Methodological Guide On Impact of Public Policies

Government of the Republic of Moldova
METHODOLOGICAL GUIDE
on
ex-ante assessment
of the impact of Public Policies

Machinery of Government, 2009

2
Content
INTRODUCTION.............................................................................................................................................3
BASIC NOTIONS AND DEFINITIONS ...................................... ERROR! BOOKMARK NOT DEFINED.
DECISION-MAKING PROCESS....................................................................................................................5
CHAPTER I. EX-ANTE ASSESSMENT OF THE IMPACT OF PUBLIC POLICIES....................8
1. STAGES OF PUBLIC POLICIES EX-ANTE EVALUATION 8
2. TYPES OF EX-ANTE IMPACT ASSESSMENT 9
3. PUBLIC POLICY PROPOSAL ERROR! BOOKMARK NOT DEFINED.
4. PROCESS COORDINATION WITHIN THE GOVERNMENT 11
CHAPTER II. EX-ANTE ASSESSMENT FACILITIES...... ERROR! BOOKMARK NOT DEFINED.
1. PRELIMINARY STAGE. IMPACT ASSESSMENT PLANNING 14
1.1. Stage description ............................................................................. Error! Bookmark not defined.
1.2. Notification of public policy elaboration.......................................................................................16
1.3. Data collection ................................................................................ Error! Bookmark not defined.
2. STAGE I. PROBLEM DEFINITION 19
3. STAGE II. OBJECTIVES SETUP 22
4. STAGE III. IDENTIFICATION OF OPTIONS 26
5. STAGE IV. OPTIONS ANALYSIS 30
5.2. Distribution of Costs and Benefits to society.................................................................................32
5.3. Fiscal impact analysis ..................................................................... Error! Bookmark not defined.
5.4. Administrative impact analysis......................................................................................................37
5.5. Economic impact analysis .............................................................................................................39
5.6. Social and poverty impact analysis ...............................................................................................41
5.7. Strategic environment analysis......................................................................................................43
5.8. Risk analysis ..................................................................................................................................46
6. STAGE V. COMPARISON OF OPTIONS, AND FORMULATION OF A RECOMMENDATION 48
6.2. Formulation of public policy proposal ..........................................................................................52
CHAPTER III. CONSULTATION PROCESS .......................................................................................54
1. CONSULTATION FACILITIES FOR EX-ANTE IMPACT ASSESSMENT 54
2. CONSULTATION OF EXPERTS 55
3. CONSULTATION OF INTERESTED PARTIES AND PUBLIC PARTICIPATION 56
4. PROCEDURE NOTES AND COMMENTS 56
5. DELIBERATIVE FACILITIES 58
6. ANALYSIS OF INTERESTED PARTIES OPINION 58
APPENDIXES.................................................................................. ERROR! BOOKMARK NOT DEFINED.
Appendix I. ...................................................................................... An example of Public policy proposal
Error! Bookmark not defined.
Appendix II. . Problem tree: The quality of public policy documens and of regulatory acts elaborated by
CPA is not adequate ..................................................................................................................................67
Appendix III.............Objective tree: Elaboration of public policy documents and of regulatory acts is of
adequate quality .......................................................................................... Error! Bookmark not defined.
Appendix IV. ............................................................................................ Definition of public policy facilities
71
Appendix V. Evaluation and eligibility criteria for public policy
proposal...................................................77

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BIBLIOGRAPHY............................................................................................................................................80
Introduction

The edification of a modern prosperous state, where the Government actions would have a
beneficial impact on the society, implies a coherent functioning of decision-making process within
central public administration (CPA). The improvement of this process efficiency within the
Government implies both the creation of a sustanable system of Government administration and the
introduction of an efficient system of public policies elaboration.

The evolution processes in the economic and social fields which have place in a country require the
intervention of central public authorities for correction of certain transformations, which produce or
will produce in the future an undesirable impact on the society. These interventions are actually
materialized by means of actions fixed in public policy documents and other regulatory acts. At
present, the coppendixion between these documents and methods of their elaboration,
implementation and evaluation, as well as the division of functions among participants involved into
the decision-making process, are not clear and transparent. Over the last years, the public authorities
have made sporadic efforts to improve the quality of public policies elaborated. These efforts made
possible the familiarization with stages and facilities of public policy elaboration, but are still not
sufficient for consolidation of durable and directioned skills of public officials, which are required
for public policy analysis. The lack of a common methodological frame to be followed within the
process of public policy elaboration compromises all the efforts of public officials to formulate a
coherent public policy, the implementation of which assures the achievement of objectives
established by the authorities.

The necessity of this methodological guide elaboration derives from the importance of public
policies in the context of decision-making process in general and of strategic planning in particular.
This guide have been elaborated as a methodological guidebook for central public authorities
involved into the process of public policy elaboration, however can also be used by large public. The
guide fixes the basic principles in edification of a durable and efficient system of public policy
elaboration, based on European best practices.

This system is based on public policy analysis prior to its approvement, which is also called ex-ante
evaluation of the impact of public policy. The impact assessment represents the determined tool of
public policy elaboration process, by means of which the problems, objectives and options related to
the policy can be identified and evaluated, by providing of decision-making agents with valuable
empiric data for correct documentation and decision. This guidebooks destination is to supplement
the Methodological guidebook on decision-making process which describes both the stages of
planning within the Government and the stages of public policy cycle, starting with public policy
elaboration the stage permeated by ex-ante evaluation.

