors studiously ignored and bypassed Philippines and poured massive capital and
technology into Malaysia, Indonesia and Thailand. This scenario denied the country of
tremendous opportunities that are crucial for acquiring competitiveness in global markets.
9. The Philippines has experienced some moderately successful economic policy reforms
since the end of the martial rule in 1986 when the Aquino administration restored the
democratic framework for the country. During this period, there are various economic
engagements and opportunities such as:
i. Dismantling sugar and coconut monopolies;
ii. Financial and Trade liberalization; and,
iii. Privatization of state-owned enterprises
10. The subsequent administrations tried their hand in pushing outward the abovementioned
policy reform envelope. Because of these reforms, the Philippines was able to actively
engage in the global trading markets, and had benefit economic boom enjoyed by the US,
China and other major countries. But the country remains vulnerable to problems of rising
domestic and external debt, the volatility of the oil market and the lost of export markets
because of lack of competitiveness of domestic firms and the failure to attract foreign
capital and technology.
11. This visible and real vulnerability of the Philippine economy requires the maintenance and
acceleration of the pace of economic policy reform. We have to improve our investment
climate, fragile and underdeveloped financial system and resolve the prevailing perception
that contracting and regulatory uncertainty adds costs of doing business as barriers that
discourage private investments.
12. At this juncture, the role of the government is very much emphasized. It is implied that
the government, most often, is the enemy of good policy outcomes – a PCT argument.
13. It is revealed in the literature that in the Philippines, the policy reform processes encounter
conflict among powerful institutional factors. Different vested groups which may be in
conflict with each other or which may temporarily coalesce for a common objective have
their origins in the political and economic power of the economic elites. The power center
is a centralized and patronage-ridden presidency that orchestrates the execution of policy
and allocation of spoils – describing a neo-patrimonial political system.
14. The reality revealed above requires building on past reform efforts and work hard to map
out a reform agenda for the future. In this case, we have to highlight supporting
institutions in the Policy Development Process.
15. There are two types of supporting institution: (1) COORDINATING INSTITUTION –
it’s a coordinating body that can harmonize and synchronize the different efforts in the
government based on shared development agenda as reflected in the Philippine Medium-
Term Development Plan. In the country, the National Economic and Development
Authority (NEDA) serves as the national and regional development plan and program
coordinator based on its mandate from Presidential Decree (PD) 1 and Executive Order
230. NEDA is tasked with the coordination of official development assistance and the
appraisal of programs and projects and conducts of programs and project evaluation and
on-site reviews and consultations. (2) INDEPENDENT POLICY REVIEW
INSTITUTION – this institution is expected to provide objective assessment of
development efforts, do performance reviews and identify future pathways for reform and
development. These institutions may do either ex ante or ex post reviews or both. Ex ante
review is used to identify and formulate new options whereas ex post reviews are utilized
to evaluate the effectiveness of existing policies or past development programs and
efforts. An example of an institution focused on conducting ex post review is the Philippine
Institute for Development Studies (PIDS). The PIDS is a research institute created on
September 26, 1977 by virtue of PD 1201. PIDS is organized as a non-stock, non-profit
government corporation and enjoys a certain degree of financial autonomy; it was
established to respond to the critical and growing need for independent research for
planning and policy formulation. Moreover, in terms of ex ante reviews, the Department
 of Budget Management conducts an Agency Performance Review (APR) to review the
performances of departments and agencies.
16. The findings from the reviews of existing policies by PIDS could be used by the
departments such as NEDA and DBM in improving its own evaluation or review of
government policies and programs.
17. From this topic, it can be concluded that the policy development process needs the
effective implementing institutions as well as supporting institutions. Both coordinating
bodies like NEDA and independent policy review institutions like PIDS are important to
support policy development process.

