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PUBLIC POLICY ANALYSIS An Introduction Third Edition William N. Dunn Graduate School ofP ublic and International A.ffa irs University ofP ittsburgh ------ PEARSON PrPntice IIall Upper Saddle River, New Jersey 07458 Library of Congress Cataloging-in-Publication Dunn. \\tlliam N. Public policy analysis: an introductionJ\\i an lnl:m:les bibliographical references and index. - -13-183993-4 Political planning-fa ~=rl-tlDirector: Charlyce Jones Owen J!oc:i:;:::silicltllS Editor: Glenn Johnston !Ei:i;i:l:r-iLI Assistant: Suzanne Remore IJC:"CCEDr of Marketing: Beth Mejia !ll:llldlni-ng Assistant: Jennifer Bryant Jr=:c.daca·on liaison: Marianne Peters Rio IH!::l~cfa:::turing Buyer: Sherry Lewis Art Director: Jayne Conte Design: Jayne Kelly C.CllillPC~ition/Full Service Project Manager-_ X.:;i:::i::xx:i.. Pxne Tree Composition, Inc. rer/Binder: R.R. Donnelley and ons . Phoenix Color Corp. 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Ltd Pearson Education, Canada, Ltd Pearson Education-Japan Pearson Education Australia PTY, Limited - - - PEARSON Pn'lltiC'P 1<9 87654321 Ball ISBN 0-13-097639-3 PREFACE TO THE THIRD EDITION This edition of Public Policy Analysis, like its two predecessors, is intended both as a textbook and as an extended critical essay on the field of public policy analysis. The primary audience for the book is upper-division undergraduate and graduate students completing their first course in multidisciplinary policy analysis. Because the book addresses concerns of several social science disciplines and social profes sions, it provides case materials and examples in policy arenas including: energy and environment economic and social development foreign affairs urban affairs public health transportation and safety criminal justice employment and labor social welfare education science and technology communications This book takes a pragmatic, critical, and multidisciplinary approach. One of my beliefs is that the theory and practice of policy analysis must be distinguished from that of the disciplines in which policy analysis originates. Although policy analysis builds on political science, economics, and other social science disciplines and social professions, it also seeks to transform them into a new multidisciplinary whole. In this context, I define policy analysis as a process of multidisciplinary in quiry that creates, critically assesses, and communicates information that is useful for understanding and improving policies. This book recognizes that many of the concepts and methods of this multidis ciplinary field are likely to be unfamiliar. For this reason special instructional de vices and learning strategies are employed throughout the book: • Advance organizers. The book uses advance organizers, especially visual displays, to introduce students to the logical structure of methods and tech niques covered later. The advance organizer for the book as a whole is the information-processing model of policy inquiry presented in the first chapter and throughout the book. This and other advance organizers help students grasp complex relations and critically examine the assumptions that underlie theories, methods, and techniques. • Learning objectives. The objectives that students should attain by reading each chapter and completing related assignments are listed at the end of that chapter. I have tried to state these objectives in terms of the acquisition of knowledge and skills to do or perform something. For example, learning ob jectives refer to the acquisition of knowledge and skills needed to recognize, xiii Preface to the Third Edition xiv define, understand, compare, contrast, explain, predict, estimate, evaluate, synthesize, diagnose, plan, and apply. By stating objectives in this way the emphasis is on active rather than passive learning, on application rather than regurgitation. • Key terms and concepts. It is important to build a multidisciplinary vocabu lary of policy analysis. Key terms and concepts of policy analysis are defined when first introduced in the text and listed at the end of each chapter. • Review Questions. Knowledge and skills in policy analysis must be reinforced. For this reason, review questions are provided at the end of each chapter. The review questions address two kinds of skills: so-called higher-order skills in conceptualizing, interpreting, explaining, synthesizing, evaluating, and apply ing; and lower-order technical skills in calculating, estimating, and computing. Review questions may be used by students for self-study and by instructors who are developing written assignments, examinations, and tests. • Demonstration F.xercises. Knowledge and skills do not stick unless