Policy


Policy is a deliberate system of guidelines to guide decisions and achieve rational outcomes. A policy is a statement of intent and is implemented as a procedure or protocol. Policies are generally adopted by a governance body within an organization. Policies can assist in both subjective and objective decision making. Policies used in subjective decision-making usually assist senior management with decisions that must be based on the relative merits of a number of factors, and as a result, are often hard to test objectively, e.g. work–life balance policy. Moreover, governments and other institutions have policies in the form of laws, regulations, procedures, administrative actions, incentives and voluntary practices. Frequently, resource allocations mirror policy decisions.
Policies intended to assist in objective decision-making are usually operational in nature and can be objectively tested, e.g. a password policy.
The term may apply to government, public sector organizations and groups, businesses and individuals. Presidential executive orders, corporate privacy policies, and parliamentary rules of order are all examples of policy. Policy differs from rules or law. While the law can compel or prohibit behaviors, policy merely guides actions toward those that are most likely to achieve the desired outcome.
Policy or policy study may also refer to the process of making important organizational decisions, including the identification of different alternatives such as programs or spending priorities, and choosing among them on the basis of the impact they will have. Policies can be understood as political, managerial, financial, and administrative mechanisms arranged to reach explicit goals. In public corporate finance, a critical accounting policy is a policy for a firm or company or an industry that is considered to have a notably high subjective element, and that has a material impact on the financial statements.
It has been argued that policies ought to be evidence-based. An individual or organization is justified in claiming that a specific policy is evidence-based if, and only if, three conditions are met. First, the individual or organization possesses comparative evidence about the effects of the specific policy in comparison to the effects of at least one alternative policy. Second, the specific policy is supported by this evidence according to at least one of the individual's or organization's preferences in the given policy area. Third, the individual or organization can provide a sound account for this support by explaining the evidence and preferences that lay the foundation for the claim.
Policies are dynamic; they are not just static lists of goals or laws. Policy blueprints have to be implemented, often with unexpected results. Social policies are what happens 'on the ground' when they are implemented, as well as what happens at the decision making or legislative stage.
When the term policy is used, it may also refer to:
  • Official government policy
  • Broad ideas and goals in political manifestos and pamphlets
  • A company or organization's policy on a particular topic. For example, the equal opportunity policy of a company shows that the company aims to treat all its staff equally.
The actions an organization actually takes may often vary significantly from its stated policy. This difference is sometimes caused by political compromise over policy, while in other situations it is caused by lack of policy implementation and enforcement. Implementing policy may have unexpected results, stemming from a policy whose reach extends further than the problem it was originally crafted to address. Additionally, unpredictable results may arise from selective or idiosyncratic enforcement of policy.

Effects

Intended effects and policy-design

The intended effects of a policy vary widely according to the organization and the context in which they are made. Broadly, policies are typically instituted to avoid some negative effect that has been noticed in the organization, or to seek some positive benefit. A way to extract the stated aims of a public policy is to analyze the goals embedded in the legislation that establishes it. This approach helps clarify the explicit intentions behind a policy and provides a normative foundation for evaluating its effectiveness in practice.
A meta-analysis of policy studies concluded that international treaties that aim to foster global cooperation have mostly failed to produce their intended effects in addressing global challenges, and sometimes may have led to unintended harmful or net negative effects. The study suggests enforcement mechanisms are the "only modifiable treaty design choice" with the potential to improve the effectiveness.
The State of California provides an example of benefit-seeking policy. In recent years, the numbers of hybrid cars in California has increased dramatically, in part because of policy changes in Federal law that provided USD $1,500 in tax credits and enabled the use of high-occupancy vehicle lanes to drivers of hybrid vehicles. In this case, the organization created an effect through policy.

Unintended

Policies frequently have side effects or unintended consequences. Because the environments that policies seek to influence or manipulate are typically complex adaptive systems, making a policy change can have counterintuitive results. For example, a government may make a policy decision to raise taxes, in hopes of increasing overall tax revenue. Depending on the size of the tax increase, this may have the overall effect of reducing tax revenue by causing capital flight or by creating a rate so high that citizens are deterred from earning the money that is taxed.
The policy formulation process theoretically includes an attempt to assess as many areas of potential policy impact as possible, to lessen the chances that a given policy will have unexpected or unintended consequences.

