On the uses of econometric models: A guide for policy makers

This paper reviews the evidence on ex ante and ex post forecasting with econometric models, considering in particular the role of human judgment in improving forecast accuracy. The importance of human judgment in econometric forecasting and the general superiority of ex ante over ex post forecasts provide evidence of model misspecification, which casts doubt on the validity of econometric policy simulations. An inadequate basis for selection among alternative models with differing policy implications undermines further the utility of these models in policy analysis and in testing hypotheses. Despite this record of performance macroeconometric models thrive and are widely used in policy analysis. Some reasons for their survival and importance in policy are suggested, and guidelines for the use of econometric models in the policy process are given.     

Prices,Devices, People,or Rules: The Relative Effectiveness of Policy Instruments in Water Conservation1

Water conservation policy is a natural laboratory for addressing general issues of relevance to policy analysis and public administration, particularly the relative effectiveness of policies in changing human behavior. Using multivariate regression analysis of a dataset comprised of more than 200,000 monthly observations of more than 19,000 household accounts over six years, this paper makes three main contributions. First, it contributes to the substantive area of water conservation policy by analyzing what works. Second, it contributes to our understanding of generic policy instruments. Third, it raises an important issue regarding standard assumptions about selection bias. The results support earlier work warning that offsetting behavior can negate engineering solutions to policy problems, but further indicate that adding communication to engineering solutions can create cooperation that overcomes offsetting behavior. They also provide evidence that appropriate regulation can be effective, and that pricing can be effective even when price elasticities of demand are low.     

When Are Nudges Desirable? Benefit Validity When Preferences Are Not Consistently Revealed

Cost-benefit analysis, as a tool of general use in policy analysis or as a mandated analytical process in some rulemaking, provides protocols for assessing the relative efficiency of policy alternatives. However, inconsistent and apparently irrational decisions by consumers in some situations call into question the validity of inferring the values that consumers place on outcomes from their observed choices. It also opens the door for “nudges” that change the architecture of choice to promote more “rational” consumer choice. Differences between decision utility and experience utility and the willingness of consumers to pay for reductions in temptation provide conceptual bases for thinking about the efficiency of nudges. However, assessment of nudges and their role in behavioral public administration should also recognize that heterogeneous preferences can result in increases in utility for some and decreases for others. Therefore, nudges require systematic assessment like other policy instruments.     

The state of training in public policy management in Ghana

This paper discusses the relevance and state of training in public policy management in Ghana. The author argues that the lack of an institutional base for policy analysis is evident in the abdication and paralysis of policy-making, as well as the inability of the management development institutions to institutionalize training programmes in public policy management. Recognizing politicians and bureaucrats as complementary actors in the policy process, it is argued that organizing training programmes for them could contribute to improved policy-making. The content, methodology, duration, target group and impact of current training programmes in public policy management are analysed. Although the dearth of relevant local reading material on policy issue is identified as a problem in the teaching of public policy in Ghana, reference is made to some available publications on local public policy issues which could supplement Western-biased reading materials. Other problems discussed are the heterogeneous background of course participants and the non-involvement of faculty members in policy making. The paper concludes with recommendations on policy preview workshops; seminars for politicians and senior bureaucrats; development of policy analysts; and complementarity among the local management development institutions.     

The Conditional Effect of Specialized Governance on Public Policy

What are the policy consequences of creating functionally specialized venues for decision making? This study directly compares special districts with general purpose local governments to evaluate how specialization influences responsiveness and policy choice. Previous theorizing has assumed that specialization should have the same effect across all policy contexts. The findings presented here show instead that its effect is conditional on the status of public problems. Objective conditions related to a policy issue more strongly influence the responsiveness of multipurpose legislatures than that of special districts; thus the institutional effect of functional specialization varies with the severity of the public problem. The result is that governing structure matters most where problems are least severe. The findings demonstrate the importance of considering policy context when analyzing the effects of political institutions.     

THE MANAGEMENT OF PUBLIC PROVISION

Abstract: This work addresses the special character of public management by positing some important distinctions under-represented in current academic literature. In exploring the primary distinction between public administration and public management, the analysis proceeds from a treatment of public management as control of a production process uniquely configured as a combination of policy brokerage and resource management, to a demonstration of the economic agency (value addition) of public managers. The paper also presents a contextual analysis of the scope and scale of the public sector as this pertains to a model of "public provision", and introduces some new ideas regarding the temporal characteristics of public management as it responds to a discrete set of three cycles: the budget cycle, the product cycle and the policy cycle.
This work aims to provide tools for analysis which both distinguish public administration from public management and distinguish the economic agency of private managers from that of public managers. The general argument is that the "public provision process", while similar to a conventional production process, contains unique and important responsibilities which need to be understood and defended. By the same token, public managers ought to be empowered by a knowledge and identity which express their importance as economic agents who contribute both to the commonweal and to the wealth of the nation.     