The methodilogy guidebook on public policies elaboration introduces into the process of public
policies elaboration two new important changes one procedural, and the other one related to the
content, as follows:
1. Public policy proposal elaboration (PPP) prior to elaboration of regulatory and legal acts,
public policy documents or other specific actions.
2. Establishment of concrete requirements for content ex-ante evaluation, resumed in public
policy proposal.

The introduction of requirement to elaborate the public policy Proposal prior to decision-making,
will allow to make informed decisions, which would prevent or correct both market failures and
Government failures.

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The first project of methodological guidebook has been conceived on the base of the guidebook on
Regulatory Impact Evaluation (RIE) elaborated by the Ministry of Economy and Trade for
regulatory acts analysis, which could have an impact on entrepreneurial activity. In distinction from
guidebook on RIE, the methodological guidebook considers the modality of public policies
elaboration in general, which can take various forms public policy documents, regulatory acts and
even documents which do not obligatorily consider the business sphere. The final version of
guidebook, which was elaborated as a result of consultations realised with public authorities, takes
into account the principles fixed in the gudebook on RIE, in parallel with the extension of set of
tools for realizing the ex-ante evaluation of the impact of public policies. The guidebook determines
the public officials to use their critical thinking in process of impact assessment, by offering with
this view a range of useful questions, the answers to which will lead to a deeper understanding of
Public Policy options.

In addition, the methodological guide does not represent an exhaustive spectrum of facilities and
questions for ex-ante evaluation of public policies impact, but a selection of tools, which are
accessible for and applicable by public officers and analists involved into this process. The selection
of a set of analitical tools, especially those of high quality, derives from a novelty appeared in the
process of ex-ante evaluation of the impact of public policies and, hence, the insufficient capacities
of public authorities to use a facility more sophisticated. The requirements to the analysis, which
accompanies the process of public policies elaboration will increase as the analitical skills of public
authorities will grow.

The Ghuidebook contains three chapters. The first chapter describes the stages and the types of ex-
ante analysis and explains certain requirements related to the process. The second chapter considers
the analitical facilities for every stage of public policies impact assessment. The third chapter
describes bothe the consulting modalities within the evaluation process, and sets up the cathegories
of participants. Also, the Ghuidebook contains five appendixes. The first Appendix offers an
example of public policy Proposal, which contains the ex-ante evaluation synthesis. The second
Appendix illustrates an example of problem identified by means of problem tree method. The
third Appendix contains an example of objective, determined on the base of objective tree method.
The fourth Appendix describes the public policies facilities, which should be considered while
analysing the options of public policies. The fifth Appendix describes the evaluation and eligibility
criteria for public policy Proposal. A separate compartment following the introduction is dedicated
to the basic notions and definitions used in this guidebook.

Basic notions and definitions

Introducing a number of innovative stages and proceeds into the functioning of decision-making
process involves the use of certain new notions and terms. These are the basic notions to be learned
for better familiarisation with decision-making process and with public policies ex-ante evaluation.
In addition, through this guidebook there will persist a number of important notions, which will be
defined in the respective chapter, thus allowing to not separate these notions from the context. Thus,
within the context of this guide, the following notions will be used:

Public policy ex-ante analysis represents the process of identification of problem or objective,
eventual options of problem solving or achievement of objective, and analysis of the effects or
consequences of these options pending decision;

Public policy document represents a tool of reflexion of public policy planification results. In
function of proportions, the public policy documents are divided into three types: national,

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intersectorial and sectorial. As regards the form, the public policy documents can be of five types:
public policy conception, strategy, program, plan and proposal;

Public policy facilities represent a mechanism used for public policy implementation. There are four
types of public policy tools informative, financial, administrative and regulatory.

Public policy regards the actions or lack of actions planified by the Government, which influence or
change in some way the society or the economy and contribute to the realization of Government
agenda.

Decision-making process represents the deliberative process implemented by public authorities,
which leads to the identification of certain political decisions from a series of options available. The
decision-making process is relevant to the whole cycle of public policy: from impact elaboration to
its evaluation.

Public policy proposal represents a public policy document containing the results of ex-ante
evaluation of the impact of public policy.

Decision-making process

Before understanding the facilities of ex-ante evaluation of the impact of public policy, it is
important to perceive the essention of decision-making process or of public policy cycle. This
process is largely described in Metodological Ghudebook on decision-making process. The
Decision-making process is composed of five basic stages (Diagram 1):

1. Elaboration
2. Approvement
3. Implementation
4. Monitoring
5. Evaluation

The systematic implication of public authorities is important for all five interdependent stages of
decision-making process, though the Public Policy ex-ante evaluation has place at the first stage
only Public Policy elaboration. The Public Policy elaboration cycle is not terminated once the
decision is made, but continues through Policy implementation. The consecutive traversion of all
stages of decision-making process allows to evaluate the Public Policy and to get involved, if
necessary, into the process of implementation for eventual correction of this, in order to avoid any
eventual failure or harmful effect. The consultation is specific for every stage of decision-making
process (excepting the stage of approval) and should start as soon as possible at the stage of Public
Policy elaboration. Thus, for bothe Public Policy documents and regulatory acts, the CPA authorities
should consider the following requirements set up for basic stages of decision-making process:

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a) Public Policy elaboration

The Public Policy elaboration reprezents the formulation by public authorities of effective and
acceptable principles and objectives for implementing of priorities established in Government
agenda. The Public Policy elaboration accompanied by ex-ante impact assessment reprezents an
analitical process involving five interdependent stages: problem identification, objective
establishment, options set up for problem solving and objective achievement, options analysis,
options comparison and formulation of recommended option.

