Using Public Policy for Social Change - Part 3

Policy Formulation

Public Policy Change

The Political Formulation
of Policy Solutions: Arguments,
 Arenas, and Coalitions

We have concluded on the initial stages of policy-making, focusing on the crucial steps of issue framing and agenda setting. Next, we will delve into the subsequent phases of the policy-making process, including policy formulation and design and policy decision-making. 

Here's the path forward of what the next module will focus on:

First, we will delve into the policy formulation stage, which is called incrementalism. Incrementalism addresses conflicting interests among stakeholders by focusing on gradual, incremental changes rather than drastic or comprehensive overhauls. This approach acknowledges that complex conflicts often involve multiple actors with diverse interests, values, and information. We also cover the core concepts of policy design and some key references that can guide your work.

Second, we will delve into the decision-making phase of the policy process and some crucial skills in selecting what policy changes or reforms to ponder and strive for. More specifically, we will delve into the world of policy options analysis, examining the frameworks that can be used to consider a specific policy idea to guarantee that it aligns with multiple aspects.

Israel and the Palestinian Refugee Issue:
The Formulation of a Policy, 1948-1956

Let's explore the policy formulation process and how public policy changes. Data has shown that the majority of new public policies in the US and other democracies involve updates to existing policies, laws, and regulations. Policy formulation typically involves building upon existing policies that are already established. This is a major driver that the policy – making process is a cycle that cycle back repeatedly. Once more, Public policy in Western systems typically evolves through refinement of existing policies and then making small, incremental adjustments rather than comprehensive reforms. Incrementalism is the term used by political scientists to describe this process. There are several factors that incremental change is a common force in public policymaking. This encompasses the number and plurality, or a wide range of stakeholders and political actors, makes it difficult to implement major transformations. As previously discussed, It's tough when people gather and reach a mutual understanding on the methods of implementing change. However, there are also obstacles  in fostering agreement among diverse communities to align on the objectives of public policy, how to manage when faced with trade-offs, how to cope benefits and burdens, etc. The lack of capacity to forecast the outcomes, and the effects of big bold policy changes or new innovative policy approaches also directs policy decisions that focus on incrementalism. After all, the preferences of various stakeholders and frequently the public at large are for small, continuous efforts rather than slow, deliberate, yet larger reform. Let's explore some real-life examples using distinct approaches to policy change integrated within policy formulation.

China's One-Child Family Policy

It is undoubtedly true that policy change can be big and major. To demonstrate, consider these examples in 2016, China lifted its one-child policy and introduced a universal two-child policy, allowing all families to have two children. Another example is the Supreme Court's decision in June 2022 to reverse its earlier rulings, thereby eliminating the constitutional protection for abortion rights in the United States. This decision effectively devolved all abortion law and policy to the state level, with immediate effect. Additionally, it's possible that policy change can seem big if incremental policy is being employed by several governments in the same moment. To illustrate, if several US states were to enact a ban on assault weapons at the same time. For instance, the European Union's decision to ban the sale of new gas-powered vehicles by 2035 seems like a big change. Additionally, it is the case that the majority of policy initiatives addressing complex issues involve incremental steps and it accumulates gradually over time. For example, the global response to the public health issue of smoking and tobacco use has been evolving over time. Here, the emphasis has been on incremental policy adjustments, such as tobacco excise taxes, environmental tobacco smoke prohibitions, educational campaigns, and many other policy approaches. For instance, environmental regulations are typically developed, implemented and revised in a step-by-step process over time in most countries.

Incremental change can be a slow and unsatisfying process, leading to feelings of frustration and even unethical, considering that problems, inefficiencies, and inequities continue to affect people and communities, meanwhile the policy change is slow. It's essential to recognize that small actions can compound to produce significant outcomes. Incrementalism can be a source of frustration. However, it's crucial to acknowledge that the slow and steady approach can result in progress that would have been impossible to achieve through other means.

Let's consider a couple of examples, First, let’s examine the problem of health insurance coverage in the United States. The majority of the US population does not have health insurance. Health insurance is expensive for many and typically tied to employment. This approach is not typical of the approaches taken by other high-income countries. A comprehensive system of public health insurance programs and safety net health care providers has been established in the United States over decades. These programs include Medicare and Medicaid, the Children's Health Insurance Program, federally funded community health centers, and other initiatives. These programs are constantly evolving through incremental policy changes. In 2010, the US Congress passed the Patient Protection and Affordable Care Act, which is often referred to as Obamacare. Although the law was a significant piece of legislation, this law maintained the distinctive US approach to health insurance which relies heavily on employer-based coverage, coupled with public programs that maintain significant burdens for beneficiaries intact. For many, this reform was a significant shift, with both good and bad consequences. In reality, it was a collection of small, incremental changes.

Next, let's turn our attention to India and explore its transportation policy development. There are many transportation-related problems in India, which features a large and rapidly expanding developing country. This encompasses problems related to mobility or getting people moved around, problems related to congestion, injury, pollution, not to mention issues related to climate change. Transportation policy in India is subject to frequent revisions and updates at local, state, and national levels, reflecting shifting priorities and resource allocations. To summarize, there are two main points. First, public policymaking is a cyclical process that addresses societal issues and constantly evolving and improving over time. Second, policy changes are typically incremental, with small adjustments made over time rather than sweeping reforms.