A policy-selection/ goal-formulation model for public systems

This paper attempts to present an analytical framework of analysis of problems relating to public systems. Current optimization models, which originated in the private sector, are not adequate to handle the complexity of the decision making processes in public policy analysis. The proposed model aims at lessening ideological debates over statements of goals, and it emphasizes policy selection through goal redefinitions where both goals and policies are formulated simultaneously. The model is based on an iterative process where consensus over policies is arrived at between the policy maker and the constituents of the public system. The principal feature of the model is that it incorporates political debates and bargains, and provides for the development of insight.     

Public Opinion, Public Policy and the Welfare State

A recurring problem in political analysis is to link public opinion to public policy. Public opinion has often come to mean the replies to structured questions in representative surveys. The task of connecting opinion and policy is complicated by the difficulty in interpreting replies to these surveys. The burgeoning literature on public opinion and the crisis of the welfare state has failed to provide a consistent account of what aspects of policy might be driven by public demand or vice versa. The interpretations of survey data are either misleading or highly selective. This applies to two crucial areas, attitudes towards poor minorities and opinions about state and private welfare. In order to provide a better understanding of the problems of linking policy and opinion and to offer some guiding principles for research in this area, this paper attempts to clarify some of these difficulties.     

USING LINEAR TREND MODELS TO ANALYZE POLICY IMPACT

Policy researchers have become increasingly familiar with a number of improved techniques for analyzing data obtained from interrupted time-series designs for evaluating public programs and policies. In this paper we contribute to this trend by presenting two groups of data analysis techniques which are not currently widely used by policy researchers, but are likely to be valuable adjuncts to traditional regression techniques for analyzing data obtained from interrupted time-series designs. First, aids for model specification are presented that enable the analyst to define an appropriate linear trend model—often one which will reduce the degree of multicollinearity and, therefore, produce more precise estimates of the impacts of a public program or policy. Next we consider approaches for point estimation and joint (simultaneous) interval estimation of a policy intervention's total effect at various points in time.     

The public issue life cycle and corporate political actions in China's transitional environment: a case of real estate industry

• Based on the ‘structured content analysis’ of the longitudinal data from a journal of Chinese real estate industry during last 11 years, this paper studies the nature of public issue life cycle and corresponding corporate political actions (CPAs) in a transitional economy. This paper finds out that in a transitional economy like China: (1) a new stage called ‘policy trial’ and double steps of policy introduction were found in the public issue life cycle; (2) the possible outcomes of Chinese public issues are partially consistent with Tombari's arguments; (3) the evolution of CPAs takes a more complex and different path compared with that in the West. In general, this paper provides an available research perspective (the public issue life cycle model) for firms to manage and monitor their external political environment by effectively developing CPAs in a transitional economy.

Copyright © 2008 John Wiley & Sons, Ltd.     

The growth effects of fiscal policy in Greece 1960–2000

This empirical paper uses annual data for Greece 1960–2000 to study the link between fiscal policy and economic growth. Our regression analysis implies that, although a smaller public sector can be good for growth, it is necessary to look beyond size; the composition and quality/efficiency of the public sector are equally important. The policy lesson is that a smaller government share in GDP, a reallocation of funds away from the wage bill to public investment, and an improvement in government quality/efficiency can become engines of long-term growth.     

国外住房问题和住房政策研究——回顾及启示

以文献资料法和比较分析法为基础，对国外住房问题和住房政策的研究进行了回顾——主要包括住房问题的产生、公共住房与住房福利、住房政策的比较和划分以及住房问题的主要研究方法。通过国外文献回顾有助于进一步认识和理解住房问题和住房政策。在全球化的进程中，当中国必须面对和住房问题相关的危机和困境时，一方面需要以全球视角不断借鉴国外解决住房问题以及制定和执行住房政策的经验，另外一方面也需要认清国内外形式，选择属于自己发展模式。     

Whatever Happened to Overloaded Government?

Anthony King was, among other things, an outstandingly acute public intellectual. His work on overload and policy fiasco exemplifies this. His original diagnosis in his famous paper of 1975 was deeply pessimistic in character, but subsequent adaptations by government solved many of the original problems arising from dependency relations. These adaptations amounted to the creation of a Madisonian system of regulation that insulated policy makers from democratic pressures. But these adaptations in turn created new difficulties that lie at the root of the analysis in King and Crewe's The Blunders of our Governments, published nearly four decades after King's original classic paper.     

