part b unit 1 introduction to public policy (2)
TRANSCRIPT
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Business Economics (MBS First Year) Part B
Economic Policy Analysis
ByKhemraj Subedi
TMCLecturer
M.Phil Economics, M.A. Economics,M.Ed, Economics20th January 2016
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Unit 1:Introduction To Public Policy Analysis
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Public Policy; Analysis(Webster’s dictionary) Policy: 1. A definite course or method of action selected from among
alternatives and in the light of given conditions to guide and usually determine present and future decisions.
2. A projected program consisting of desired objectives and the means to achieve them.
Analysis: 1. Separation or breaking up of a whole into its fundamental elements
or components or component parts.2. A detailed examination of anything complex made in order to
understand its nature or to determine its nature or to determine its essential features, through a study.
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Public policy analysis
Policy Analysis is the process of assessing, and deciding among alternatives based on their usefulness in satisfying one or more goals or values.
Policy Analysis is client-oriented advice relevant to public decisions and informed by social values.
The job of analysts consists in large part of producing evidence and arguments to be used in the course of public debate.
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Meaning of Public Policy
Public policy is the means by which a government maintains order or addresses the needs of its citizens through actions defined by its constitution.
Public policy refers to the policies taken by the public authority or government into different sectors like industry, commerce, health, education, agriculture etc.
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The main objective of public policy is to serve and develop the people by providing conducive environment, which maintains the norms and values of the society for quality life and better human behavior.
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DefinitionsJames Anderson "Policy is the purposive
course of action followed by an actor or set of actors or in dealing with a problem or matter of concern."
• Forhock,"Public policy is a pattern attempted either to save or manage political disputes, or provide rational incentives to secure agreed upon goals with policy issues capable of ranging far and wide over both material goods and ethical issues."
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To sum up, public policy is a
proposed and purposive course of
action that is directed at achieving
certain goals or at solving the
specified problems faced by persons,
group, society or a nation as a whole.
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The authorities involved in public policy formulation
• Legislatures,• Executives,• Administrators,• Councilors,• Judges• Paramount Chiefs,• Elders,• Monarchs,
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Characteristics of Public Policy The public policy includes the following
characteristics:• Public policy is goal oriented.• Public policy is a course of action.• What to do?• Public policy may have positive or negative
form.• Public policy is law based and authoritative.• Public policy is an applied social science.
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Stages of Public Policy • Policy demand• Policy decisions.• Policy statements.• Policy Implementation.• Policy outputs.• Policy outcomes.
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Theory of Public Choice
• Public choice theory is a branch of
economics that developed from the
study of taxation and public spending.
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Public choice is an application of self interest and utility maximization to explain political behaviour.
Public choice theory seeks to understand and predict the behaviour of politicians and bureaucrats in the polity by utilizing analytical techniques developed from economics, based on the postulate of rational choice.
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In public choice, the actors assumed
to seek their own self interest as in
the market place are; individuals and
voters, interest groups, bureaucrats,
& politicians/legislatures
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Historical Background
Public choice theory emerged in the
sixties and received widespread public
attention in 1986, when James
Buchanan, one of its two leading
architects (the other was his colleague
Gordon Tullock), was awarded the
Nobel Prize in economics.
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• In addition to providing insight into how public decision making occurs today, public choice analyzes the rules that guide the collective decision-making process itself. These are the constitutional rules that are made before political activity gets underway. The work done by James Buchanan and Gordon Tullock on The Calculus of Consent, is one of the classics of public choice.
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Public choice takes the same principles that economists use to analyze people's actions in the marketplace and applies them to people's actions in collective decision making. Economists who study behavior in the private marketplace assume that people are motivated mainly by self-interest.
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It postulates that there are maily four players involved in public policy
They are: Politicians, General voters, Bureaucrats & Special interest group
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Key terms of theory of pubic choice
Public goods vs. private goods.Externalities,Public goods and free riders,Implication for voluntary action, Constitutional choice,Economic man and bureaucracy, Voting rules and bureaucracy,Market vs. hierarchical organization.
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Assumptions of Public Choice Theory
Ostrom & Ostrom (1971) noted that following four public choice assumptions about individuals:
Self-interest,Rationality,Benefit maximizing , & Uncertainty minimizing.
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Use of Public Choice in Managerial Decision Making
Public policy is an important concern for the administrators, academicians and the public in large.
The importance of the study of public policy has assumed a great significance particularly with the increase in the scope and size of the public sectors.
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use of public policy in managerial decision making are:
Scientific reasons. Professional reasons. Political reasons. Utility to general public.Utility to business decision making. Utility to statesman.Utility to administrative official.
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Institutions, Processes and
Behaviours
Environmental Forces and conditions
Public Policies
AB
C
D
E F
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Linkage A : The effect of environmental forces and conditions on political and governmental institutions, processes, and behaviours.
Linkage B: The effect of political and governmental institutions, processes and behaviours on public policy.
Linkage C: The effect of environmental forces and conditions on public policy.
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Linkage D : The effect (feedback) of public policies on environmental forces and conditions.
Linkage E : The effect (feedback) of political and governmantal institutions, processes and behaviours on environmental forces and conditions.
Linkage F: The effect (feedback) of public policies on political and governmental institutions, processes, and behaviours.
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Environmental Political System Public Policy
Wealth Governmental form Civil rights policies
Urbanization Constitutional type Income redistribution
Economic system Bureaucracy Educational policies
Educational levels Party system Welfare policies
Inequalities Power structure Health Policies
Class structure Pattern of participation Foreign policies.
Cultural patterns Interest group system Defense policies
Racial compositions Level of conflict Tax policies
Religious make-up Characteristics of elites Public spending policies
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Thanks