Basics of Policy Design

Public policy design is a highly complex process. It takes many different forms, both within and across governments and countries. We will be examining the high-level and basic aspects the process of crafting public policy ideas. It occurs in various forms. The policy design process is influenced by the policy's goals and objectives. What is the problem it is trying to solve?  What needs to be changed about the problem or issue? Also, What is the current status of existing policy? What is currently being used, who are the individuals involved in the decision-making process? Who has the power to make policy changes? what policies are being promoted? Is it a formal policy? Or is this an informal type of policy? what are the actual outcomes? What policy levers are involved in the design? what is the policy mechanism in the design? In summary, All stakeholders should be considered in the policy design process. Which stakeholder groups will be allies and enthusiastic compared to which groups will be opposed to the policy? and what the policy is intended to change or accomplish? Also we should refresh our understanding of the basic elements of public policy design, encompassing that complex problems will be addressed through a variety of policy attention and change. No single policy solution can effectively address a complex problem. It's uncommon to need to develop a completely new policy approach from scratch. It's vital to recognize, prior to designing any policy, what other places have undertaken and have established and evaluated. Also, in intensely political and partisan environments, it's even more important to use objective data and evidence, and defining social problems, and crafting policy interventions and making arguments for them, including informed by data-driven analysis for their likely effectiveness and impact. In summary, it's important for your policy designs and proposals to be able to be justified in terms of their effectiveness, the economic resources involved, the benefits and burdens they encompass, and also their fairness. The major point It's crucial that you conduct thorough research. It's essential to utilize reliable data and evidence to comprehend the problem, what specific outcomes you want to see with policy change, what approaches have been implemented elsewhere and also the likely outcomes of your suggested changes.

An example a complex policy approach responding to a complex problem in the United States. The policy example here is the Black Maternal Health Momnibus Act of 2021, a comprehensive legislative package introduced by Representative Lauren Underwood of Illinois, a University of Michigan nursing school alumna. This bill combines 12 distinct policy approaches to address the pressing issue of racial disparities and maternal mortality in the United States, highlighting the importance of a multifaceted approach to tackle complex health challenges. Maternal mortality rates for black women are significantly higher than those for white women. The inequity has been increasing, rather than decreasing. The 12 different bills that are in the overarching Omnibus Act focus on things including improved data collection and quality of health care measures, a number of special populations of people at increased risk for maternal mortality, including women who are incarcerated while pregnant, and people with substance abuse and addiction problems.

Social Justice

The bill also includes provisions for healthcare and public health workforce development and  also within the overarching bill, funding for initiatives designed and implemented by community – based organizations for telehealth improvement, for community engagement regarding this serious problem and many other aspects. The first of the 12 bills and the overarching Omnibus Act was signed into law on November 21st, 2021. The Protecting Moms Who Served Act as defined in Senate Bill 796, commissioned a comprehensive study on veteran maternal health care and also allows resources to invest more in maternity care coordination at veterans' administrative facilities. The strategy of Congressmen Underwood and a number of her colleagues from both parties, and also a coalition of advocacy groups and supportive stakeholders is to continue working to get the rest of the remaining bills and the package on relevant agendas and then pass separately. It's a long road strategy, but also one that is needed to address this multifaceted problem of maternal mortality inequity.

There are many more aspects to consider in policy design. Reading below includes a variety of sources for discovering policy ideas, existing policies that have been proposed or are being considered in various places and also featuring the detailed language of policies that have been adopted.

Reading

Good Sources of Information on Public Policies: An Evidence-Based Policymaking Primer

Evidence-Based Policymaking Primer

Policy Priorities of Interest to You

What are two or three new policies or policy reforms that you believe should be a priority on policy agendas?

Affordable Housing:

Policy Reform: Implement policies that ensure affordable housing for low-income families, such as increasing funding for housing programs, expanding rent control measures, and promoting community land trusts. This can help reduce housing costs and improve living conditions for vulnerable populations.

Healthcare Coverage:

Policy Reform: Enhance healthcare coverage by expanding Medicaid eligibility, simplifying enrollment processes, and increasing financial assistance for low-income individuals. This can help more people access affordable healthcare services and reduce healthcare disparities.

Education:

Policy Reform: Implement policies that make higher education more affordable, such as free or reduced tuition for low-income students, increased funding for public education, and programs that support student loan forgiveness. This can help increase access to education and reduce financial burdens on students and families

For each policy, the following policymakers have the power or authority to act on the policy:

Affordable Housing:

• Ministry of Public Works and Public Housing (MoPWH): The MoPWH is responsible for implementing policies related to affordable housing, such as the Housing Finance Liquidity Facility (FLPP) and the public housing savings program (Tapera).
• Government Regulation No. 25 of 2020: This regulation outlines the Tapera program, which aims to provide affordable housing by collecting compulsory savings from the workforce segment.

Healthcare Coverage:

• Government of Indonesia: The government has made reducing the housing backlog and delivering affordable housing an explicit policy priority through initiatives like Satu Juta Rumah (One Million Homes).
• Development Partners: Organizations like the Department for Foreign Affairs and Trade (DFAT) and the Asian Development Bank (ADB) provide critical support to the government in advancing the housing sector reform agenda.

Education:

• Ministry of Education: The ministry is responsible for implementing policies related to education, such as free or reduced tuition for low-income students and programs that support student loan forgiveness.
• State Lawmakers: State lawmakers can pass laws and allocate funds for education, ensuring that all individuals have access to basic necessities like housing, healthcare, and education

And how would you describe the policy: formal vs. informal?

Affordable Housing

Formal Policy Examples:

• Government Regulations: Laws and regulations passed by legislative bodies, such as zoning laws and building codes, which ensure that housing developments meet specific standards.
• Executive Orders: Directives issued by the head of state or government, often related to specific issues like affordable housing initiatives or urban development projects.
• Judicial Decisions: Court rulings that establish legal precedents and shape the interpretation of laws related to housing, such as eviction procedures or tenant rights.

Informal Policy Examples:

• Community-Based Initiatives: Local community groups and non-profit organizations that work together to develop affordable housing projects, often through partnerships with government agencies.
• Private Sector Involvement: Companies and organizations that invest in affordable housing projects, either through direct construction or by providing financial support.
• Informal Settlements: Unregulated, unauthorized housing developments that emerge due to the lack of affordable housing options in formal markets.

Healthcare Coverage

Formal Policy Examples:

• Government Programs: Public health insurance programs, such as Medicaid or Medicare, which provide healthcare coverage to specific groups.
• Legislation: Laws that regulate healthcare, such as the Affordable Care Act (ACA) in the United States, which expanded healthcare coverage to more people.
• Regulatory Agencies: Government agencies responsible for enforcing healthcare regulations, such as the Centers for Medicare and Medicaid Services (CMS) in the United States.