b) Public Policy approval

The Public Policy approval represents the obtaining of formal consent of public authorities for the
necessary implementation of actions foreseen by Public Policy identified. The approval of Public
Policy documents and of regulatory acts should be made if the respective documents comply with
all requirements exposed for elaboration stage only.

c) Public Policy implementation

The Public Policy implementation represents the process, where the selected option of Public Policy
is implemented toghether with the approval of this option by a regulatory act. The implementation of
Public Policy should be made on the base of actions fixed by an action plan, in which should be
indicated the responsible persons for execution.

d) Public Policy monitoring

The Public Policy monitoring represents the process, when the authorities of central public
administration collect qualitative and quantitative data denoting the degree of realization of the
actions established, in the aspect of Public Policy proposals. The monitoring should persist through
the whole implementation process of Public Policy. The monitoring is realized by the institution,
which has iniciated the Public Policy, including with informational support of other public
Public Policy
elaboration

(ex-ante
analysis)
Public Policy
approval

(by a respective
official document)
Public Policy
implementation
(on the base of an
action plan or an
official document)
Public Policy
monitoring
(intermediate
analysis of
implementation)
Public Policy
evaluation

(ex post analysis )

Consultation
Diagram 1. Stages of decision-making process

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authorities and organizations outside the Government. The monitoring is an intermediary evaluation,
in medias res, which establishes the modality of actions execution.

e) Public Policy evaluation

The Public Policy evaluation represents the process of analysing data collected while monitoring,
accompanied with recommendations useful for the following cycle of Public Policy. The evaluation
is a stage which, as the matter of principle, succeeds the monitoring process, although these stages
are often regarded as to be a complete unit. A monitoring process without an evaluation process has
no sense. Though, the evaluation indicates whether the objective of the public policy has been
achieved, as opposed to the monitoring, which is based on the processes and actions rather then on
the results and impact. The results of the evaluation or of ex post analyse are correlated with the
results of ex-ante evaluation to determine the precision degree of the inicial prognosis and to
understand the factors determining the success/failure of Public Policies implemented. In the event
that after public policy implementation the anticipated objective has not been achieved, it might be
possible that the problem consists not only in the error commited at elaboration of ex-ante analysis,
but also in the problems afferent to the process of implementation.

In order to edify a coherent system of Public Policies elaboration, it is necessary to sfecify the types
of Public Policies, the coppendixtions existent between the documents of Public Policies, both
horizontally and vertically, and the relation of these with regulatory acts. It is essential to make
transition from system to planning, when the Public Policy and the regulatory acts moves from
sporadic initiatives to a strategic system, where the regulatory acts will explicitly derive from policy
documents. In decision-making process, the public authorities should be sensible of the fact, that the
ex-ante evaluation of the impact of Public Policy involves an analysis of Public Policy to be
included in the policy, before the analysis of existent facilities for this policy implementation, which
are often regulatory acts and legal documents. The proposed system, where the regulatory acts will
represent a mechanism of Public Policy documents realization only, will be assigned to change the
paradigm of decision-making process and of strategic planning. This system is largely described in
Methodological Guidebook on decision-making process.

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CHAPTER I. PUBLIC POLICY EX-ANTE EVALUATION
1. Stages of public policy ex-ante evaluation

The first stage of decision-making process, and especially the Public Policy elaboration, is
accompanied with Public Policy multidimensional analysis ex-ante evaluation of the impact of
Public Policy. This type of evaluation is used in elaboration of coherent public policies, the
implementation of which will allow to achieve the objectives established by the initiating authorities
or at the national level. This process supposes the data collection and the analysis of other
alternative modalities of problem solution or objective achievement, and of the effects or
consequences of this Public Policy options. This type of evaluation will include in it the evaluation
of budgetary, administrative, economical, social and environmental implications of various
modalities of this problem solution. The process of ex-ante evaluation of the impact of Public
Policies is composed of five interconnected stages: 1. Problem identification. 2. Establishment of an
objective. 3. Identification of options for problem solution and objective achievement. 4. Options
analysis. 5. Options comparison and selection (see Diagram 2.). These are the steps in the ex-ante
evaluation of the impact, which are also purposes to be realized.
1

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The elements of ex-ante evaluation of the impact correspond to OCDE and EU recommendations - Mandelkern Group
Report on a better reglementation for European Commission, 2001, available at
Problem
determination
Establishment
of an objective
Identification of
options for problem
solution and/or
objective achievement
Options
analysis
Fiscal impact Economic
impact
Poverty and
Social Impact
Impact on the
environment
Riscs and
incertitudes
Options comparison
and selection
Administrati
ve impact
Diagram 2. Stages of Public Policy ex-ante evaluation

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All stages of ex-ante evaluation have equal importance, and omitting one stage or changing their
order could result in elaboration of a Public Policy lacking premises for implementation or which
will not contribute to the realization of the intended impact. Therewith, the stage needing maximum
efforts to be applied by public officials, is the 4
th
stage Options analysis, which implies the
evaluation of five types of impact, as well as of risk and incertitude related to the analysed options.
These stages will be described further in the guide, while covering the material, in order to facilitate
the understanding of the essense of these stages by public officials involved in the process of Public
Policy impact assessment.

