Chapter 6

Policy Recommendation

STAGE 3 OF
POLICY PROCESS / POLICY CYCLE

Meaning of Policy Recommendation

 A written policy advice / policy suggestion ( policy options) paper prepared for the
consideration of some group that has authority to make policy decisions, such as a
cabinet, council, committee or other body pertaining to public issue.
 This suggestion is usually prepared by government department / agency responsible
to solve the identified policy problem
 At Federal government, policy recommendations are brought forward by a minister
or department for approval by Cabinet

Policy recommendations serve to inform people who are faced with policy choices on
particular issues about how research and evidence can help to make the best decisions. It is
about using research to solve a public policy problem or to provide evidence about how a
policy is working. Getting a recommendation accepted by policymakers depends on many
factors but a recommendation which is based on strong evidence, is cost effective to
implement and takes account of international best practice has a better chance of being
accepted and influencing policy debates.

1. DEFINE THE OBJECTIVE

The first step in crafting a policy recommendation is to decide what the objective of the
recommendation is. Is it the introduction of new legislation, or changes to existing laws? Is it
a new strategy for government, or change in direction of an existing strategy or to improve
an existing policy or service? Or to draw attention to a local issue such as planning or
transport services? Setting out a clear objective for a policy recommendation based on
research is essential in helping to influence decisions.

2. DECIDE ON A TARGET AUDIENCE

The next step in developing a policy recommendation is to determine the target audience.
If it is a planning or local funding issue, the target may be a local authority, city or district
council. If the recommendation is to change national legislation, the target audience may be
ministers, TDs, MLAs or MPs. If the objective is to influence government strategy, a
parliamentary committee or civil servants in government departments will likely be the best
audience. It is important to also decide who the key stakeholders are and what influence
they can have on the policy decisions, i.e. what NGOs, government departments,
businesses, etc. will have an interest in the area and the research that you have produced.

3. SET OUT THE ISSUE CLEARLY

The matter on which a policy decision is required should be defined in as much detail as
possible, directly linked to research. It is also important to have a clear outline of the
existing situation. Presenting an analysis of the issue will also be invaluable to policymakers,
including details of what strategy, legislation or government policy currently applies and
why the research evidence indicates a need for change. The recommendations should then
be limited to the issue at hand and to the research evidence itself.

4. GIVE OPTIONS WHERE POSSIBLE

If there are several different approaches which policy makers could take to solve the issue,
noting the advantages and disadvantages of each approach, based on research evidence,
will make the decision easier. This will help in making research more influential and relevant
to policymakers.

5. RECOGNISE THE CURRENT ECONOMIC CLIMATE

In the current economic environment in both ROI and NI, government and local authority
budgets are highly constrained in the amounts that can be spent. Thus, while research may
identify suitable policy directions which could solve issues, if these policy directions incur
significant costs, they are unlikely to be taken on board. Recommendations should be cost-
neutral where possible, or demonstrate that they are economically feasible, i.e. while
money needs to be spent now, it will save large amounts of public expenditure in the future.
A policy recommendation that would bring benefits while reducing costs is likely to be very
welcome.

6. FIT IN WITH EXISTING STRATEGIES OR LEGISLATION

Overall policy direction in NI and ROI is clearly set out in the Programme for Government
and Budget documents. Getting new legislation or a new government strategy adapted is a
lengthy and time- consuming process where evidence and political will need to be built up
over long periods. Research can contribute to this process by steadily building up the body
of knowledge on particular issues, helping to change opinions among the public and
influential policy decision makers. However, a policy recommendation may have a bigger
independent impact if it can fit in with an existing strategy, programme for government or
legislation. Research is best at influencing policy that is currently in development, e.g. the
new Positive Ageing strategy in ROI or Older People’s Strategy in NI. A recommendation can
influence the development of new policy, in framing recommendations, it is important to be
aware of current and future developments in policy in that area.

7. USE INTERNATIONAL EXAMPLES

When making a policy recommendation, it is a good idea to check if a similar approach has
been taken in another country, and to outline any successes or drawbacks using real world
examples. If another government, local authority, agency, etc. has been particularly
successful in handling a policy issue, a recommendation will be made much stronger by
reference to international best practice. This is particularly true if the example used is from
a similar country in terms of size, demographics and political system and the example is
innovative, cost-effective and is a demonstrated success.

