Goals vs. policies

Comparing outcomes rather than alternatives

Goals/alternatives/outcomes matrices

Sensitivity analysis

Forecasting

Trend extrapolation

Decision trees

Operations research/linear programming

Blackboard readings

Patton & Sawicki: 243 - 374

Policy analysis is a tough business because it often involves making educated guesses and assumptions that turn out to be wrong.  For example, it is common to hear about adjustments being made to unemployment, budget projections, and other financial forecasts.  For example, see this article from article from Bloomberg News (8/25/09) that describes a number of these types of errors. However, sometimes forecasts and projects are used to make important decisions.  For example, property tax evaluations are based on forecasts and projections and errors can have profound consequences.  See this article from the Star News (1/28/07) that looked at the previous property reevaluation in New Hanover County.  At a national scale, the Bureau of Labor Statistics (BLS) forecasts the Employment Cost Index (ECI) to help calculate raises for military and civilian employees (10/29/10).  Thus, the calculation of the ECI can have profound implications on the federal budget (10/29/10).  

One of the great truisms about forecasts is that they are usually wrong.  That doesn't mean that that they are not important in terms of helping making decisions or understand the basic parameters of a problem and what can and cannot be done to address them.  Moreover, while forecasts are the product of policy analysis, decisions are shaped and influenced by politics.  Our current federal budget deficit is a classic example.  The future CBO estimates paint a dire picture of the future budget deficits  (Politico 1/12) (See this article on CBO debt forecasts from 3/10).  President Obama even formed the National Commission on Fiscal Responsibility and Reform in February 2010 to evaluate proposals to addressing the growing problems of the national debt and deficit.  The Co-Chairs Erskin Bowles and Alan Simpson released their  Draft Recommendations powerpoint (11/10/10) and illustrative outline of savings (11/10/10).  Their final report was released in December 2010 entitled The Moment of Truth (December 2010).  None of the recommendations were implemented for largely political reasons as you can see from this collection of articles on the draft recommendations from President Obama's Deficit Commission (11/10/10).  The problem continues to worsen.  As you can see from this NY Times (3/10) article, an important tipping point has been reached and social security payouts exceed taxes.  As a result, the CBO's budget and economic outlook from 2012 - 2022 should be of serious concern but Congress is unwilling to Act and has been unwilling or unable to pass a federal budget to manage spending in nearly 4 years.  We continue to run deficits exceeding a a trillion dollars.  Moreover, as this article in the USA Today (5/12) demonstrates, the real deficit is actually much larger than advertised if standard accounting practices were used.  According to the CBO, the forecast is dire if action isn't taken (Washington Times 6/12).  Instead, the federal government continues to resort to variety of budget tricks and gimmicks to avoid making difficult choices.  For example, see this Washington Times article (11/24/11) that looks at how Congress is already spending funds from Obamacare on other purposes or these accusations in a NY Post piece (4/23/12) that argue that funds from Obamacare will be diverted for other political uses.  

Simulations are another important tool.  See this interesting article about the potential dangers of using computer-based analysis and simulations (USA Today 8/04). 

It also important to never forget that sometimes the best decision is not to make a decision and opt for more study or more information as a way of putting off making a decision.  This is often done for obvious political reasons.  See this interesting set of articles looking at whether President Obama should approve the Keystone XL  Pipeline (download article) (11/11)?  Does it surprise you to then read that he opted for more study a year before the election (Download article)?  While doing nothing sometimes helps avoid unpleasant political realities, it is also an important alternative and may be the only one for which you have complete information and thus also provides an important analytical tool or reference point for a policy analysis. 

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Figures - Evaluating alternatives

Figure - Different approaches and strategies for Policy Analysis

GAO report - Demonstrates how a budget simulation helps illustrate the growing social security crisis

Example of a NC Budget Forecast - Oct 2010

Example of a NC revenue outlook from January 2011 and the Joint Appropriations Briefing from January 2011. 

This simplified interactive budget cutting exercise from the NY Times website lets you explore the consequences of different scenarios

YouTube Spoof of Ben Bernank and the Federal Reserve's quantitative easing (QE2) monetary policy change (11/10)

See these local benchmarking reports that have have examples of performance measures for a Fire Services, Police Services, Residential Refuse, Fleet Maintenance, Central Human Resources, and Asphalt Maintenance for FY '10

Neustadt, Richard E. and Ernest R. May. 1986. Thinking in Time: The Uses of History for Decisionmakers. New York, NY: The Free Press.

Weiner, David L. and Aidan R. Vining. 1992. Policy Analysis: Concepts and Practice. Second Edition. Englewood Cliffs, NJ: Prentice-Hall.

Quade, E. S.. 1989. Analysis for Public Decisions. Third Edition.  Revised edition by Grace M. Carter. New York, NY: Elsevier Science Publishing Co.

Patton, Carl V. and David S. Sawicki. 1993. Basic Methods of Policy Analysis and Planning. Second Edition. Englewood Cliffs, NJ: Prentice Hall.

Majone, Giandomenico. 1993. Evidence, Argument, and Persuasion in  the Policy Process. New Haven, CT: Yale University Press

Rossi, Peter H. and Howard E. Freeman. 1993. Evaluation: A  Systematic Approach. Fifth Edition. Newbury Park, CA: SAGE publications

Singleton, Royce A., Jr., Bruce C. Straits, and Margaret Miller Straits. 1993. Approaches to Social Research. Second  Edition. New York, NY: Oxford University Press

Cook, Thomas D. and Donald T. Campbell. 1979. Quasi-Experimentation: Design and Analysis Issues for Field Settings. Boston, MA: Houghton Mifflin Company.

Roe, Emery. 1994. Narrative Policy Analysis: Theory and Practice. Durham, NC: Duke University Press.