Informal Policy Examples:

• Community Health Initiatives: Local community-based programs that provide healthcare services, often through partnerships with government agencies or non-profit organizations.
• Private Health Insurance: Companies that offer private health insurance plans, which may not be regulated by government policies.
• Informal Healthcare Systems: Unofficial healthcare systems that operate outside of formal regulations, such as traditional medicine practices or informal healthcare networks.

Education

Formal Policy Examples:

• Government Regulations: Laws and regulations passed by legislative bodies, such as education funding laws or curriculum standards.
• Executive Orders: Directives issued by the head of state or government, often related to specific issues like education reform or school funding.
• Judicial Decisions: Court rulings that establish legal precedents and shape the interpretation of laws related to education, such as school desegregation cases.

Informal Policy Examples:

• Community Education Initiatives: Local community-based programs that provide educational services, often through partnerships with government agencies or non-profit organizations.
• Private Education: Companies that offer private educational services, such as tutoring or online courses, which may not be regulated by government policies.
• Informal Learning Systems: Unofficial learning systems that operate outside of formal regulations, such as apprenticeships or informal mentorship programs.

Key Differences

• Formalization: Formal policies are officially recognized and codified, while informal policies are not.
• Structure: Formal policies follow a clear hierarchy and formalized rules, whereas informal policies are based on social networks and relationships.
• Accountability: Formal policies are enforced through formal institutions, whereas informal policies rely on personal relationships and social norms.
• Effectiveness: Formal policies are designed to ensure consistency and transparency, while informal policies can be more flexible but may lack accountability.

What policy levers are involved?

Affordable Housing

Zoning and Development Policies:

• Rental-Only Zoning: Encourage rental-only zoning to preserve and expand rental stock.
• Inclusionary Zoning: Mandate a portion of new developments to be allocated to affordable housing.
• Streamlining Development Processes: Simplify the process for developers to build affordable housing.

Financial Tools:

• Fees, Charges, and Taxes: Implement fees and charges that support affordable housing initiatives.
• Development Fees and Charges: Use these fees to fund affordable housing projects.
• Density Bonuses & Amenity Contributions: Offer incentives for developers to include affordable units.

Tools for Affordable Housing Protection and Creation:

• Rental Conversion Policies: Prevent the conversion of rental units into non-rental tenure.
• Tenant Assistance Policies: Protect tenants at risk of displacement due to major renovations or redevelopment.
• Land and Housing Acquisition: Use municipal land for affordable housing projects.

Healthcare

• Location-Based Policy Levers: School-Based Services: Provide health services within schools to increase utilization and acceptability. Integrated Care Models: Integrate healthcare services within schools to enhance access and utilization.
• Insurance-Based Policy Levers: Payment Levers: Implement payment mechanisms such as fees and capitation to influence healthcare utilization.
• Organizational Policy Levers: Regulatory Levers: Govern healthcare provider behavior through regulations.
• Community Education Policy Levers: Social Marketing: Educate the community about healthcare services through social marketing campaigns.

Education

• Location-Based Policy Levers: School-Based Services: Provide educational services within schools to enhance access and utilization.
• Insurance-Based Policy Levers: Payment Levers: Implement payment mechanisms such as fees and capitation to influence educational utilization.
• Organizational Policy Levers: Regulatory Levers: Govern educational provider behavior through regulations.
• Community Education Policy Levers: Social Marketing: Educate the community about educational services through social marketing campaigns.
• Tax Policy - Tax Expenditures: Restructure tax expenditures to benefit low-income households more, such as changing the mortgage interest deduction to a refundable credit. Tax Strategies: Implement a permanent first-time homebuyer’s tax credit or a “first-time home buyers savings plan” to help lower-income households.
• Community Engagement Policy Levers: Voluntary International Standards: Incentivize compliance through international standards and direct regulation. Multi-Stakeholder Dialogues: Engage with civil society and state actors to monitor and discuss policy developments.
• Alternative Oversight Mechanisms : HUD’s Office of Housing Counseling: Refocus counseling agencies on helping households select homes in low-poverty, high-opportunity locations. State and Local Programs: Review and refine programs to ensure they promote economic mobility for low-income families and families of color.
• Payment and Incentives Policy Levers - Formal Incentive Structures: Implement outcomes-based funding and other mechanisms to promote accountability.
• Educational Policy Levers: Social Marketing: Educate the community about healthcare and educational services through social marketing campaigns

What kind of an impact do you think your priority policies would have?

These policy levers can have a significant impact by:

• Increasing Affordable Housing: By implementing zoning and development policies, financial tools, and tools for affordable housing protection and creation, more affordable housing options will become available.
• Enhancing Healthcare Access: By providing school-based services, integrating healthcare services within schools, and implementing payment mechanisms, healthcare utilization will increase.
• Improving Educational Opportunities: By providing school-based services, integrating educational services within schools, and implementing payment mechanisms, educational utilization will increase.
• Promoting Economic Mobility: By restructuring tax expenditures, implementing tax strategies, and promoting community engagement, economic mobility will be enhanced.
• Increasing Transparency and Accountability: By implementing formal incentive structures and educational policy levers, transparency and accountability will be increased.

Policy Design: Practitioners Perspectives

Perspective of director of poverty solutions at the Ford School. Poverty Solutions is a university-wide initiative that aims to collaborate with communities and policymakers to develop innovative strategies for preventing and alleviating poverty. Their efforts have focused on a wide range of initiatives, including affordable housing, home repair, auto insurance, health policies, workforce development, and addressing child homelessness. Their mission is to leverage research, data, and evidence to drive meaningful change, transforming systems to better serve families struggling at the base of the economic ladder. In his own work, The director wrote a book called two dollars a day living on almost nothing in America. It was about very poor families in the United States and poor it in a particular way. Families living on no income. Although they had access to food assistance programs, they were still struggling financially and had no money to support themselves in the United States. 

