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Chapter 4: Policy Forecasting and Formulation (4. Problems of forecasting,…
Chapter 4: Policy Forecasting and Formulation
1. Policy forecasting
Process of predicting future direction/ course of actions towards a problem
what option is suitable for that particular problem
what action to take (new/ modify/ terminate policy
Forms of forecasting
Projection (future and past comparison)
Prediction (forecast future using present situation)
conjecture (based on informed/ expert judgment about future state
2. Purpose of forecasting
To plan for the best possible course of action among alternatives
To use past and present situation to determine the future
To shape the future in an active manner (past is fully utilized in shaping future plan
Why forecasting?
provide information about future changes in policies
permits greater control through understanding past policies, consequences
helps to shape the future in an active manner, regardless of past
provide insight into uncertainty
eg: prepared enough for future, accurate predictions
3. Methods of forecasting
2. Qualitative methods
(Judgmental)
Relies on opinion, judgment of human being
panels make decision based on expert judgment (personal experience, knowledge, intuition)
a) Consensus technique
(group opinion)
Face to face meeting
Interactive technique of decision making
Panel discuss and listen to opposing viewpoints
work together for consensus
Advantages and disadvantages
Provide time and space for face-to-face contact, two way communication
Help break down barriers between people and agency which serves them
People learn that agency is not faceless, uncaring, in charge are real people
Give a chance to respond directly to comments and dispel rumours/ misinformation
Inaccurate decision due to conflict of personal interest
Result lies in a the single person who dominates and makes the decision
Too many heads, delay discussion, time for decision making
Delphi Technique
A group of expert brainstorm decision making
cautiously selected panel in a systematic, interactive manner
open-ended question
repetitive questions
they do not know each other
take time to reflect and answer on new information
response gathered and repeated until satisfactory consensus reached
Advantages and disadvantages
elimination of interpersonal problem
efficient use of expert time
accuracy of solutions and prediction
Depends on members' skill and expertise
Moderator cannot predict competency
process to analyse answer is hard, harder to achieve mutual agreement
b) Genius forecasting
(individual opinion)
Subjective approach based on gut, intuitive
unspecified set of process to arrive to statements
different process for two geniuses
forecast based on luck, knowledge, insight, and intuition
Advantages and disadvantages
Cuts time and cost, not many people involved
reliable judgment on specific area, no need to analyse
less process, allow human input in decision-making
accurate, unbiased result
two contradict genius opinion
can be costly to pay for expert
difficult to find a reliable one
1. Quantitative methods
relies on hard data, statistic
for repetitive occurrence, to prepare for next
a)
Time series method
: past values data of variables to predict future
b)
Exponential smoothing method
: use statistical model
Advantages and disadvantages
clear objective, easy to achieve, has raw material
costly to obtain data (time consuming, energy to manage, analyse data)
need to hire person with good statistic skills, difficult to get and high pay
4. Problems of forecasting
1. Inaccuracy of data and info
data/ info limits accuracy of policy future
eg: Treasure underestimate federal budget deficit based on extrapolation trend
2. Limitation of forecasting methods and techniques
Quantitative method highly dependent on data and develop based on assumption. Assumption may be wrong, data may be insufficient
Qualitative method highly dependent on personal opinion. Genius and experts are not easily available, short in numbers
3. Invalid experts opinion
incorrect opinion, incorrect forecast
most recent events may influence to create overly pessimistic, optimistic forecasts
4. Personal bias
personal reasons such as nature, attitude, behaviour
optimistic people to pose optimistic forecast and vice versa
5. Inaccuracy of forecast
all qualitative forecasts assume characteristic of the past exist in the future
unexpected occurrence changes the economic, social, weather condition
it will affect decision and accuracy of forecast
longer the forecast, the less accurate it will be
5. Policy formulation
Process of formulating, developing acceptable course of action for the selected policy agenda
2 main elements of
policy formulation
1. Analysis
a) Analyzing the courses of action/ proposals
Is the actions valid to solve the problem, directed to the cause of problem or to ameliorate the problem
implementable
is budgetary cost for the proposal is acceptable or not
Analysis technique
Cost-Benefit Analysis
direct/ indirect benefit of addressing the problem
direct/ indirect benefit of the solution
direct/indirect cost for implementation
discount future net benefits
compare direct/ indirect present and future cost and benefit policy alternatives
b) Type/ category of
policy options to introduce
1. Inducement:
either positive/ negative in nature
reward/ punishment eg: tax exemption or penalty
2. Regulatory
to control and regulate the behaviour of people
eg: traffic ordinance, pollution issue
3. Enforcement:
enforcing certain rights/ duties they deserve
eg: human rights legislation, consumer rights
4. Allocation of power:
certain body is charged with power to improve certain situation
executive orders, judicial decision, MACC legislation
2) Authorization by policy makers
is it politically acceptable as to gain enough support from the legislator, po to be adopted?
will it be acceptable by the public if passed by law, inclined to comply?
Done through political process.
First reading, second reading, House of Senate and consent of YDPA
6. Policy actors
Three groups involved in policy formulation are:
policy analyist/ administrator (Govt agencies)
policy makers (Legislator)
interest groups
eg: PM, Cabinet, Ministries, Council (EPU)