2. Types of ex-ante evaluation of the impact

The amplitude of Public Policy evaluation depends on the complexity of the problem, on the
estimated impact of this, and on the time, ressources and competencies available for the authorities
having iniciated the Public Policy. If the cost of analysis exceeds the amplitude of the impact
generated by Public Policy, it is not recommended to realize a complex evaluation of such policy.
Despite of the fact that the theory on Public Policy recommends the application of a number of
quantitative approaches such as analysis cost-benefit, analysis cost-efficiency, risks analysis, etc., in
practice the use of such approaches in their classical limits is very difficult, and sometimes is not
necassary. It is preferably that public authorities use the quantitative approaches, because the
fugures offer a good foundation to the recommendations made by public authorities, although to be
going on with, it is recommended to realise combined approaches, where the qualitative analysis
and the participative analysis are used in combination with statistic data and simple evaluation of
costs and benefits of Public Policy promoted.

There are different modalities of determining the complexity degree of the impact assessment. This
guide uses the terms of general and extended evaluation of the impact. These terms describe the
degree of evaluation specificity and are not mutually exclusive. A general analysis is required for
evaluation of all planned Public Policy proposals, whereas an extended analysis should be realized
for a limited number of Public Policies, which after general evaluation appear to be more complex,
imply considerable expenses or may generate disputable impacts. The content of general evaluation
and of extended evaluation of the impact do not differ considerably, by reason of the same
consecutive stages to be followed, which are described in this guidebook. The essential difference
consists in analitical aproaches used, as well as in depth and amplitude of eventual options analysis.
The extended analysis is often realized with support of a company specializing in the field. The
Public Policies involving necessity of an extensive evaluation of the impact are generally referred to
the following categories:

1. Ample and expensive Public Policy. There could be mentioned as an instance the
Supportive Public Policy for certain social categories such as poor, unemployed and disabled
people, etc., which implies major bugetary costs.
2. Government intervention into the business sphere. We refer to this category the fiscal
Public Policy oriented on tax quota reduction or increase, the Subvention Policy, etc.
3. Durable projects and investments. Rehabilitation and construction of roads, creation of
stations for renewable energy production, etc. are projects specific to this category.
4. State property privatization. The decision to expose certain property to privatization
should be thoroughly analysed, in view of such decision irrevocability. It particularly
concerns the privatization of companies which are natural monopolies or bring profits.

http://ec.europa.eu/governance/impact/docs/mandelkern.pdf. See also the Guidelines concerning the Impact assessment
European Commision (2005).

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On the assumption that the evaluation of the impact respresents an exercise requiring time and
resources, it is important to insure the proportionality in the work
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, so that the evaluation does not
become burdensome. In Chapter II. Section 1.Planification of impact assessment, there are proposed
a number of tests, which would help to decide which type of evaluation is needed for every concrete
problem. If the problem is not complex, the realization of evaluation of the impact which requires
special knowledges and great efforts can be contraproductive. In this case the evaluation of the
impact becomes a check mark exercise or an administrative burden for public service, it does not
represent any real or informative value for decision-making factors and does not improve anyway
the quality of public policy analysis.

The major part of issues daily considered by public officials do not need any extended evaluation of
the impact. The stages which should pass to the general evaluation of the imact are sufficient to
decide on the opportunity of approval or implementation of any option of Public Policy. Thus,
within general evaluation of the impact there will persist both aspects implying heavy workload and
aspects needing less efforts to be applied.

This guidebook describes the facilities applicable in general evaluation of the impact of Public
Policy. The spectrum of these tools will be extended in accordance with the development of skills of
public authorities in application of elementary facilities in Public Policy evaluation.
3. Public Policy proposal
The results of ex-ante evaluation of Public Policy will be transposed into a Public Policy proposal, a
model of which is described in section 6.2 of the Chapter II. The Public Polices materialized in
Public Policy documents, regulatory and legal acts will be often preceedes by a public policy
proposal, which will include in it a synthesised analysis of several options of problem solution
and/or achievement of objective in the aspect of their impact on certain fields and categories of
people. The Public Policy proposal could imply the necessity of elaboration of one of above-
mentioned documents, specifyed in the action plan performed for Public Policy options
implementation. The public policy proposal should be elaborated by the subdivision-author, and
after consultations with central public authorities and interested parties, and ulteriorly with
subdivision of analysis, assessment and monitoring of public policies, should be presented for
examination to the chief of authority and after final approval the proposal will go to the
Government.

After approval in principle of public policy proposal by the Government, there will be initiated the
elaboration of properly public policy, which can take the form of a regulatory act, of a public policy
document or of other separate actions. The drafts of these documents will be elaborated on the base
of a recommended option and have to be approved by the authority, which has iniciated the Public
Policy or by the Government (depending on their importance and complexity). The drafts will be
accompanied by a brief summary (according to the legislation in power), which will contain a
resumed analysis of public policy proposal.

The public policy proposals can have different volumes depending on problem complexity and
analysis of this. A very brief analysis could omit useful details which might contribute to decision-
making, and a very expended analysis could generate confusions and lose readers attention.

The Public Policy proposal should be elaborated for execution of certain actions fixed in Action plan
for implementation of national public policy documents (for example National Development
Strategy). At the same time, the PPP is optional for other public policy documents (conceptions,
strategies, programs), because a major part of these should properly follow the structure and the

2
European Principles of Proportionality and Significance, European Commision (2004).

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logic of public policy proposal. An important part of regulatory and legal acts elaborated by the
Government should be obligatorily supposed to the process of ex-ante evaluation of the impact of
options proposed.