8. REMEMBER THE AUDIENCE

Academic and technical language should never appear in policy recommendations. They
should be presented in clear, readable and simple language; easily understandable to any
passing reader with no prior knowledge of the subject area. In general, the audience for
policy recommendations will not be interested in methodology other than knowing that the
findings are robust. The important thing is to prioritise information for policymakers and a
link to the full report or research findings is sufficient.
9. SHOW AN IMPACT IN THE REAL WORLD
It is important to write recommendations that present clear arguments as to why the
research shows that the recommendation will benefit society, at individual, community and
national levels. Practical examples which demonstrate effectiveness in the real world can
help to achieve this.

10. EMPHASISE THE IMPORTANCE OF ACTION

Policymakers are faced with a large number of issue which require attention and action.
Therefore policy recommendations need to convince them that the issue highlighted by
research is important, and the recommended course of action will be beneficial to society in
some respect if action is taken.

Characteristics of a good policy recommendation paper (proposal)

 Well structured / organized
 Well-defined purpose for an identified problem / issue / target group
 Concise
 Readable
 Accurate
 Clear

Policy Recommendation Purpose

The primary purposes are:
 To help policy maker to make effective decision
 To inform policy maker whether the policy recommendation is accepted as sound
advice or not

Structure (components) of Policy Recommendations Paper (Proposal)

 The paper is writtern in a very structured form. Usually it consists of the following six
components:
 Introduction
 Policy options (alternatives)
 Analysis of policy options
 Policy suggestion
 Conclusion
 Implementation suggestions

C1- Introduction
This component tells / convince decision makers on the background of problem / issue and
justify why policy decision is required? i.e
 To define the public problem
 To state the purpose of the recommendation – to suggest new policy? modify
policy?
 To justify the need for policy decision
C2- Policy Options (Alternatives)
  This component proposes / suggests to the policy makers the possible alternatives
(options) that can be considered to solve problem of conserned.
 Generally 3-5 possible alternatives (options) is included for the consideration of
policy makers

Examples of Policy Options

PROBLEM: ENVIRONMENTAL POLLUTION
Policy Options Title of policy options
PO 1 Control and prevent solid pollution from agricultural activities

PO 2 Control and prevent solid pollution from industrial production

PO 3 Empowerment of task
PO 4 Appoinment of committee
PO 5 Incentives

C3 - POLICY OPTION ANALYSIS

This component is to:
 Tells policy makers the method of analysis done for every policy alternative (option)
proposed in Component 2
 Advice on the advantages and disadvantages of each of the policy alternative
(option) suggested.
 Example of technique / method for analysing policy options are:
 Cost benefit analysis
 Risk analysis
 Feasibility analysis

C3 - POLICY OPTION ANALYSIS

 COST BENEFIT ANALYSIS
 Cost Benefit Analysis (CBA) is one of the techniques used to ensure efficiency in
public policy decision particularly in the appraisal of alternative to solving public
problem.
 CBA process:
 Step 1: analyse costs
 Step 2: analyse benefits
 Step 3: Assign monetary values (RM) to the various cost & benefits
 Step 4: Allocate discount rate to equate present value for future effects
 Step 5: Compare overall cost and benfits
 Step 6: Decide option that maximize benefits/minimize costs

 Cost Analysis
1. Identify program (options) costs
2. Only incremental costs are included
3. Non- economic benefits is not included
 4. Exclusion of non-economic program costs
5. Valuation of economic costs – shadow pricing
6. Calculation of externalities
7. Scheduling of program costs by year
8. Expression of costs - use constant prices

 Benefit Analysis
1. Identification of all program benefits
2. Calculate only benefits that could be obtained from the program
3. Exclusion of non-economic benefits
4. Shadow price economic items
5. Calculation of externalities
6. Benefits added on a yearly basis
7. Constant prices should be used

 Assigning money value and discounted rate and compare

 Assigned money value (RM) to the identified cost and benefit
 Allocate discount rate to cost and benefit to equate present value for future
effects
 Compare overall costs and benefits value

Example of cost & Benefit Analysis :

Current CY+1 CY+2 CY+3 CY+4 CY+5
Year (CY)

Cost:
1.Tax imposed on public
2. No of staff to involve
Total cost (future value)
Total cost (present value)
Benefits:
1.
2.
Total benefit (future
value)
Total Benefit (present
value)

Present value discount rate = 2%

CBA= Total PV Benefit – Total PV Cost = Net Benefit

 Risk Analysis
  It refers to combination of the likelihood and the consequences of the
negative effect of the policy option
 It must be thoroughly assessed by the concerned body before any policy
option is adopted
 Analysis may include health effect, death, injury, exposure, property loss,
environmental effect and evacuation

Risk analysis is the process of assessing the likelihood of an adverse event occurring within
the corporate, government, or environmental sector. Risk analysis is the study of the
underlying uncertainty of a given course of action and refers to the uncertainty of
forecasted cash flow streams, the variance of portfolio or stock returns, the probability of a
project's success or failure, and possible future economic states.