POLITICAL OPPORTUNITY AND RISE AND DECLINE OF INTEREST GROUPS

1. Interest group sectors are composed of a set of organized groups that share similar
policy concerns.
2. Interest group activity is always affected by the political environment in which
groups operate. They are aided, encouraged, and/or thwarted in their efforts by a number
of structural and strategic factors the shape their emergence, development and
demise.
3. Interest groups are given with significant political spaces in the political decision-making
which is claimed by the United States as their inherent characteristic – a pluralist
conception.
4. The most often reasons of the rise of interest groups are the disturbances in society,
particularly new political issues. This context gives space for the emergence of
“spontaneous coalescence of interests” in the form of groups that compete for
access and influence in the political game. Moreover, political opportunity structures
exist also when there is a popular access to the system, there is a division among the
ruling elites, availability of alliance with elites and state repression.
5. The above notion is supported by Dahl’s “polyarchal democracy” which argues that groups
exist to develop nascent constituencies, then bargain with political leaders and parties for
influence on the policy process.
6. It is also noted in the paper that the group representation is a transparent reflection of
the constellation of diverse interests in society; the assumption is that – any “disturbance”
would create group representation.
7. Olson’s provide his explanation while groups fail; he criticized the pluralist paradigm for
overvaluing the contribution of political programs to group formation and maintenance.
Olson contends that potential groups are likely to “free ride” on group activity.
8. It is also argued that there is a set of independent variables that explain which
governments were most likely to encounter protest – this is what we call as “structure of
political opportunities.” Studies revealed that protest most likely occur in cities with a
combination of “open” and “closed” institutions. A complete lack of tolerance for “dissent”
deterred protest while extremely open and accessible governments preempted it. This
means that the availability of institutional mechanism of redress directly
affected the mobilization of dissent and the tactical choices activists made.
9. The document presented the stages of public interest groups expansion and
contraction:
i. Recognition of a Social Problem. A disturbance to the status quo arouses public
concern and/or dissent. This may result from policy reform, swings in political
alignment, or new policy problems.
ii. Extra-Institutional Mobilization. This occurs in one or several levels, ranging from
expert disaffection reflected in critical journal articles to street protest.
iii. Media Recognition of both the policy problem and social protest defines social and
political problems, frames potential solutions and identifies relevant actors.
iv. Resource Mobilization may include funding from private, foundation, corporate and
government sources as well as increased member interest.
v. Niche Building activity ensues as groups to try to solidify their positions,
differentiate among themselves and stabilize the demand for their activity,
ensuring organizational survival.
vi. Resource Contraction follows from a number of outcomes including policy success,
unambiguous defeat through repression or shifting public interests.
vii. Political crises occur when there are conflicting interests among several actors in
the policy process. When these contradictions are heightened, the context provides
 an opportunistic space for another group to arise. Political crises are those issues
within the political field that put the public interests “at stake.”
viii. The discussion of the rise or emergence of interest groups can be explained by
the Pluralism Theory whereas the decline of the interest groups can be partly
elaborated by the Elitism Theory or Rational Choice Theory.

AGENCY THEORY: AN ASSESSMENT OR REVIEW

1. Agency Theory is concerned with resolving two problems in an agency relationship:
i. Agency problem that arises when the desires or goals of the principal and agent
are in conflict. When it is difficult or expensive for the principal to verify what the
agent is actually doing.
ii. This theory assumes that individuals will almost act in their own self-interests and
that this behavior may directly conflict with the principal’s best interests.

Under this theory, it emphasizes the “contract” or an agreement [negotiation] (not

necessarily a written document or agreement) governing the relationship between the
principal and the agent.
Key Ideas Principal-agent relationship should reflect efficient
organization of information and risk-bearing costs
Unit of Analysis Contract between principal and agent
Human Assumptions Self-interested, bounded rationality, risk aversion
Organizational Assumptions Partial goal conflict among participants; efficiency as the
effective criterion; information asymmetry between
principal and agent.
Information Assumption Information as a purchasable commodity
Contracting Problems Agency (moral hazard and adverse selection); risk
sharing
Problem Domain Relationships in which the principal and agent have
partly differing goals and risk preferences.

2. Agency Theory has developed along two lines: (1) positivist agency theory and (2)
principal agent theory.
 POSITIVIST AGENCY THEORY PRINCIPAL-AGENT THEORY
i. Focus: (1) Identification of situations in i. It is abstract and mathematical. It is a
which the principal and agent are likely general theory of the principal-agent
to have conflicting goals. (2) theory unlike in the positivist agency
Description of the governance theory – it is exclusive only on the
mechanisms that limit the agent’s self- special case of owner/CEO relationship
serving behavior. in the large corporations.
Examples:
1. The ownership structure of the Propositions:
corporation: how equity ownership by 1. Information systems are positively
managers aligns managers’ interests related to behavior-based contracts
with those of owners? and negatively related to outcome-
2. The role of the board of directors as based contracts;
an information system that the 2. Outcome uncertainty is positively
stockholders within large corporations related to behavior-based contracts
could use to monitor the opportunism and negatively related to outcome-
of the top executives. based contracts;
3. The risk aversion of the agent is
Propositions: positively related to behavior-based
1. When the contract between the contracts and negatively related to
principal and agent is outcome based, outcome-based contracts;
the agent is more likely to behave in 4. The risk aversion of the principal is
the interests of the principal. negatively related to behavior-based
2. When the principal has the information contracts and positively related to
to verify agent behavior, the agent is outcome-based contracts;
more likely to behave in the interests 5. The goal conflict between principal and
of the principal. agent is negatively related to behavior-
based contracts and positively related
to outcome-based contracts;
6. Task programmability is positively
related to behavior-based contracts
and negatively related to outcome-
based contracts;
7. Outcome measurability is negatively
related to behavior-based contracts
and negatively related to outcome-
based contracts;
8. The length of the agency relationship
is positively related to behavior-based
contracts and negatively related to
outcome-based contracts;