At the same time, in order to avoid the overloading of central public authorities activity by
introducing of obligatory impact evaluation of all public policies elaborated, a range of questions
will not be supposed to the ex-ante assessment. While determining questions to be supposed to ex-
ante analysis, it is important to not omit major questions involving reforms in certain fields and to
not include other questions of minor importance administrative (purchase of equipment, office
change, etc.), questions related to the appointments/designations or other policies, the cost of the
analyse of which is more significant than the anticipatet impact.
4. Process coordination within the Government

An efficient intra- and interministrial communication is indispensable for a successfull decision-
making process. The interaction between all participants within the process should start up as soon
as possible, even at the stage of problem analysis and identification of possible options of this
problem solution. In this context, it is important to edify an institutional framework to clearly
determine the functions and the roles of all parcicipants to the decision-making process (see
Diagram 3.). The interministrial coordination principles and facilities are largely described in the
Methodological guidebook on decision-making process.

Diagram 3. Coordination of Public Policy proposal
Interministerial Committee for Strategic Planning
Presentation of PPP for
approval after the advice of
Machinery of Government
Direction for policies coordination
and external assistance of
Machinery of Government
Methodological and
consultative
assistance
Presentation of PPP for
examination after
consultations with AAPC
Final public policy proposal
Advice

Returning
Advice

Returning
Subdivision of analysis,
monitoring and evaluation Public authority
Chief of authority
Public policy proposal
Initiating subdivision
A
d
v
i
c
e

MET

MF

MJ

MLSPF

MENR

Other AAPC

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At the level of initiating public authority, both vertical and horizontal communication is crucial. The
public policy proposal is elaborated by the subdivision which has initiated the public policy within
central public authority. This is often a department responsible for a specific field rather then an unit
of public policy analysis, monitoring and evaluation, whose destination is to assist the subdivision
initiating the policy in understanding and application of impact assessment principles. The
subdivision of public policies analysis, monitoring and evaluation assures the communication
between the subdivision/working group which has initiated the proposal with and other units of this
authority, with respective units of other public authorities, as well as with Machinery of
Government. The subdivisions for public policies analysis, monitoring and evaluation will assure the
elaboration of proposals according to a common format and the complience with the requirements
vis-a-vis these documents. These units will have as mission to consult the subdivision-author, to
offer assistance within the process of impact assessment and will rave the right to disapprove
incoherent public policy proposals, regulatory acts and public policy documents. The evaluation and
eligibility criteria of public policy porposals, which will be used by the subdivisions of public
policies analysis, monitoring and evaluation for PPP quality control are provided in the Appendix
Anexa V. To assure the complience with these principles, it is important to exclude the implication
of subdivisions responsible for public policies analysis, monitoring and evaluation in any
nonspecific activities, otherwise these hsould not take part in the cycle of public policies elaboration.

Within the process of ex-ante assessment, a number of public authorities will have a special role,
with obligatory expression on certain aspects of impact analysis. The Ministry of Finances will
support the public authorities in the fiscal impact assessment and will present an advice concerning
the performed analysis. The Ministry of Ecology and Natural Ressources will support the public
authorities in strategic environmental assessment and will present an advice concerning the
performed analysis. The Center of Legislation harmonization of the Ministry of Justice will analyse
the public policy proposal in the aspect of conformity with european standards and complience with
signed agreements. At the same time, the Ministry of Justice will examine the public polici proposal
in the aspect of conformity with active legislation. The Ministry of Economy and Trade and the
Ministry of Social Protection, Family and Children will offer assistance to public authorities in the
process of economic impact assessment and respectively of social impact assessment, and wil
present an advice concerning the performed analysis. The Center of Fighting against Economic
Crimes and Corruption will analyse the anticorruptional aspects of PPP. The initiating authority will
assure that the assessment results at different stages of process be consulted with other public
authorities, which will be affected or involved into the process of public policy implementation.

At central level, the process of strategic planning will be coordinated by Machinery of Government.
The initiating authorities will present the proposal to the Government for advice. The proposal will
be returned by the Machinery of Government to public authorities if its content is irrelevant or,
otherwise, remited to relevant directions of Machinery of Government for verification of conformity
with regulations concerning the elaboration and coordination processes. The evaluation and
eligibility criteria of public policy proposal, which will be applyed by Machinery of Government for
PPP quality control are presented in the Appendix V. The Machinery of Government, by means of
relevant subdivisions, will operate as a filtre processing the proposals recieved from public
authorities and will make decisions concerning the admission or rejection of these for ulterior
improvement, analysing the proposals relevance and being final destination of their remittal. More
specifically, the Machinery of Government should examine all documents recieved to assure:

The analysis of all opinions exposed in the process of consultations
The conformity of proposals recieved from public authorities with Government strategic
priorities
The compatibility of analyses and analytical materials (fiscal, economic, social,
environmental, administrative impact) with the standards fixed in the guide

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The examination and consideration of sectoral and intersectoral problems
The solution or minimization of divergences between the authorities.

Within the process of examination of public policies proposals, other public policy documents and
regulatory acts, the Machinery of Government will not have the goal to rewrite these documents or
modify the recommendations of the authority-author. To the extent that the Government officials
have opinions different from those exposed in the public policy proposal and in other documents
remitted, there will be initiated a dialogue with public authorities involved in elaboration of
respective public policy. In the event that the participants to the process of impact evaluation will
fail to come to an arrangement concerning the public policy elaboration, the Machinery of
Government should intervene to settle the case, if however the outstanding problem is too
complicated and implies significant costs, the Governmet Community should present a demarche to
the Interministerial Committee for Strategic Planning, which will determine conclusively.