there are frequent opportunities to apply them to real-world problems. For this reason, each chapter contains cases that supply a basis for demonstrating the applica tion of different kinds of knowledge and skills. By completing demonstration exercises students are drawn away from idealized notions of "perfect" analysis ("blackboard policy analysis") and empowered by analyzing real-life problems. • Reference. In addition to literature cited in footnotes, each chapter is accom panied by suggested readings keyed to the issues addressed in the chapter. In this edition, I have attempted to include literature that is representative of many of the most recent developments in public policy analysis. • Guidelines for written and oral communication. Students who master meth ods and techniques of policy analysis often experience difficulties when they must not only obtain proper analytic and quantitative solutions, but also com municate conclusions and recommendations in the form of policy memo randa, policy issue papers, and oral briefings. To overcome these difficulties, appendices present step-by-step guidelines on how to prepare policy issue papers (Appendix 1), executive summaries (Appendix 2), policy memoranda (Appendix 3), and oral briefings (Appendix 4). In addition, a new chapter (9) examines the process of policy communication and offers strategies for improving it. • Tbe political context ofp olicy analysis. Two newly written chapters address the process of policy analysis (Chapter 1) and its role in the policymaking process (Chapter 2). Policy analysis is treated as a systematic intellectual ac tivity embedded in a political process. The emphasis in these chapters is on political factors that facilitate and constrain the use of policy analysis in real life settings. • Policy argumentation, public discourse, and critical thinking. A newly de veloped chapter on policy argumentation (Chapter 8) shows how analysts can translate even the most specialized technical analyses into policy argu- Preface to the Third Editon xv ments, thus contributing to processes of public discourse and policy debate. The chapter also elaborates the many forms of reasoning-political, eco nomic, ethical, legal-that are used in policy debates. Finally, by systemati cally examining policy arguments, students engage in a process of critical thinking whereby the assumptions underlying many forms of policy argu mentation are raised to a level of explicit consciousness. In the past twenty and more years this book has been used and evaluated in regular degree programs in social science departments and in professional schools of public policy and public administration in this country and abroad. The book has also been used and evaluated in training programs and projects in government agencies. The extensive revisions incorporated in this third edition reflect much of what I have learned from these evaluations, from my own teaching and training experiences, and from doing policy analyses and other applied research projects for agencies at the local, state, national, and international levels. By now there are so many students and faculty colleagues whose reactions have improved this book that a full list is too long to present here. I will say only that students in the MPA Program in Public Management and Policy and the Ph.D. Program in Public Policy Research and Analysis, both in the University of Pitts burgh's Graduate School of Public and International Affairs, have provided insights, criticisms, and suggestions which have improved this book. In addition, colleagues in Pittsburgh and elsewhere have offered helpful advice on various parts of the book, directly and through discussions of my published journal articles and papers. I wish to acknowledge those who reviewed this and previous editions when they were being prepared. These include David Nice of Washington State Univer sity, David Houston of the University of Tennessee at Knoxville, and Louise Com fort of the University of Pittsburgh. Sheila Kelly, Lien Rung-Kao, Sujatha Raman, and Eric Sevigny assisted in preparing materials for this and previous editions. I am grateful to Kate Freed for editorial and technical assistance and to John Shannon for guiding the book through the production process. · William N. Dunn Graduate School of Public and International A.ffa irs University of Pittsburgh CONTENTS ... Prefa ce to the Third Edition xiii 1 TIIE PROCESS OF POLICY ANALYSIS 1 The Process of Policy Inquiry 2 Multidisciplinary Policy Analysis 3 Policy-Relevant Information 3 Policy-Informational Transformations 5 Policy-Analytic Methods 6 Three Cases of Policy Analysis 8 Forms of Policy Analysis 10 Retrospective and Prospective Analysis 10 Descriptive and