Analytic Tools in the Policy Process:
What Works and What Does not?
ESD 11 December 6, 2000
Outline
 Available Tools for
– Economic
– Political
– Business / Finance
– Negotiation
– Sociometric
Policy Analysis
 Cases and
– Health
– Harbors
– Water
– Telecom
applications
 Discussion
of the ESD 11 Final Exam
Economic and Financial Tools
 Assumption:
Homo economicus
 Cost/Benefit Analysis
 “Social
Cost/Benefit” Analysis
 Trade-off Analysis
 Revenue Analysis
– IRR
Sociometric
 Survey Analysis
 Case
.
.
Study Analysis
Pareto
Dominated Alternatives
Attribute 1
Pareto Superior Alternatives
Attribute 2
Getting to Yes:The Principles
 Separate
the people from the Problem
– Tomorrow is another day…
 Focus
on the Interests not the Positions
– What is important to the negotiators?
– What are the attributes of a good outcome?
 Invent
Options for mutual gain
– Expand the alternative set
– “What are we missing?…”
 Insist
on using objective criteria
– How can we measure how we are doing?
Political Paradigms
 Analyses
–
–
–
–
that ASSUME rational behavior
Again Homo economicus ?
Bounded Rationality ?
Satisficing behavior?
Conflict avoidance behavior?
 The
Simple Paradigm
– Structural Functional Analysis
The Cases – What did you use?
 Transplant
 HarborCo
 Water
Case?
In California Case?
 African
 Other
Case?
Telecom?
Courses this semester?
Two Questions
 What
policy analytic tools did you use that you
“brought with you?”
 What
policy analytic tools would you have wished
to use that you did not, yourself or a team member,
have sufficient knowledge to use?
Policy Analysis: “Truths”
 Question
/ challenge the assumptions
 THE forecast is always wrong
 Communication is the key: Make it more
understandable not more complicated
 Measure the important variables not the variables
that are easy to measure
Lee, Ball and Tabors on Energy
Policy





Technology, not resource
depletion, is the driving force
for substition
The consequences of poor
strategies can be enormous
and unpredictable
Most forecasts are wrong,
therefore robustness is a critical
planning requirement
The task of analysts is to lay out
the options, not to tell the
decision makers what to do
Measure the right thing





Do not confuse the systems
approach with systems
analysis
Understand technologies and
manage them accordingly
Quality pays and cleaner is
cheaper
Don’t overemphasize science
and de-emphasize engineering
Government Sponsored R&D
projects in areas where the
government is not the user of
the results are usually
ineffective
The ESD 11 Final Examination
 When:
Friday December 15
 From: 9am to 4pm
 Where: Your choice (but alone)
 How: In and out on Email to BOTH
tabors@mit.edu and farzana@mit.edu
 Format:
– General Problem: A policy analysis based on the policy process
paradigm that we have discussed in class (and will discuss again
on Friday).
– Specific Problem: 5 to 7 stated issues around which your
response can be structured.
ESD 11 Final: Example
 For
your home country, or for a nation that you
have studied, provide a policy analysis of one of the
following issues. Focus your response on a concise
statement of the background to the problem and
then upon the “cast of characters” and the
individual positions and the logic of those positions.
Conclude with a discussion of a tactical strategy for
implementation of the policy discussed.
 Example of a proposed policy
– Absorption of CO2 by forests is a desired means of reducing
Global Warming.