Risk analysts often work in tandem with forecasting professionals to minimize future
negative unforeseen effects. All firms and individuals face certain risks; without risk, rewards
are less likely. The problem is that too much risk can lead to failure. Risk analysis allows a
balance to be struck between taking risks and reducing them.

Risk assessment enables corporations, governments, and investors to assess the probability
that an adverse event might negatively impact a business, economy, project, or investment.
Assessing risk is essential for determining how worthwhile a specific project or investment is
and the best process(es) to mitigate those risks. Risk analysis provides different approaches
that can be used to assess the risk and reward tradeoff of a potential investment
opportunity.

A risk analyst starts by identifying what could potentially go wrong. These negatives must be
weighed against a probability metric that measures the likelihood of the event occurring.

Finally, risk analysis attempts to estimate the extent of the impact that will be made if the
event happens. Many risks that are identified, such as market risk, credit risk, currency risk,
and so on, can be reduced through hedging or by purchasing insurance.

Types of Risk Analysis

1. Threat Analysis
Threats are described as anything that would contribute to the tampering, destruction or
interruption of any service or item of value. The analysis will look at every element of risk
that could conceivably happen. These threats can be split into Human and Nonhuman
elements.

2. Analysis of acceptable risks

to assess whether or not the existing policies, procedures and
protection items in place are adequate. If there are no safeguards in place providing
adequate protection, it can be assumed that there are vulnerabilities.

 FEASIBILITY ANALYSIS
 Involve process of evaluating and analyzing policy potential to support
decision making
  Purpose of feasibility analysis is to objectively and rationally uncover the
strengths, weaknesses, threats, and opportunities of the recommended
policy option
 Focusing on the costs involve and benefits (economic value)

 FEASIBILITY ANALYSIS TYPES

1. Political feasibility
The directions for the proposed project are mostly dictated by political
considerations. This is certainly correct for large projects with potential
visibility that may have important political implications and government
inputs. For example, regardless of the merit of the project, the political
necessity may be a source of assistance for a project.

On the other hand, because of political factors, value-able projects may face
uncontrollable opposition. An evaluation of the objectives of the project with
the current objectives of the political system is required in the political
feasibility analysis.

2. Economic and financial feasibility

This assessment typically involves a cost/ benefits analysis of the project,
helping organizations determine the viability, cost, and benefits associated
with a project before financial resources are allocated. It also serves as an
independent project assessment and enhances project credibility—helping
decision-makers determine the positive economic benefits to the
organization that the proposed project will provide.

Economic feasibility refers to the feasibility of the considered project to

produce economic benefits. A benefit-cost analysis is needed. Furthermore,
the economic feasibility of a project can also be evaluated by breakeven
analysis. In order to facilitate the consistent basis for the evaluation, the
tangible and intangible facets of a project must be translated into economic
terms. Economic feasibility is critical even when the project is non-profit in
nature.

A financial feasibility analysis projects how much start-up capital is needed,

sources of capital, returns on investment, and other financial considerations.
The study considers how much cash is needed, where it will come from, and
how it will be spent. The study is an assessment of the financial aspects of the
business.

Financial feasibility must be differentiated from economic feasibility. The

ability of the project management to raise sufficient funds required to
implement the proposed project is included in the financial feasibility.
Additional investors and other sources of funds are considered by the project
proponents for their projects in many cases.
 In such situations feasibility, sources, soundness, and applications of these
project funds may be a hindrance. Other aspects of financial feasibility should
also be viewed, if appropriate, like creditworthiness, loan availability, equity,
and loan schedule. The implications of land purchase, leases, and other
estates inland are also reviewed in the financial feasibility analysis.

