Public Policy Analysis

Policy Simulation Exercise | Bardach's 8-Fold Path

By: Apurva Kumar
Date: 05-04-2025
Overview of the policy simulation exercise
Plan and ground rules for the workshop

What will be covered in the session?

• What is public policy?
• What is government and what are its functions?
• When do governments intervene?
• Policy cycle model
• Public policy analysis – Definition & its location within the policy cycle
• Policy simulation exercise

How will the policy analysis be done?

• Divide the cohort into groups
• Walk you all through all the 8-steps from Bardach's Policy Analysis framework
• Group presentations and final presentation.
 What is public policy?
Definition of public policy and its components
• Public policy is a set of decisions which (a) sets out directives for immediate or future action or
conduct; (b) lays down guidelines for the implementation of action – RVV Ayyar, IAS, Author
• Public policy is anything a government chooses to do or not to do – Thomas Dye, Florida State

University

o Primary agent of public policy making is government due to their authoritative decisions on
behalf of citizens (Role of government is critical)
o Fundamental choice made by the government to do something or do nothing with respect
to a policy problem (+ve decisions and –ve decisions)
o Government decisions and actions can have 'unintended consequences' not related to policy.
(Alcohol ban can lead to emergence of black marketing)
 What is government?
Definition of government and its role in policy making
• An entity that successfully claims the monopoly of the legitimate use of physical force within a
given territory – Weber (1946)
o Legitimate – People elected the government
o Physical force – Extract taxes | Can enforce law & order | Create laws
• Other functions of government in a democracy:
o Developing & implementing policies
o Provisioning of basic services – Social Contract
o Ensure fairness in the society
o Puts a check on regressive societal norms
 When do governments intervene?
Definition of government and its role in policy making
• Market failures (Voluntary transactions become infeasible)
o Externalities (Situations in which persons impact upon each other in ways that are not negotiated through
voluntary agreements between these persons. Examples: noisy neighbour, pollution, R&D triggering
entrepreneurship, urban transport etc.)
▪ Positive externalities: Vaccination, Sanitation | +ve externalities lead to ‘under-production’
▪ Negative externalities: Smoking, Pollution | -ve externalities lead to ‘over-production’
o Monopoly: When one firm/entity dominates the market. Lack of competition.
o Information asymmetry: When one entity has more knowledge than the other
o Public goods: Goods that are non-excludable and non-rivalrous (Clean air, Defence, Light house, Public
Health)
▪ No excludability -> Essential for firms to obtain revenue stream -> No firm would produce goods that cannot
be billed for services rendered
▪ Free rider problem
▪ The interventions by the state should be primarily located around these 4 problems.
When do governments intervene?
Definition of government and its role in policy making

MARKET FAILURE GOVERNMENT INTERVENTION

Negative Externalities Laws, taxes, regulations

Positive Externalities Finance, subsidies

Price capping, breaking up
Monopoly
monopolies
Information Asymmetry Regulations, taxes

Public Goods Public provisioning

 Key steps in policy thinking
Rethinking about policy design and implementation

Analyze policy failure in 4 ways:

1) State intervention where none is required: There is no market failure, and there is no need for the state to
intervene, the best option is for freedom to prevail. Unintended consequences might kick in.

Example: Ban on app based bike taxis in many states in India

•No consumer harm or regulatory vacuum: Riders and drivers used apps like Rapido voluntarily.
•State intervention: Governments banned bike taxi services citing legal grey areas.
•Unintended consequences:
•Job losses for gig workers.
•Higher last-mile travel costs for commuters.
•Legal uncertainty for innovators.
•Lesson: Excessive caution harms livelihoods and convenience without addressing real risks.
 Key steps in policy thinking
Rethinking about policy design and implementation
2) There is market failure, but the politics goes wrong: The right state intervention is highjacked by special interest
groups.