Finally, after examination of public policy proposal by Machinery of Government, the proposal is
remitted for examination and approval to Interministerial Committee for Strategic Planning, which
approves the PPP, giving the go-ahead for one of the options proposed by the initiating authority,
and it can be not necessarily the option recommended by public authority. In this case, the
authorities weel proceed to transpose the options approved to the obligatory implementing facilities.
To the extent that noone of proposed option is considered to be adequate, the public policy proposal
is returned to the authority for finalization or rejected (if it interferes with a recent public policy).
These cases should not however take place, because at every stage the PPP will be extensively
consulted both within the Government and with interested parties and affected from outside, and
thus the risk of inadequacy of proposed options will be minimized. The documents which will
succede the PPP (regulatory acts, legal documents, public policy documents) will be approved
according to the procedures described in legislation.

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CHAPTER I. EX-ANTE EVALUATION FACILITIES

1. Preliminary stage. Planificarea evalurii impactului

1.1. Stage description

The ex-ante analysis of the impact of Public Policy, the stages of which are described in this
guidebook, imply a systematic consideration of a number of analitical questions and formulation of
coherent answers to these. A good familiarizaiton with situation characterizing the outstanding
question would allow to maximise the positive impact of public policy and to prevent the eventual
risks.

The best time to determine the questions which are subject to ex-ante evaluation, as well as this
evaluation amplitude is the period of yarly activity planning which is carried out in all public
authorities. To determine questions is not the same thing as to define a problem. The last activity
constitute the first stage of public policy impact ex-ante analysis. The question can be considered a
rough problem signalizing the imperfection of a system or process, the dissatisfaction of certain
categories of people, etc. The question will be formulated as problem in conformity with all
obligatory rules, at the first stage of ex-ante analysis only.

The planning of activities to be realized in the coming year is exactly the time for questions analysis.
In the course of the year, the central public authorities are involved into the process of strategic
planning, which should normally proceed as it follows: The authority action plan is initially
elaborated on the base of provisions stipulated in the Institutional Development Plan. The yearly
authority action plan is ulteriorly used as base for NDS action plan, the latest being used to
formulate the Medium Term Budgetary Framework and ulteriorly the state budget. This progression
of strategic planning should be observed to assure the financial asset of coherent public policies. The
public policies which are subject to ex-ante evaluation should be determined and refined by public
authorities within these stages and coordinated with Machinery of Government (by notification
system) to determine conclusively whether the analysis is necessary and which would be the type of
this analysis.

At the stage of analysis planning should be used two tests. Table 1 and Table 2 provide a test for
problem impact evaluation and the second one for problem priority evaluation. At this stage it is not
necessary to exactly formulate the problem (as it is required at the first stage of impact assessment),
but to be familiarized in general terms with the question requiring a more serious consideration and
an obligatory analysis.

0. Evaluation planning
1. Problem definiiton
2. Objectives setup
3. Identification of Options
4. Options analysis
5. Comparison of options and
selection of recommended option

15

Table 2: Test for priority degree evaluation
Question or issue characteristics
High priority High Government engagement; in case of non-
performance significant political, fiscal or juridic
repercussions
Medium
priority
Government engagement with medium fiscal or juridic
repercussions
Reduced
priority
Public authority priority; administrative of tehnical; in
case of non-performance minimal consequences

After both tests performed, the obtained results should be put toghether (included) in a table. The 3
d

table represents a summary of interaction between impact and high-priority measures and specifies
the cases when a general impact evaluation is required and when an extended evaluation is
recommended. This table represents the single method of public policy impact evaluaiton. The final
decision for type of analysis to be performed should be made by the authority author as consequence
of discussions with memebers of the working group created for public policy elaboration. The
combined table will take the following form:

Table 3: Analysis of the impact and of priority degree of question or of isue
Major impact Medium impact Reduced impact
High priority Extended impact assessment
General impact assessment

Medium
priority

Reduced
priority
Lack of formal analytical
requirements;
The Ministry of Finances can
require the fiscal impact
evaluation

This approach suggests that the general impact evaluation is the most is the best variant in a major
part of situations. Just the important public policies generating major impact (of type described in
Chapter I. Section 2.) will be subject to an extensive impact evaluation. The analytical approach and
general method of impact assessment are the same for all public policy, excepting administrative
and technical problems with reduced priority or impact. The last-mentioned do not need elaboration
of a public policy The Ministry of Finances could require the fiscal impact evaluation only. For
example public policy in the field of youth employment facilitation is of high priority, but in the
same time a medium impact, because the Government will hold negotiations with economic agents
concerning the youth employment by offering them obligatory fiscal stimulants, as contrasted with
pensionary reform (freeze of retirement age, pension valorization, etc.). In case of pensionary
system reform, which is both of high priority and generating major impact, there is necessary an
extensive impact analysis, as opposed to public policy in the field og youth employment a public
policy whicn could be examined in the aspect of general impact assessment.

Table 1: Test for impact level evaluation
Question or issue characteristics
High priority Very complicated, disputable from a policy perspective or very expensive
Medium priority A little complicated, disputable from a policy perspective or expensive
Reduced priority Direct, technical or administrative, minimal cost

16
It is possible that, at first stage, the public officials might aspire to assess the major part of public
policies as to be of reduced priority. Such a situation should be avoided, because the
underevaluation of elaborated public policies will eventually explode the authoritys reputation.