What do you do when you don't have any money? The book explored how families managed to survive in a system where policies had led to a significant surge in the number of families facing financial hardship over a specific period, such as a month, quarter, or year. Following the publication of the book, it received a fair amount of attention and may have contributed to a policy moment. They embarked on a worldwide search for solutions and discovered the concept of child allowances. It appears that numerous countries have developed a straightforward policy that acknowledges the financial burdens of parenting and provides support to families. 

One approach is to offer a monthly allowance to help families cover essential expenses such as diapers, childcare, or school supplies. In every country that has implemented this policy, they have observed a significant reduction in child poverty. They assembled a group of 10 experts to write a paper proposing the modification of child tax credit policy to create a child allowance, a model that has been effective in other countries. The paper's findings, particularly the two-dollar-a-day threshold, played a significant role in shaping the discussion around child allowances. Some policymakers in Congress had been advocating for a child allowance for a long time and were already familiar with the concept. The paper's findings and recommendations caught the attention of some US senators who were considering introducing a bill to establish a child allowance. They used the paper as part of their research to introduce the American Family Act. The bill converted the child tax credit into a child allowance, providing $250 per child and $300 for young children.

When the American Family Act was introduced, He recall many people describing it as a "pie in the sky" idea. He knew that implementing a child allowance in the United States was a long shot, but as an academic, He felt it was important to discuss the idea. The concept of the American Family Act gained steam over time. What initially seemed like an impossible task became increasingly feasible as more policymakers expressed support for the bill. Advocates and Congress persisted in building support for the American Family Act, steadily increasing its popularity over time. When the COVID-19 pandemic struck, presidential candidate Joe Biden was seeking ways to support families with children during the challenging period. President Biden included the American Family Act in the American Rescue Plan, which was enacted into law in 2021. What happened was, Child poverty rates plummeted, and food hardship among families with children reached an all-time low. Families experienced significant improvements across multiple metrics.

 

The important thing to remember is, One, what was initially deemed impossible, gained traction and support, and when the time was right, policymakers were ready to consider it. It did happen, but unfortunately, it was not made a permanent. However, we are now in a significantly different situation. They have witnessed the impact of a child allowance in the United States. Only time will reveal whether we will revert to the previous path or continue to move forward, potentially leading to increased child poverty and worsening family conditions. However, policy entrepreneurship is crucial because it can illustrate what is achievable and build a strong case for policy changes, both now and in the future.

Policy Options Analysis

Prospective Policy Analysis: What Should We Do? (Part 1)

We will be conducting prospective policy analysis or analysis as decision support system that helps decision-makers. Policy options analysis, again, It is a form of prospective policy analysis. also referred to as ex ante, pre hoc, or anticipatory. And as the name implies, it is a predictive or prescriptive approach, aiming to forecast future events. attempting to forecast or predict future outcomes resulting from various policy options. Using the predictions, then provide recommendations to policymakers on the best course of action. This is an attempt to provide decision-makers with answers to the questions, what should we do about a particular social problem or policy issue?

We've discussed the policy cycle previously, an assessment of the current conditions is being conducted, then an assessment of potential interventions, then policy choices are made, then one or more policies is implemented, and afterwards, its impact needs to be evaluated. And the cycle begins again, we are currently in the second stage, which involves assessing potential interventions. This is a predictive and prescriptive policy analysis. Here are the key steps in a traditional policy options analysis. First, we need to clarify and define the problem, identifying the specific problem that decision-makers want to address. What is the problem? Data are essential for identifying and defining problems, as we've already mentioned. 

Step 2, we need to identify alternative policy options and, as always, the status quo is a policy that is often included. Status quo, The current policy or practice, without any modifications. In addition to the status quo, what policy changes could be considered and implemented? Then step 3, we need to assess the policy alternatives identified in step 2 using measurable criteria. Step 4, we will analyze and compare the policy alternatives using the criteria.  And 5,  we need to effectively communicate the findings to decision-makers. We will identify a limited set of policy alternatives, establish criteria for evaluation by comparing and contrasting them, and then analyze and communicate the results to decision-makers.

Prospective Policy Analysis: What Should We Do? (Part 2)

Let's continue our exploration of policy options analysis with an example. Let's consider the issue of rental housing. The affordability of rental housing is a pressing issue globally,  and we can see this from various data indicators, such as housing affordability, which is typically measured as the proportion of household income spent on housing. Housing insecurity, the threat of being forced out of one's home or losing a place to live. Housing instability, typically measured by the number of times a person or household moves within a given period. Homelessness, the condition of being without a home, which is often measured by the number of people who do not have a fixed address or a place to sleep. Another indicator of the rental housing market's dynamics is its availability. 

What is the rental housing stock in specific neighborhoods? Additionally, considering rental housing, how far are people commuting to find affordable and secure housing? What is the average time spent commuting? Because the time it takes to commute is another dimension of the problem, which is often measured in conjunction with the distance people live from their workplaces. What are some potential policy options for addressing the rental housing problem in a city? Housing affordability and housing insecurity are common concerns in many cities, with different frames and approaches to addressing them. However, the rental housing market in their city is plagued by a significant problem. What are some policy options that governments can implement to address? One policy option is rent control, which involves setting limits on rent increases to prevent excessive price hikes. Another, public subsidies for rent paid to landlords. The government can help individuals with their rent by providing subsidies and paying a portion of the rent directly to landlords. These programs are known by different names in different governments, such as Section 8 Housing in the United States, which provides a rent subsidy paid directly to landlords. 

Governments can use zoning laws to address housing affordability by requiring a certain percentage of apartments to be set aside for government-subsidized rentals. Additionally, governments can offer subsidies and incentives to encourage the private sector to build more affordable housing. If landlords receive government assistance for maintaining their properties, they may be less likely to pass on those costs to tenants, thereby preventing displacement.

Next, incentivize private developers to build more affordable housing. Low-interest loans can be provided to private builders to encourage them to build more low-income housing. Another policy option is to prevent displacement by assisting landlords with code enforcement costs, ensuring that landlords can maintain their properties without being forced to raise rents. There are numerous policy options beyond the ones mentioned, and many more can be explored. The first step in our analysis is to determine which policy options are actually on the table and being considered by decision-makers. A small and manageable set of options is preferable to a large and complex one.