A Cautionary Tale: Council Amalgamation in Tasmania and the Deloitte Access Economics Report

Contemporary Australian public policy has come to rely increasingly on technical reports produced by commercial consultants in contrast to the traditional approach, which employed disinterested public servants to generate the specialist information required to inform decision makers. This approach is fraught with problems, not least the fact that ‘hired guns’ have strong incentives to create the ‘answers’ sought by their employers. By way of a ‘cautionary tale’, this paper examines the empirical evidence adduced in favour of radical amalgamation of Tasmanian local authorities in Local Government Structural Reform in Tasmania, produced by Deloitte Access Economics (DAE) (2011), and commissioned by the Property Council of Tasmania. In particular, the paper provides a critical analysis of the econometric modelling undertaken in the DAE (2011) Report. We find that if the DAE model is re‐estimated – employing alternative functional forms – then the empirical evidence in support of Tasmania council merges evaporates.     

PUBLIC POLICY AS THE CONTINUATION OF MORAL PHILOSOPHY BY OTHER MEANS

The paper suggests that the oldest and newest glsubfieldslg of political science—political philosophy and public policy analysis–share important features lacking in those areas of the discipline that have modeled themselves after the natural sciences. Both are incompatible with the belief social sciences can be "value-free" and both are legitimate academic pur- suits that aspire to systematic and rigorous analysis of significant questions or problems. Fundamental considerations link the two enterprises. (1) Public policy analysis as currently practiced i s based largely on economics which i s the instantiation of a particular moral philosophy. (2) Logical problems in the basic assumptions of applied economics and policy analysis require the kind of fundamental reexamination to which moral philosophy can contribute.
The second section uses three health policy examples–tax expenditures that promote the purchase of health insurance, euthanasia, and long-term institutional care for the elderly–to show how moral philosophy can help in policy analysis.
The third section, an examination of Graham Allison's three epistemological models for understanding public policy, demonstrates that work in public policy also should stimulate philosophical inquiry.     

Political Institutions and the Opinion–Policy Link

The link between public opinion and policy is of special importance in representative democracies. Policymakers’ responsiveness to public opinion is critical. Public responsiveness to policy itself is as well. Only a small number of studies compare either policy or public responsiveness across political systems, however. Previous research has focused on a handful of countries – mostly the US, UK and Canada – that share similar cultures and electoral systems. It remains, then, for scholars to assess the opinion–policy connection across a broad range of contexts. This paper takes a first step in this direction, drawing on data from two sources: (1) public preferences for spending from the International Social Survey Program (ISSP) and (2) measures of government spending from OECD spending datasets. These data permit a panel analysis of 17 countries. The article tests theories about the effects of federalism, executive–legislative imbalance, and the proportionality of electoral systems. The results provide evidence of the robustness of the ‘thermostatic’ model of opinion and policy but also the importance of political institutions as moderators of the connections between them.     

Does Coproduction of Public Services Support Government's Social Equity Goals? The Case of U.S. State Parks

The growing phenomenon of government-supporting charities prompts the question of whether these institutions help or hinder public values of equity in service access. Logit and tobit regression analysis using multiple data sources from the California and Florida state parks systems compares public parks with and without supporting “friends” groups. The results suggest that while parks philanthropy has produced real benefits in rallying citizen support for improved public spaces, it also introduces some distributional consequences that policy makers should not ignore. Namely, a philanthropic failure hypothesis is supported whereby wealthier Florida counties with greater income inequality are more likely to benefit from a charity supporting a nearby state park. Finding no similar result in California, the authors conclude that the association between community wealth and park charity presence may also depend on state characteristics such as the funding structure of each state park system, not just community wealth differences.     

Improving Policy Effectiveness: Land Use Planning in a Devolved Polity

Improving public policy efficiency and effectiveness in land use planning is an established priority on the prevailing political agenda in the UK. Practical measures to enhance policy formulation in local land use development plans in Scotland offer an interesting case study of an attempt to improve policy consistency, and to secure efficiency gains in policy authorship. This article considers the specific focus on the drafting stage of public policy‐making drawing on insights provided by research into the production of model policies in Scotland. It questions the extent to which such an initiative will promote a more robust public policy‐making discipline in light of the policy cycle. The discussion of the case study illustrates a practical attempt by central government to enhance public policy‐making at the local level, while raising questions about the dangers of invoking a technocratic and instrumentalist approach to policy analysis.     

INTRODUCTION: WATER RESOURCES AND PUBLIC POLICY

Research in water resource policy historically has reflected more general trends in public policy analysis. This symposium focuses more narrowly upon a sample of some contemporary issues.