After deciding on the number of public policies to be evaluated and their type (general or extended),
it is important to produce a detailed plan of ulterior activities. It implies a decision to be made on
terms of activity execution, people/institutions involved, schedule of evaluation and applicable
methods. While drafting the plan, take into account the currently available ressources. The plan will
serve as ground for public authorities notification on public policy initiation (section 1.2). The
following are useful questions for impact evaluation planning:

Before proceeding to de facto evaluation of public policy, it should be mentioned that the
elaboration of public policies is often a repeated process. More specifically, the discussions held or
data collected at a certain stage will determine the return to the anterior stages and generate the
analysis modification. For example, it is possible the problem might be better understood at the
stage of policy options setup, thus implying the necessity of problem redefinition and of analysis
adjustment; or within the process of consultations there will be unfolded some new objects which
will allow to improve the options already determined by the working group involved in the process
of analysis.

1.2. Notification of Public Policy elaboration

The quality of ex-ante evaluation is determined by the amplitude of consultations organized by
initiating authority. The consultation basic types and techniques are described in the Chapter III of
this guide. To assure an effective process of consultation, just from the stage of impact evaluation
planning the initiating authority should inform the interested parties about the launching of this
process, to assure the implication of interested parties at the initial stages of evaluation. A simple
method to identify these interests is to establish within public authorities a system of notification by
official letters (and optionnaly by e-mail), which suppose that when the public authority intends to
initiate the work upon an aspect of public policy, it sends a note by the internal network to relevant
public authorities selected at the discretion of first authority, and obligatorily to the Government.
The notification structure is illustrated in an appendix to this Methodological Guide concerning the
decision-making process.

This brief note will include, among others:
name of public policy in question
Boxa 1. Key topics for evaluation planning

1. What is the question at hand?
2. What is the objective?
3. What result is to be obtained? How do you imagine a better situation?
4. What are the restrictions?
5. Who are the interested parties?
6. What are the basic effects or results the principal interested parties are aspiring to?
7. What is the connection with Governments priorities?
8. What is possible or impossible to realize?
9. What are the gaps? How to fill up these gapes?
10. Who should take part at proposal elaboration? What is the sequence of events?
11. What ressources are avilable for impact analysis execution?
12. What are the risks and barriers on the highway to success and how can these be reduced?

17
brief description of pending question, preferably no longer than one page
description of methods and consulting modalities

As an answer to this notification, the Machinery of Government will write a reference by offering
obligatory arguments in favour or disfavour of respective public policy elaboration. In case of
acceptance, this notification can serve a ground for public authorities and other interested parties
which will allow to take part in the impact evaluation of public policy initiated, according to the
shedule established.

The notification system can be made accessible for large public by publishing on the Web page of
the authority (and/or official page of the Government) the list of problems currently considered by
public authority. In this way, the interested parties and the external experts will be familiarized with
the activities of public authority and could be prepared for implication in the process of public
policy consultations.

1.3. Data collection

The data collection is an important requirement for impact evaluation. All five stages of public
policies impact evaluation need support of solid information base, which would make possible the
foundation of all decisions and recommendations made as a result of evaluation. As in the case of
analitical work, the data collection requires time and financial ressources, thus the same principle of
proportionality should be respected in this case too. The public officials or the subdivisions involved
in public policy elaboration are encouraged to use primaty data, i.e. the data produced especially for
the impact evaluation of public policy in question. At the same time, taking into consideration the
financial implication of special studies, the secondary data use is also admitted, i.e. data and
information existent at the moment of evaluation. Irrespective of type of information materials, the
most important continues to be the quality of data analysis, interpretation, critical evaluation and
generalization.

All informations, Data and ideas are generated by documents and people, thus being accessible both
orally and in writing. The documents can include various types of information: Web pages,
Government reports, statistic archives, results of communication between public authorities,
information circulars, newspapers, books, etc. The Internet is a high-value source of information for
public policy analists, because a lot of countries publish on the Web their public policies, laws and
rigorous procedures. For international organizations such as World Bank, IMF, OECD, FAO, OMS
etc. the Web pages are sources of information and detailed technical studies. The persons
individuals of groups to be consulted are a high-value source of information too (see Chapter III.
concerning the consultation). Both types of sources of information are used in the process of impact
evaluation, although the references to studies and reports are sometimes more credible as references
to discussions with individuals or with groups.

All data can be also divided into quantitative and qualitative. The quantitative data generated by
questionaries, polls and statistic releases are concrete and measurable. The number of beneficiaries,
the cost of public policy, the number of kilometers of rehabilitated roads constitute quantitative
data. Without this data the analysis is not successfull at all. Although, these data do not obligatorily
represent the general table of the intervention. The qualitative data generated by studies of case,
pilot studies, focus groups, interviews, reflect the opinions and the attitudes of individuals and of
organizations. An evaluation should have an equilibrated content, where quantitative data are put
together with qualitative data in a compatible manner. An evaluation prevailingly qualitative, rises

18
doubds concerning the credibility of given proofs, while an evaluation prevailingly quantitative risks
to omit certain realities characteristic to the sphere/issue in question.

As in the case of data types, the modalities of their collection are different too. These can be
unformal conversations with collegues, meetings with experts, target groups or other groups
concerned, to the extent of use of Government official statistics and reports, public policy
documents and scientific reports, or reports elaborated by other research institutes and non-
governmental organizations, as well as informations obtained from mass-media, or other sources.