 

The status quo option is often a default choice, where the current situation is maintained without change. Following this, we will evaluate policy options A and B, typically in comparison to the existing status quo. First, we narrow down the policy options to a reasonable number for analysis. This selection is typically made by stakeholders and decision-makers, not by the analyst. Following this, we assess each policy option based on a set of measurable criteria, comparing and contrasting. In the context of housing, there are several key factors we could consider, including the following: We could analyze, compare and contrast our policy options based on metrics such as housing stability rates, eviction rates, affordability levels, availability of low-income rental units, homeless population numbers, and commuting times and distances. We will evaluate our three options against all of these criteria. Additionally, we could evaluate the impact of each option on segregation. Do these policy options increase or decrease the racial segregation? Another concern in many cities is racial residential segregation, which we can quantify using tools like the Gini Index or the Index of Dissimilarity.

We will not conduct a comprehensive housing policy options analysis. In summary, here are the main points. To begin with, policy options analysis is heavily reliant on data and technical expertise, there’s an important role for data analysts. However, data alone cannot dictate policy decisions. This is because policy decisions inherently involve trade-offs and value judgments about those trade-offs. Policies always involve both benefits and burdens, and these are often distributed in an unfair manner. Policy options analysis is a crucial step in the policy-making process because it provides vital information and data to inform decision-makers. It is not a standalone solution.

Introduction to Forecasting and Policy Simulation Modeling

We will explore policy simulation modeling. Policies simulation models are a form of prospective policy analysis. This involves prospective policy analysis, where we forecast future outcomes or conditions in the future. What would the future look like if current policies continue unchanged? What would the future hold if we implement policy changes? Policy simulation models are complex technical projects that require extensive programming and data analysis. There are four primary types of simulation models used in decision science.

1. Microsimulation models are also known as Monte Carlo or risk analysis models.
2. Discrete event simulations models
3. Agent-based modeling and simulation
4. System dynamics simulation models

We will primarily concentrate on microsimulation models, which are the primary tools used in policy analysis. What is the definition of a microsimulation model? Microsimulation models are computer-generated forecasts that simulate the effects of government programs and policies on individual members of a population under various policy interventions. By micro units, to look at what the effects of policy changes might be on individuals, households, and small-scale organizations such as businesses.

These policy micro simulation models are primarily used to analyze the impact of policy changes. However, demographic processes such as birth, death, and migration are typically incorporated into these models.  The essential step in using the simulation is identifying its objectives. This can be categorized under the heading of projecting future outcomes under the status quo or different policy scenarios. The goal is to create a predictive tool that helps decision-makers forecast the future. As a team member, it is crucial to understand the assumptions that will be incorporated into the model to accurately forecast the future effects of new policies or programs. "These assumptions consider not only the effectiveness of a policy change but also its potential to create new or exacerbate existing inequities. There will be concerns about the cost issues and broader societal impacts. Additionally, these microsimulation models are used to assess the potential effects of various types of shocks, economic shocks like a recession or rising inflation, there could be environmental shocks like a natural disaster of some sort or other social shocks, rather than intentional policy changes. Models can be used to predict these kind of things as well.

Example: Mexico Pensions for the Poor Case Study

We recently discussed prospective policy analysis, which involves evaluating potential policies to inform future decision-making. One specific type of perspective policy analysis is policy options analysis. This case study examines a pressing social welfare policy issue and demonstrates the need for a policy options analysis under tight deadlines. For this case study, we are setting the scene in Mexico on December 23rd, 2006, and examining the Mexican federal government's policy options. Following the approval of the 2007 federal budget by the Mexican Congress. The budget included an allocation of 8.5 billion pesos. That's approximately $7.6 million USD in today's currency. This allocation was intended to support monthly pensions for senior citizens aged 70 and above. The budget allocated 500 pesos per month for the new pension program, which is equivalent to about $45 USD in 2016. The President of Mexico urgently requires our assistance to determine the eligibility criteria for the pension program. In this process, we will conduct a policy options analysis to identify potential solutions. Let's quickly review the key steps involved in a policy options analysis:

• Step 1: Verify and define the problem in detail.
• Step 2: Identify a set of reasonable policy options or alternatives to consider.
• Step 3: We need to establish the criteria for evaluating the different policy options or alternatives.
• Step 4: We need to analyze the policy alternatives using the criteria established in Step 3.
• Step 5: We need to communicate the outcomes of our analysis to decision-makers.

This report may or may not include our own recommendation, based on the analysis.

Step 1: Identify the problem. The context is that the Mexican Congress aims to allocate resources to address poverty among older people in Mexico, particularly those in rural areas. Data indicate that the urban poverty rate among individuals aged 65 and older was 35.6% at this time, with fewer than 10% of this population receiving a pension. Data indicate that the rural poverty rate among individuals aged 65 and older was 57.7% at this time, with less than 1% of this population receiving a pension. The Mexican Congress aims to enhance income security and alleviate poverty among individuals aged 70 and older by offering monthly pensions, with a focus on rural areas.

Step 2: policy options analysis requires to explore various eligibility criteria options, as this aspect of the policy was intentionally left open-ended by Congress. The President and his senior staff have proposed three distinct options for establishing eligibility criteria for the new pension program. Let's go through the three options together. The first option is that the new program would target individuals who have already been identified as requiring enhanced social welfare and healthcare benefits through the Opportunity Database. This program has identified households across Mexico, primarily in rural areas, as the target population. If we use this as the eligibility criteria, pensions would be awarded to:

·   Individuals aged 70 and older and households that have already been identified as eligible for the Opportunity Database program. This means that pensions would only be received by older individuals and low-income multi-generational households. The administration of this program would be straightforward since we already know which households meet the criteria.

·  The second option for eligibility criteria is that the new pension program could target individuals aged 70 and older residing in the smallest rural towns with a population of less than 2,500, as per the Mexican census.