Normative Analysis 14 Problem Finding and Problem Solving 14 Segmented and Integrative Analysis 15 The Practice of Policy Analysis 16 Reconstructed Logic versus Logic-in-Use 16 Methodological Opportunity Costs 17 Critical Thinking and Public Policy 19 The Structure of Policy Arguments 20 Dynamics of Argumentation, Public Discourse, and Debate 22 Chapter Summary 23 Learning Objectives 23 Key Terms and Concepts 23 Review Questions 24 Demonstration Exercise 24 References 25 Case 1. Multidisciplinary Policy Analysis- Benefits, Costs, and Consequences ofH ighway Safety 25 2 POLICY ANALYSIS IN TIIE POLICY-MAKING PROCESS 33 Some Historical Background 34 Early Origins 34 v Contents vi The Nineteenth-Century Transformation 37 The Twentieth Century- And Beyond 39 The Policy-Making Process 43 44 Models of Policy Change 47 Comprehensive Economic Rationality 48 Second-Best Rationality Disjointed lncrementalism 50 51 Bounded Rationality 52 Mixed Scanning 53 Erotetic Rationality Critical Convergence 53 54 Punctuated Equilibrium Policy Analysis in the Policy Process 55 55 Potential Uses of Analysis 58 Uses of Analysis in Practice 61 Chapter Summary 61 Learning Objectives 61 Key Terms and Concepts 62 Review Questions 62 Demonstration Exercise 64 References Case 2. Are Policy Analysts Technocrats? 64 71 3 STRUCTURING POLICY PROBLEMS 72 Nature of Policy Problems 72 Beyond Problem Solving 75 Characteristics of Problems 77 Problems verses Issues 79 Three Classes of Policy Problems Problem Structuring in Policy Analysis 81 Creativity in Problem Structuring 82 Phases of Problem Structuring 82 85 Errors of the Third Type (Em) 86 Types of Policy Models 87 Descriptive Models 88 Normative Models 88 Verbal Models Contents vii Symbolic Models 89 Procedural Models 91 Models as Surrogates and Perspectives 91 Methods of Problem Structuring 96 Boundary Analysis 96 Classificational Analysis 99 Hierarchy Analysis 103 Synectics 106 Brainstorming 108 Multiple Perspective Analysis 110 Assumptional Analysis 112 Argumentation Mapping 115 Chapter Summary 117 Learning Objectives 117 Key Terms and Concepts 117 Review Questions 118 Demonstration Exercise 119 References 120 Case 3. Problem Structuring in Mine Safety and Health, Traffic Safety, and job Training 122 4 FORECASTING EXPECTED POIJCY OUTCOMES 129 Forecasting in Policy Analysis 130 Aims of Forecasting 132 Limitations of Forecasting 132 Types of Futures 134 Goals and Objectives of Normative Futures 135 Sources of Goals, Objectives, and Alternatives 136 Approaches to Forecasting 137 Objects 138 Bases 138 Choosing Methods and Techniques 142 Extrapolative Forecasting 142 Classical Time-Series Analysis 143 Linear Trend Estimation 145 Nonlinear Time Series 150 Exponential Weighting 156 Contents viii 157 Data Transformation Catastrophe Methodology 159 162 Theoretical Forecasting 163 Theory Mapping 167 Theoretical Modeling 168 Causal Modeling 170 Regression Analysis 176 Point and Interval Estimation 178 Correlational Analysis 180 Judgmental Forecasting 181 The Delphi Technique 188 Cross-Impact Analysis 193 Feasibility Assessment 197 Chapter Summary 197 Learning Objectives 198 Key Terms and Concepts 198 Review Questions 198 Demonstration Exercise 200 References Case 4. Political Consequences of Forecasting: Environmental justice and Urban Mass 201 Rapid Transit 215 5 RECOMMENDING PREFERRED POLICIES 216 Recommendation in Policy Analysis Recommendation and Multiple Advocasy 216 217 Simple Model of Choice 220 Complex Model of Choice 222 Forms of Rationality Criteria for Policy Recommendation 223 230 Approaches to Recommendation 231 Public versus Private Choice 232 Supply and Demand 234 Public Choice 236 Cost-Benefit Analysis 237 Types of Costs and Benefits 240 Tasks in Cost-Benefit Analysis 244 Cost-Effectiveness Analysis Contents ix Methods and Techniques for Recommendation 247 Objectives Mapping 248 Value Clarification 248 Value Critique 250 Cost Element Structuring 251 Cost Estimation 253 Shadow Pricing 254 Constraint Mapping 256 Cost Internalization 257 Discounting 259 Sensitivity Analysis 263 A Fortiori Analysis 263 Plausibility Analysis 264 Chapter Summary 267 Learning Objectives 268 Key Terms and Concepts 268 Review Questions 268 Demonstration Exercise 270 271 References Case 5. Saving Time, Lives, and Gasoline: Benefits and Costs of the National Maximum Speed Limit 271 6 MONITORING OBSERVED POLICY 276 OUTCOMES Monitoring in Policy Analysis 277 Sources of Information 278 Types of Policy Outcomes 280 Types of Policy Actions 280 Definitions and Indicators 282 Approaches to Monitoring 284 Social Systems Accounting 287 Social Experimentation 291 Social Auditing 295 Research and Practice Synthesis 297 Techniques for Monitoring 302 Graphic Displays 302 The Gini Index 307