Cycle

In political science, the policy cycle is a tool commonly used for analyzing the development of a policy. It can also be referred to as a "stages model" or "stages heuristic". It is thus a rule of thumb rather than the actual reality of how policy is created, but has been influential in how political scientists looked at policy in general. It was developed as a theory from Harold Lasswell's work. Later scholarship argues that stages models oversimplify policymaking, which is often iterative and shaped by multiple actors and shifting implementation contexts. It is called the policy cycle as the final stage often leads back to the first stage, thus restarting the cycle.
Harold Lasswell's popular model of the policy cycle divided the process into seven distinct stages, asking questions of both how and why public policies should be made. With the stages ranging from intelligence, promotion, prescription, invocation, application, termination and appraisal, this process inherently attempts to combine policy implementation to formulated policy goals.
One version by James E. Anderson, in his Public Policy-Making has the following stages:
  1. Agenda setting – The recognition of certain subject as a problem demanding further government attention.
  2. Policy formulation – Involves exploring a variation of options or alternative courses of action available for addressing the problem.
  3. Decision-making – Government decides on an ultimate course of action, whether to perpetuate the policy status quo or alter it.
  4. Implementation – The ultimate decision made earlier will be put into practice.
  5. Evaluation – Assesses the effectiveness of a public policy in terms of its perceived intentions and results. Policy actors attempt to determine whether the course of action is a success or failure by examining its impact and outcomes.
Anderson's version of the stages model is the most common and widely recognized out of the models. However, it could also be seen as flawed. According to Paul A. Sabatier, the model has "outlived its usefulness" and should be replaced. The model's issues have led to a paradoxical situation in which current research and updated versions of the model continue to rely on the framework created by Anderson. But the very concept of the stages model has been discredited, which attacks the cycle's status as a heuristic.
Due to these problems, alternative and newer versions of the model have aimed to create a more comprehensive view of the policy cycle. An eight step policy cycle is developed in detail in The Australian Policy Handbook by Peter Bridgman and Glyn Davis:
  1. Issue identification
  2. Policy analysis
  3. Consultation
  4. Policy instrument development
  5. Building coordination and coalitions
  6. Program Design: Decision making
  7. Policy Implementation
  8. Policy Evaluation
The Althaus, Bridgman & Davis model is heuristic and iterative. It is intentionally normative, and not intended as a diagnostic or predictive model. Policy cycles are typically characterized as adopting a classical approach, and tend to describe processes from the perspective of policy decision makers. Accordingly, some post-positivist academics challenge cyclical models as unresponsive and unrealistic, preferring systemic and more complex models. They consider a broader range of actors involved in the policy space that includes civil society organizations, the media, intellectuals, think tanks or policy research institutes, corporations, lobbyists, etc.

Content

Policies are typically promulgated through official written documents. Policy documents often come with the endorsement or signature of the executive powers within an organization to legitimize the policy and demonstrate that it is considered in force. Such documents often have standard formats that are particular to the organization issuing the policy. While such formats differ in form, policy documents usually contain certain standard components including:
  • A purpose statement, outlining why the organization is issuing the policy, and what its desired effect or outcome of the policy should be.
  • An applicability and scope statement, describing who the policy affects and which actions are impacted by the policy. The applicability and scope may expressly exclude certain people, organizations, or actions from the policy requirements. Applicability and scope is used to focus the policy on only the desired targets, and avoid unintended consequences where possible.
  • An effective date which indicates when the policy comes into force. Retroactive policies are rare, but can be found.
  • A responsibilities section, indicating which parties and organizations are responsible for carrying out individual policy statements. Many policies may require the establishment of some ongoing function or action. For example, a purchasing policy might specify that a purchasing office be created to process purchase requests, and that this office would be responsible for ongoing actions. Responsibilities often include identification of any relevant oversight and/or governance structures.
  • Policy statements indicating the specific regulations, requirements, or modifications to organizational behavior that the policy is creating. Policy statements are extremely diverse depending on the organization and intent, and may take almost any form.
Some policies may contain additional sections, including:
  • Background, indicating any reasons, history, ethical background statements, and/or intent that led to the creation of the policy, which may be listed as motivating factors. This information is often quite valuable when policies must be evaluated or used in ambiguous situations, just as the intent of a law can be useful to a court when deciding a case that involves that law.
  • Definitions, providing clear and unambiguous definitions for terms and concepts found in the policy document.