Example: Medical education and regulation – MCI/NMC reform

•Market failure: Asymmetric information in medical education and healthcare provision. Need for quality regulation.
•Policy intent: Regulate medical education, ensure quality and ethics in practice.
•Political capture:
•The Medical Council of India (MCI) became notorious for corruption, rent-seeking, and cartelization, blocking the
opening of new colleges or courses unless bribes were paid.
•Efforts to reform were delayed for decades due to political connections of private medical college owners.
•Only in 2020 was the National Medical Commission (NMC) established to replace MCI after intense resistance.
•Lesson: Regulatory capture can delay and distort essential reforms, even in critical sectors like health.
 Key steps in policy thinking
Rethinking about policy design and implementation
3) There is market failure, & the objectives of policymakers were sound, but the design of the intervention was
wrong: In some cases identification of market failure is correct, but the intellectual clarity was lacking, and hence wrong
policies were chosen.
Example: Aadhar based biometric authentication in PDS and welfare schemes

•Market failure: Leakages, corruption, and inclusion/exclusion errors in welfare delivery (PDS, pensions, MGNREGA).
•Policy intent: Improve targeting and reduce fraud using biometric authentication through Aadhaar.
•Design flaw:
•Assumed seamless biometric authentication despite rural connectivity and fingerprint failure issues (elderly, manual
laborers).
•Led to exclusion of genuine beneficiaries who couldn't authenticate or were wrongly flagged.
•Lesson: The idea of plugging leakages was sound, but the techno-solutionist design lacked sensitivity to ground
realities.
 Key steps in policy thinking
Rethinking about policy design and implementation
4) There is market failure, the correct intervention was attempted, but the implementation failed: Policymakers
thought of the right thing, but implementation failed.

Example: Pradhan Mantri Awas Yojna (Urban)

•Market failure: The private housing market does not provide affordable housing for low-income urban residents.

•Policy solution: PMAY-U aimed to provide “Housing for All” by 2022 through subsidies, interest benefits, and in-situ slum

redevelopment.

•Implementation failure: Land acquisition delays, inadequate beneficiary identification, and poor coordination between

state and ULBs have slowed progress. Many houses remain incomplete or unoccupied.

•Lesson: Strong design with financing support, but execution gaps at local levels derailed momentum.
General principles through which one can understand
policy implementation

Framework proposed by Lant Pritchett and Michael Woolcock & expanded by Kelkar and Shah

1) Number of transactions: It is easier to achieve state capacity on a problem where there are a smaller
number of transactions.
• Examples: Direct Benefit Transfer for LPG subsidies, Covid-19 vaccination drive

2) Discretion: It is easier to achieve state capacity when there is low discretion

• Examples: All frontline workers’ SOP, FASTag toll collection

3) Stakes: It is harder to achieve state capacity when there is more at stake for private persons.
• Examples: Land acquisition for infrastructure projects, regulating pollution by industries, criminal justice system

4) Secrecy: Higher the secrecy, lower is the chance to get feedback loop of analysis and criticism to be
more effective.
• Examples: Electoral bonds, Aadhar and data privacy concerns, farm laws (2020)
How are policies made?
Understanding the policy cycle model