·  The third option for eligibility criteria is that the monthly pensions would be directed towards individuals aged 70 and older residing in communities that the Mexican government has designated as socially marginalized. The Mexican government employs a social marginality index that assesses communities based on various indicators, assigning a rating from 1 to 5 to measure their level of marginality. The data include indicators such as healthcare accessibility, educational quality and accessibility, housing conditions, water availability, and sanitation. Communities and seniors with very high or high social marginality scores will be eligible for the pension under this criterion. There are three policy options we need to consider in this analysis. We have three different approaches to determining eligibility.

Step 3: We need to determine the criteria by which we will compare and contrast these three options. Efficiency is a crucial criterion and policy options analysis. That will be our initial criterion for comparing and contrasting the options. In this context, efficiency implies that only those who genuinely require the pension receive it, while those who do not need it are excluded. To better understand this, consider the rate of false negatives and false positives and the eligibility criteria. Another criteria is financial feasibility, how does the eligibility criterion align with the budget of 8.5 billion pesos allocated by Congress? Other criteria we can evaluate in this policy options analysis include administrative feasibility. What is the administrative and logistical feasibility of each criterion? We also could consider political feasibility. What are the winners and losers under each criterion? What political support or opposition can be expected for each of the options? Lastly, we should examine the ethical considerations of various approaches.

 

The first option focuses on households that are already receiving some services. The other two options focus on communities based on population size or socioeconomic and public health hardship. Are there ethical or fairness considerations associated with these criteria? We've thought about some criteria in step 2. Now we need to consider how we will assess those different criteria. Let's begin by considering the criteria for efficiency.

To assess efficiency, we will evaluate the leakage and under coverage in social welfare programs.

·  

Leakage refers to the degree to which different eligibility criteria would permit non-poor seniors to receive a pension. The eligibility criteria are not strict enough, allowing people who shouldn't be eligible to receive benefits. There are the false positive. These are the instances where eligibility is incorrectly granted. The criteria would permit non-poor individuals to receive pensions. The mathematical formula for leakage rate is easy to understand. The formula is the number of non-poor individuals admitted to the pension program divided by the total enrollment.

·  Similarly, under coverage or other measure of efficiency is the false negatives. Those who meet the eligibility criteria but are being included through the eligibility process. The formula for under coverage is also simple. It’s the number of poor individuals not enrolled divided by the total number of people in the program.

 

Next, Table 1, we must now determine how to evaluate financial feasibility. The budget for this program is capped at 8.5 billion pesos, as set by Congress.  At 500 pesos per month or 6,000 pesos annually, this translates to only approximately 1,416,667 individuals being able to be assisted. This is basic calculation. The 8.5 billion in the budget is divided by 6,000 pesos annually for the annual pension for one person. Any eligibility criteria that would allow in more than this number of people would not be financially feasible in terms of covering everyone who’s eligible. Then this in turn would increase our under coverage rate. 

Let's pause and examine how the three eligibility criteria align with our initial policy options based on efficiency and financial feasibility. Here, we are conducting an options analysis by comparing and contrasting various eligibility criteria for the new pension program based on key criteria in an options analysis. According to the oportunidades criteria, the second row of the table indicates a leakage rate of 25.8% and an under-coverage rate of 65.9%. Furthermore, from a financial feasibility perspective, this approach would result in approximately 860,000 individuals being covered by the pension program, which would not exhaust the entire budget allocated by Congress.

Moving to the next row, the eligibility criteria for seniors in small towns would result in a leakage rate of 42.4% and an under-coverage rate of 57.2%. This approach would identify approximately 1.4 million individuals for the pension program, which would not exhaust the entire budget but would reach its maximum allocation.

 

Table 1

Using the social marginality criteria, this approach would result in a leakage rate of 65.5% and an under-coverage rate of 44%. Moreover, this eligibility approach would identify more than three million individuals across the nation for inclusion in the pension program. Consequently, this approach would exceed the budget significantly, which would be unacceptable to Congress. We need to re-evaluate our analysis, taking into account that a significant number of individuals who would qualify under the criteria would not be able to be accommodated. If we can only cover less than half of those who qualify under this criteria, the under-coverage rate would surge to nearly 74%

What insights does this analysis provide regarding the various eligibility criteria in terms of their efficiency and economic feasibility? What trade-offs do you notice? What we need to consider now is which eligibility criteria approach is the most feasible and practical. Considering the challenges with efficiency and financial feasibility, do the additional criteria provide a clearer path to selecting the most suitable option?

What recommendation would you make to the President of Mexico, and what are the key reasons behind it? Would you also like to know which option was ultimately chosen? Through this practical policy options analysis, the chosen eligibility policy for the new social pension program in Mexico was Option 2 focusing on people aged 70 and older living in small towns. There are no absolute answers, and we're not making any moral judgments. Various stakeholders will likely arrive at distinct conclusions due to the numerous trade-offs involved. In the context of the study, the focus was on individuals residing in small towns with populations under 2,500. Additionally, it was agreed that if Congress increases funding for the program, the eligibility criteria would gradually expand to include larger towns over the next several years. In Mexico, the program initially targeted towns with populations under 2,500, subsequently expanding to include towns with populations up to 5,000, and then further to those with populations up to 10,000, and so on. Policy options analysis is a highly technical process that typically involves extensive data collection, mathematical modeling, and statistical analysis. However, the data alone cannot provide definitive answers. Instead, the analysis often involves navigating complex trade-offs, balancing competing interests, and considering the values and priorities of stakeholders.