3. Administrative Feasibility
Operating a policy must be within the administrative capability of the
department or agency involved. For instance, metering supplies requires a
certain level of household visits, and billing staff. A drive for conservation
needs to be backed up by qualified staff to advise households, industries or
farmers on technology and improved water management and use. By the
same token, supply augmentation schemes are not the easy option they may
appear if they require intensive monitoring and maintenance.

New policies will be worthless unless their implementation is monitored and

enforced. For instance, the system of water transfer practised in some states
of the USA requires official approval for each transaction. The control of
water pollution implies regular monitoring and inspection, and a willingness
to penalize the offenders. Water pricing requires regular collection of
revenue and a willingness to prosecute non-payers, coupled with appropriate
administrative arrangements for funds collected to be channelled back to the
water system.

4. Technical Feasibility
This assessment focuses This assessment focuses on the technical resources
available to the organization. It helps organizations determine whether the
technical resources meet capacity and whether the technical team is capable
of converting the ideas into working systems. Technical feasibility also
involves the evaluation of the hardware, software, and other technical
requirements of the proposed system. As an exaggerated example, an
organization wouldn’t want to try to put Star Trek’s transporters in their
building—currently, this project is not technically feasible.

The engineering feasibility of the project is viewed in the technical feasibility.

Certain important engineering aspects are covered which are necessary for
the designing of the project like civil, structural, and other relevant aspects.
The technical capability of the projected technologies and the capabilities of
the personnel to be employed in the project are considered.

In certain examples especially when projects are in third world countries,

technology transfer between cultures and geographical areas should be
analyzed. By doing so productivity gain (or loss) and other implications are
understood due to the differences in fuel availability, geography, topography,
infrastructure support, and other problems.

5. Socio cultural feasibility

Example:
Technical FEASIBILITY ANALYSIS
The technical feasibility assessment is focused on gaining an understanding of the present
technical resources of the organization and their applicability to the expected needs of the
proposed system. It is an evaluation of the hardware and software and how it meets the
need of the proposed system
O'Brien, J. A., & Marakas, G. M. (2011)

 Deciding which policy option to suggest:

Base on the analysis done, suggest option that gives most benefit, produce less risk and
most feasible to implement, i.e.
1. Compare net benefits from CBA analysis for each policy option
2. Compare risk / threat for each policy option
3. Compare feasibility result

C4 - POLICY RECOMMENDATION
This component is to:
 Recommend to policy makers the most appropriate alternative (policy option) from
among the alternative that have been analyzed
 This recommendation is made base on conclusion made from analysis of policy
option done

C 5 – Conclusion
This component is to:
 indicates the benefit / result expected should the policy alternative (option)
recommendation is accepted and implemented
 Example:
 For PO 3, empowerment of task, benefits will be:
 it is estimated that more compound will be issued / collected, thus more
revenue is available to spend on pollution reduction.
 It is expected there will be more negotiation / discussion between society
(empowerment group) to establish sustainable environment

C 6 –Implementation Suggestions
This component is to:
 indicate the various agencies that will be responsible in implementing the policy
option recommended should the recommendation is accepted / legalized.

Requirements / factors for policy recommendation to be adopted

 Content of proposal – must be technically sound
 Cost to implement policy option recommended – must be reasonable
 Deliberation
 Recommendation is politically acceptable
 Popular support/public consent - Public will accept and comply if it is implemented
Policy recommendation process and procedures
– Malaysian Experience
 Policy recommendation is an administrative process
 Involve mostly the non-political executives from various levels such as the Cabinet
Committees, councils such as the National Development Councils, National
Economic Council, and agencies to do the paper

Policy recommendation process and procedures

– Malaysian Experience
 Once policy decision is made, the relevant ministry / agency will prepare the policy
recommendation proposal
 Several committees involving various related ministries / agencies will be appointed
to prepare the proposal
 Relevant consultants will be appointed (if necessary)
 The final draft of the policy recommendation will be presented to the relevant
councils (such as the National Development Councils, National Economic Council) for
review
 The amended draft (after reviewed) is now ready (in the form of a draft bill) to be
submitted to the Cabinet for approval

Policy recommendation process and procedures

– Malaysian Experience
To submit to the Cabinet for approval:
 The relevant agency will first get a ministerial consent to submit policy
recommendation memorandum to the central agency (such as the EPU, ICU, JPA)
and the Cabinet.
 Assuming submission is allowed
 The concerned Minister submit the amended policy recommendation for approval of
the relevant Central Agency and (or) Cabinet