Policy Analysis

Agenda Setting

Policy Policy
Evaluation Formulation

Policy Decision
Implementation Making
 What is policy analysis?
Policy analysis plays an important role in identifying solutions to a policy issue
• Definition: Policy Analysis is the systematic process of identifying potential policy options that
could address the policy problem and then comparing those options to choose the most effective,
efficient and feasible one.
• Importance: Policy analysis ensures that the analyst has gone through a systematic process to
choose the policy option that may be the best solution to a given policy problem.
• Policy analysis goes beyond personal decision making
o Subject matter concerns the lives & well-being of large number of citizens
o Involves other professionals & interested parties; often done in teams
o Consumer is a 'client':
▪ Hierarchical superior in department
▪ Diverse groups of stakeholders
 Bardach's 8-Fold Path of Policy Analysis
An overview of the 8FP policy analysis framework
• 8-fold path:
o Define the problem
o Assemble more evidence
o Construct alternatives
o Select the criteria
o Project the outcomes
o Confront the trade-offs
o Decide!
o Tell your story
 Bardach's 8-Fold Path of Policy Analysis
An overview of the 8FP policy analysis framework
• Problem solving process including identifying policy options & zero in on one alternative which will
solve the problem
• Policy analysis, using 8FP, is more 'art' than 'science'
o Analytical + Subjective
• Iterative process: Repeat and revisit steps
o Problem definition, alternatives, criteria may keep on changing
o With each iteration you will find yourself on the right track
• Final product
o You will be able to describe the problem that needs to be mitigated
o Layout a few alternative course of actions
o Attach a set of projected outcomes to each course of action
o Use evaluative criteria to do trade-offs among the policy choices
o Recommend which alternative is best placed to solve the problem
 Step 1: Define the problem
• Gives the reason for doing the policy analysis
• Provides a sense of direction to the evidence gathering
• Defining the problem will help structure how you tell the story
• Definition should be evaluative:
o Why is it a problem? Why does it warrant a policy intervention?
o Everyone uses different evaluative framework to look at the problem
o View the situation through:
▪ Market failure lens
▪ Government failure lens
• Think of deficit & excess
o Quantify : Attach magnitude wherever possible
o Gather more information to help you calibrate relevant magnitudes
o In many cases you will have to do guestimate using the data (Example : Ranges)
 Step 1: Define the problem
• Be as precise as possible
• Narrow down the scope of research- by geography, different aspects of the problem, time scale etc.
• Think in terms of degrees and not absolutes (Example: The number of students who severely
malnourished increased from 8% to 15%)
• Remember – Your policy solutions & direction of research will depend on the problem definition
• An ideal problem definition should be captured in one or two statements
 Pitfalls to avoid while articulating problem definition
• Defining the solution into the problem
o Problem definition should not include an implicit solution
o Projected solutions must be evaluated empirically
o Keep the problem definition stripped down to a mere description
o Don't say: "There is too little shelter for the homeless families"
▪ Implying that more shelters is the solution to prevent homelessness.
▪ Instead, say : "Too many families are homeless"
• Accepting too easily the causal claims implicit in the problem definition
o Empirically evaluate the causal claims between the problem and its bad effects
o Thorough research
• Rigid problem definition
o Sharpen the problem definition after Step 2
o Will undergo several iterations
 Step 2: Assemble some evidence
• Most of the time will go in:
o Thinking
o Hustling data that can be turned into evidence
▪ Time consuming activity
• Evidence must support your problem definition and must help produce realistic possible policy outcomes
• Motivation should be to prove that your problem definition is actually a problem
• You will repeat this step in almost all subsequent steps of policy analysis but with a different focus
• Economize on your data collection activities
o Try and collect only those data that can be converted into evidence for your problem definition
• Evidence essentially solves 3 principal purposes:
o Assess the nature & extent of the problem
o Assess & identify possible policy alternatives/solutions
o Identify policies that have been thought by others solving similar problem
 Tips for effectively assembling evidence
• Think before you collect
o Be an efficient collector of data
o Keep thinking about what you do & don't need
o Avoid spending too much time collecting data that have little or no potential to be developed into evidence
• Value of any piece of evidence depends on these factors:
o The likelihood that it will help you substitute a better decision for the one you would have made without it
o The likelihood that the substituted decision will produce a better policy outcome
o The magnitude of the difference in value between the improved outcome & original outcome
• Review the literature
o Hardly exists a problem on whose causes & solutions is not being researched somewhere
o Journals, administrative data, public data, case studies
o Survey 'best practices'
o Study analogies and try and see how it fits into your problem definition & solutions
 Step 3: Constructing the alternatives
• Alternatives mean:
o Policy options
o Alternate courses of action
o Alternative strategies of intervention to solve the problem
• Initially contruct alternatives that are mutually exclusive
o Each of them must have the ability to solve a majority of problem
o One or more policy action, in conjunction with other alternatives, might solve/mitigate the problem at later
stages
• Begin with a comprehensive list of policy alternatives. Fine tune them in the later stages of analysis
o Discard some alternatives
o Combine some alternatives
o Re-organize some
 Tips for effectively constructing alternatives
• Ideas for initial list of alternatives
o Pet ideas that are already trying to solve the problem
o Look out for analogies- Alternatives that are trying to solve similar problems
o Try to invent alternatives that might prove to be superior to the current alternatives
o Keep budgets and targets in mind
• Refer to 'Things Governments Do’ (Taxes/Regulation/Subsidies & Grants/Service Provision/Agency
Budgets/Framework of Economic Activity/Education & Awareness/Reforms)
• Your first alternative must be 'status quo'
• Final list of alternatives will look different from the first set of alternatives
• Use simple sentences to conceptualize alternatives
 Step 4: Select the criteria
• With this step you enter the evaluative phase of policy analysis
o You must take value judgements
o Think whether alternatives X,Y or Z is good or bad
• You select criteria to judge the goodness of the projected policy outcomes associated with
alternatives
• The evaluative criteria are not used to judge alternatives, they are applied to the projected
outcomes
o Example:
Alterative A looks to be the best, therefore let's proceed with it
Alternative A will very probably lead to Outcome A, which we judge to be the best of the possible outcomes, therefore let's
proceed with it
 Step 4: Select the criteria
• Commonly used evaluation criteria
o Efficiency: Maximizing the net benefits. This is where cost-benefit analysis is done
o Equality, equity, fairness: Are benefits distributed equally among all sections of society?
o Timeliness: Are outcomes intended to be met within given timelines without long delays?
o Process values: Are alternatives consulted widely with different stakeholders
o Legality: Policy must not violate constitutional, statutory or common law
o Political acceptability: Policy should not have too much of political opposition or should not have
insufficient broad-based support
o Administrative robustness: Adequate state capacity, budgetary and administrative costs to implement
the policy
• Sometimes the criteria can contradict each other. Thus, it is necessary to give different weightage to the
criteria. Start by declaring one as the top priority- Dominant Criteria.
• Also, a good practice to define the criteria in your context
 Example: Select the criteria
• Criterion 1: Efficiency – The number of jobs created per million rupees spent by the government