Policy Justification Framework

Crafting a Policy Opinion and Justification

We will delve into and then employing a framework that will greatly facilitate your analysis when when considering a specific public policy and this becomes critical in the policy design phase when you need to guarantee that a policy change you are supporting can be justified across multiple dimensions. Public policy formulation involves:

Understanding the scope and limitations of government powers and when they can be used and when they should be used or not used.  It also involves determining the point that government intervention to promote public interests should give way to individual rights and private interests. it is necessary to strike a balance between government initiatives for the public interest and the defense of individual rights. Public policy design must carefully balance individual freedoms with the pursuit of public values and common goals to ensure that the public good is served. In democratic systems, various types of private interests must be taken into account when crafting public policymaking to ensure that the needs and concerns of all stakeholders are addressed. This includes the protection of individuals' personal interests, beliefs, values, and freedoms. This encompasses fundamental principles such as autonomy, liberty, equal protection, privacy, assembly, protest, speech, and the pursuit of happiness, which are all essential to ensuring individual rights and freedoms. Private interests encompass economic interests, encompassing the freedom to engage in various contracts, property ownership, and utilization, which are essential components of individual autonomy.

In capitalist economies, private sector markets are allowed to function with minimal government interference or regulation. When crafting or advocating for specific policies, policy professionals must consider two fundamental questions. First, how should public policy professionals approach designing and justifying policies that impact markets and individual interests? Secondly, how do public policy professionals justify what constitutes good versus bad public policy? this all seems a little bit complicated right now. A framework is available to guide our analysis of policies from various perspectives. This will enable you to form a well-informed and articulate view on the policy. Lawrence Gostin, a Georgetown University Law Center professor, has extensively written about the significant tensions between public and private interests. This is particularly relevant to public goods. This encompasses public health, education, public safety, and other essential services.

Professor Gostin emphasizes that oftentimes when policies expanding, policies aimed at protecting or reducing inequities in public goods are often presumed to be beneficial. Professor Gostin notes that government and policy professionals must justify policy interventions because they often infringe upon individual rights and interests and incur economic costs. Professor Gostin emphasizes that a policy's positive impact does not necessarily make it a good policy.  Professor Gostin developed a policy justification framework that facilitates comprehensive policy design by considering multiple criteria. This enables you to assess whether the policy is justified and aligns with your support or not.

This framework can be applied to policies at various stages, including development, implementation, or post-implementation evaluation. The framework provides a structured approach to evaluating policies, allowing for informed judgments about their effectiveness and justification. Initially, one may have a hasty or instinctive response to a new policy, either endorsing it as beneficial or dismissing it as flawed. For instance, several school districts in Michigan have recently implemented a policy prohibiting backpacks in an effort to mitigate school shootings. Do you have an initial response to this policy?

This framework will facilitate a structured analysis of policies from various perspectives, ensuring that our opinions are informed and well-articulated rather than instinctive and unmethodical. This framework is designed to be applied to a specific policy because the policy details matter. It does not work when applied to broad or vague set of policies. For instance, the framework is not effective for analyzing something vague, such as reducing coastal erosion. The specifics of a policy aimed at reducing coastal erosion are crucial for a thorough analysis.

The Gostin Policy justification framework consists of five key elements or stages:

• Step 1 - within the framework, the key consideration is whether the policy effectively addresses a substantial issue, hazard, or factor linked to a societal problem based on objective science? The framework encourages us to pause and assess whether the proposed policy genuinely addresses a problem and if so, whether it effectively tackles a crucial aspect of that problem.
• Step 2 – is really important. Does this policy have the desired impact? the framework assesses the policy's efficacy by ensuring a coherent alignment between the policy, its implementation, and its intended outcomes. Will this policy be effective? If a policy lacks efficacy, it is difficult to justify its implementation, particularly if it incurs significant economic costs.
• Step 3 - we must account for the economic expenses associated with the policy and we must evaluate whether the costs are reasonable in light of the expected benefits. Is the expected benefit justified by the expense? This aligns with our core focus on public sector efficiency. We need to assess the policy's cost-effectiveness, considering both the expenses and the expected outcomes.
• Step 4 - the framework requires us to evaluate whether the potential burdens on private interests and human and legal rights are proportionate to the expected benefits. Policies invariably entail both benefits and burdens. Having considered the benefits in the initial step, we now need to examine the burdens, and this encompasses burdens related to the infringement of individual rights and considerations of rights alongside market and economic impacts. We must consider both the benefits and burdens of the policy. We must evaluate whether the burdens and intrusions are justified by the expected benefits.
• Step 5 - takes a step further to evaluate the fairness of the distribution of burdens and benefits. Tax cuts for the wealthy typically benefit the wealthy, but they can also impose significant burdens on other groups, particularly if they lead to the erosion of social safety nets and essential programs. Another example, seatbelt laws have both benefits and burdens. Seatbelt laws have both benefits and burden consequences. This encompasses the burden of paying a fine, but do these benefits and burdens affect everyone equally? In the United States, individuals driving older vehicles and members of racial and ethnic minority groups are disproportionately targeted for traffic stops and subsequently more likely to receive traffic citations including for not wearing a seatbelt. This raises concerns about the fairness of policy implementation, and this consideration may influence an individual's decision to support or oppose the policy.

Some key points:

The framework does not necessarily yield a uniform consensus among all stakeholders. This exercise inherently involves subjective judgments, especially when we get to step 4 and 5. The evaluation of a policy's quality, justifiability, and effectiveness is going to depend in some large part on values. Additionally, individuals will assign varying levels of importance to the different components of the framework. The point of this framework is to ensure comprehensive consideration of multiple public policy aspects both its design and justification and this also means that just because a policy passes steps 1 and 2, an objective problem exists, and the policy will effectively address the issue. This factor does not necessarily imply a policy is effective or justified. Other factors must also be taken into account. It is crucial to identify the specific areas where our assessments diverge. These points are crucial for negotiation and conflict resolution in the policy design process.

Two Applications of Policy Justification Framework

We recently examined Professor Lawrence Gostin's five-step framework, which facilitates a comprehensive analysis of policy by integrating multiple perspectives. Let's illustrate this concept with a specific case. The framework's five steps provide a structured framework for evaluating policy effectiveness and justifiability. The five steps encompass the following critical dimensions of policy.