• Criterion 2: Equity – Relative changes in income across all sections of the targeted beneficiaries

• Criterion 3: Timeliness – Time taken to bring down unemployment level from 12% to 5%

• Criterion 4: Administrative capacity – Lowest transaction cost and least amount of leakages

Construct the Criteria Matrix

• Use Efficiency, Equity, Timeliness, Administrative Capacity, Legality as criteria

• Define the criteria in your case

• Identify the Dominant Criteria

 Step 5: Project the outcomes
• Hardest step of the 8FP
• For each of the alternatives, project all outcomes (or impacts)
• 3 practical difficulties need to be confronted:
o Policy is about the future. Hence, subjective evaluation of outcome projections using research
o Realistic projections vs optimistic projections: Be realistic. Do not glorify your preferred alternative
o Think not only about the general direction but also think about the magnitude. Quantify the outcomes
• Put yourself in the place of relevant stakeholders & ask how you would react to the proposed alternative
• Look out for 'unintended consequences':
o Common undesirable but forseeable side effects of policy solution
o Increase in moral hazard: Policy has the effect of someone taking risk because the costs have been covered Example:
Raising the employment benefits may lead to declining incentives to search for a job
o Increase in costs due to over-regulation
 Step 5: Project the outcomes
• Construct an Outcomes Matrix

Criteria Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5

Cost (in crores) 10,000 13,000 11,000 40,000 30,000

# of jobs created 10,00,000 80,000 20,000 70,000 15,000

Time taken (yrs) 2 3 4 4 5

Possible 4.5% 3% 3% 5% 1%
leakages (in %)
Increase in 2.5% 3% 2% 1.5% 3.2%
taxation (in %)
Total score
• Projected outcomes must be technically feasible & meaningful
• Enter number or verbal descriptor
• If you cannot fill in the cell with a quantitatively expressed descriptor, you can fill + or -
 Step 6: Confront the trade-offs
• One of the policy alternatives may produce better outcomes than any of the other alternatives with
regard to every single evaluation criterion – Dominant alternative. No trade-off required
• If no dominant alternative, then do trade off:
o Common trade-offs is between money and goods or services
• The trade-off is done across the projected outcomes and not across the alternatives
• Not enough to say that Alt 1 is better than Alt 2. Analyst must focus on the outcomes
Alternative
Criteria
1 Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5
Cost (in crores) 4 3 4 5 4

# of jobs created 3 3 4 5 4

Time taken (yrs) 5 3 3 5 2

Possible leakages 3 3 4 4 2
(in %)
Increase in 5 3 3 5 1
taxation (in %)
Total score 24/25
Step 7: Decide
• If you have done all the other steps correctly, this should be the shortest step in 8FP
• You need to decide what to do based on your own analysis
• If you find this decision difficult then chances are you have not done the trade-offs
sufficiently
• If your favourite policy alternative is such a great idea, how come it's not happening?
• You would then come up other difficulties that possible exists in the way of the
successful implementation of your policy
• Most common sources of failure could be bureaucratic & stakeholders' resistance
Alternative 1
Step 8: Tell your story
• Use the Reverse Bollywood Format to present your policy recommendations:
• State the problem definition and the solution right upfront
• The solution statement should have the following aspects: In order to tackle "policy problem",
we have to do "preferred solution", which will achieve X in Y time and will cost Z
• Your final output will not contain all the steps that you did in the 8-steps
• Organizing framework:
• Problem definition & solution
• Treat each alternative as different sections
▪ Project outcomes for each alternative
• Summarize the trade-offs
Alternative 1