• Step 1 -  what is the policy's intended problem or issue? Does a substantial problem requiring policy attention?
• Step 2: Assess whether or not the proposed policy effectively addresses the problem as defined in Step one
• Step 3: Evaluate the financial implications and costs. Is the policy's projected value justified by the financial and economic expenditures involved?
• Step 4: Assess whether the policy's anticipated benefits are justified by the potential non-financial impacts, including encroachments on individual rights, private interests, and private markets. Are the benefits worth the restrictions or burdens that the policy might bring?
• Step 5: Beyond considering the overall benefits and burdens, we must also examine the policy's distributional implications and fairness. Is the policy equitable if it disproportionately affects or burdened certain groups, even if they do not receive any direct benefits?

Let's consider the specific case of implementing smoke-free policies in public housing. Let's examine the case of Australian Federal policy. The United States Department of Housing and Urban Development (HUD) introduced a new regulatory framework in late 2016. The new regulation granted public housing authorities nationwide a period of 18 months to adopt and enforce smoke-free policies in all their residential units. Under this policy, smoking cigarettes, cigars, pipes, and other products is strictly prohibited within apartments, common areas, and within a 25-foot radius of buildings within public housing complexes. Housing authorities have the option to provide smoking cessation assistance as part of their smoke-free policy implementation, but it is not mandatory. The affordable housing problem is escalating in the United States. Prior to the COVID-19 pandemic, it was projected that this policy would affect approximately 1.2 million subsidized housing units across the United States when it was initially implemented. Is the HUD smoke-free public housing policy can be justified?

Let's walk through the framework step by step.

• Step 1 - What is the problem? According to HUD, the primary issues this policy aims to address are the disproportionately high smoking prevalence among low-income housing residents. Additionally, the policy seeks to address the increased maintenance needs of apartments with smokers, including more frequent painting and carpet replacement. Consequently, this increases the maintenance expenses for these apartments.
• Step 2 - We assess whether or not the policy will be effective. Will this policy lead to a decrease in the expenses associated with maintaining individual units? Initially, we need to consider whether a smoking ban in public housing would lead to increased smoking cessation efforts. HUD has conducted a cost analysis and concluded that this policy is likely to decrease the maintenance expenses associated with public housing units. However, it remains uncertain whether the smoking ban in public housing will effectively reduce smoking among smokers. Moreover, it is anticipated that this policy will significantly decrease exposure to indoor environmental tobacco smoke, particularly among children residing in public housing. Consequently, this policy could yield both public health advantages and cost reductions.
• Step 3 - We must evaluate whether the economic costs are proportionate to the benefits derived from this policy. The economic impact of this policy on tenants is not well-defined. Furthermore, as we considered in Step 2, the policy is expected to decrease maintenance expenses. Additionally, it is worth noting that a similar outcome could be achieved by imposing higher rent premiums on smoking tenants or monthly fees, similar to a pet fee, commonly practiced in the private rental sector. According to HUD's analysis, this policy is expected to yield net cost savings, meaning it will generate more economic benefits than it incurs expenses. However, this analysis did not account for the possibility that charging smokers higher rents or a monthly fee could alter the overall financial impact of the policy.
• Step 4 - We will assess the potential burdens on private interests and human rights, and determine whether these burdens are proportionate to the expected benefits. Specifically, this policy bans adults from engaging in a legal activity within the confines of their own homes. This policy places significant constraints on smokers. Are the benefits we discussed earlier justified by the burdens and encroachments on private rights? Furthermore, do you consider it significant that this policy does not mandate the provision of smoking cessation services and resources? These are the key considerations we need to address in this step.
• Step 5 - We aim to thoroughly weigh the benefits against the burdens by acknowledging that this policy permits the government to encroach upon legal activities of private individuals within their own homes. Given their limited financial resources and dependence on subsidized housing. They are classified as dependents within the policy's target population. When discussing this, it is crucial to recognize that they are heavily reliant on public assistance. The United States is grappling with a severe affordable housing crisis. This reliance on subsidized housing is a symptom of a broader societal issue. The private rental market has developed a distinction between smoke-free and smoking-permitted apartment buildings. Additionally, as previously discussed, implementing higher rents or monthly surcharges for smokers.

Furthermore, as we previously discussed, this could involve charging smokers higher rents or additional monthly fees. The HUD policy imposes significant constraints on individuals who are forced to reside in public housing due to lack of alternative options. We must evaluate whether the policy's encroachment on private rights is justifiable and morally sound. As it turns out, this is more complex than initially anticipated. Considering all these factors, what is your final assessment? Can you conclude that the public cost savings and the expected health benefits, particularly those affecting children, outweigh any ethical reservations regarding the fairness of the benefits and burdens? Would you argue that, although this policy might be effective, it also generates significant distributive justice issues?

We find this policy issue particularly useful for illustrating the framework because it presents a challenging case where it's difficult to anticipate how individuals will ultimately evaluate the policy. Interestingly, political affiliation, party loyalty, and even professional background in public health do not appear to influence individuals' views on this policy. This policy has been highly controversial, with individuals holding diverse and often conflicting opinions about its merits. It is crucial that we carefully consider the multifaceted implications of each policy. Ultimately, we should strive to develop a nuanced understanding and be able to eloquently explain our stance on a policy, whether in support or opposition.

Another illustration is the public policy surrounding TikTok, another highly controversial topic. A handful of countries have implemented complete bans on TikTok, with notable examples being Afghanistan, Pakistan, and India. Numerous countries have imposed bans or restrictions on TikTok usage on official phones and devices, largely driven by security concerns. Thirty-seven states in the United States have prohibited TikTok on government-issued phones and devices due to security and privacy concerns.  Montana has become the first state to implement a comprehensive ban, while several other states are actively exploring similar measures. What are your thoughts on governments restricting TikTok access? Do you support a complete ban or a more targeted approach, such as limiting it on official devices? Select a particular policy related to TikTok and then apply the Goston framework to analyze and evaluate its implications. Hope you find the framework useful in exploring this policy and others, and that it enhances your understanding of the complexities involved. Through this exercise, you will gain valuable experience in crafting a nuanced and well-reasoned stance on a policy issue, refining your ability to think critically and develop a sophisticated perspective.

Source: cousera

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