In general terms, the subdivisions involved into the policy impact assessment should consider the
following aspects while formulating any informed evaluation, based on credible data:

1. It is necessary to identify the existent data sources and to use these in the analysis.
2. All data collected in accessible forms should be kept in order to be available for all persons
involved in the impact evaluation and in all ulterior stages, for example, at the stage of
monitoring and of ex post evaluation.
3. In case of lack of information or data incompleteness, the public officials should make
recourse to their proper estimations (primary data), to apply proxy measures or
argumented assumptions, which allow to analyse the respective problem by using the
appropiate information. These data might be substituted when other more precise
information will be available. The public officials often hesitate to make recourse to such
argumented assumptions because they do not want to be accused for lack of exactitude or are
not ready to assume the responsibility for recommendations offered by them. When a public
policy does not implies any significant costs or any considerable impact, the use of proxy
measures or of argumented assumptions in the absence of primary data is extremly
recommended.
4. When the lack of information is very sensitive, the officials are encouraged to organize a
study or a poll concerning the problem in order to clearly define the problem dimensions and
characteristics. For this type of studies it is important to clearly identify the necessity of
additional data and of all possible sources of information or of a sample. These excercises
could be realized with sponsorship support.

19

2. Stage I. Problem definiiton


The first step in public policy impact assessment is to determine and to understand the Government
engagement, the question under consideration or the problem to be solved. A correct problem
definition is a very important thing, because this is the first stage in the process of public policy
impact evaluation and every ulterior stage arises from previous and are together oriented to the
solucion of the problem identified. An erroneous problem definition could have a negative
incomensurable impact.

Even it seems more easily to identify a problen than the actions for this problem solution, this stage
is in reality a difficult one, even for public policy analists with sufficient experience in the field. The
development of a clear understanding of this problem can turn out to be a veritable provocation,
because the problem is often confounded with reasons which determine it or with effects generated
by this problem. Confusing these elements results in chosing of an erroneous course of action and in
setup of incorrect actions the implementation of which can result in aggravation of situation.

At this stage of ex ante analysis, as well as at ulterior stages, the analytical process of reflexion
represents a particular facity which would allow to public authorities to turk the trick. Within the
process of problem analysis it is important to understand the reasons, effects, amplitude, cathegories
concerned and the problem evolution through the time.

This stage assures the setup of the context of public policy or of basic case and allows to make the
appreciation of current public policies and of modality of their implementation. Every problem has
its own history and a special managemen modality used till present (or maybe has never been
considered, in case of a recent or previously unevident problem). To understand the context of a
public policy, the process of impact evaluation should include in it the examination of actual
modality of problem treatment, including the active legislation. This evaluation should appreciate
the interventions already done, as well as other interventions which could have certain effect on the
problem. To understand the problem, for question "why the current situation is unsatisfactory"
should be find out an well argumented explication. Before proceeding to examination of intervention
modality, it is necesarry to correctly understand the reason or the necessity of intervention. Thus, to
better understand the problem, it is useful to address the following questions:
1. Problem definition
2. Objectives setup
4. Options analysis

20

Beside these there are a lot of schematic methods of problem identification which would be useful to
public officials at this stage. The most common qualitative techniques are problem tree, the
diagram fishbone and SWOT analysis. Also, the secondary data analysis constitute a quantitative
technique largely used for problem identification. An example of problem analysis realized with
application of problem tree technique is illustrated in the Appendix II. This method allows to
separate the problem from causes which provoked it and effects generated by this. At the same time,
noone schematic tool does not replace the analytical thinking process. The reflections on the
problem imply a range of questions, answers to which can be indicated by the problem itself, its
magnitude, and to uncover certain possibilities of its solution.

The problem formulation is less important as its identification. A problem formulated ambiguously
could undermine the ulterior actions of the Government. The problem should be briefly formulated
and to not offer a variant of its solution. Box 3. illustrates an example of clear formulation and
another example of ambiguous problem statement. The initially formulated problem can be
reconsidered through the process of impact evaluation together with new information elucidation.
The modality of problem definition will influence the considered options of public policy. The
precision in problem explication usually leads to improved performancies of its solution.

Boxa 2: Key subjects for problem identification

What is the question or the problem?
Is the question under consideration an engagement assumed by the Government vis-a-vis the society or
international bodies, or if it constitute an opportunity to promote the public policy? It is an appearing/continuous
problem? If any angagement is assumed, what problem does it treat?

Symptoms identification
What are the symptoms of the problem?
What is the sphere of covering, magnitude and measure of this question/ problem?
Does this problem affect certain regions of country more than other regions?
What is the tendency? Does this problem progress? Do we know why? Do we have any figures?

Understanding who is affected
Who is affected by this problem? Who is beneficiary and who disadvantaged? Do we have any figures?

Understanding of active public policy and of its context
What is the current public policy? What laws are currently applicable?
Why do the problem exist? Should we differenciate the problem and the symptoms.
What is the history of this problem? What is the history of the proposal? What is the context of the question or of
the proposal? Are there any other questions, more important or connected we should be conscious of?
What is currently doing for problem consideration? What is functioning and what is not functioning? Why?
What is the public policy capacity in this field?
What is the reason of the problem? Is the question about current public policy or modality of its implementation (or
not)?

Understanding of values and of engagements
Why the interventions of Government is required? What is the importance of his problem?

Other useful information
How could our experience be compared to foreign experiences?
What additional data do we need for problem/engagement understanding?

21

Box 3: Clear formulation of the problem

Problem: According to a study realized by the Ministry of Economy and Trade, 18% of employers
breach labour laws and regulations.
Problea: It is known that the employers breach labour laws.

This example denotes, that a problem is better formulated when it makes reference to the source of
information, the field and the target group, and gives a basic figure indicating the target group
dimensions. These data are extremely useful for objectives formulation, which is the second stage of
ex-ante policy evaluation.

A clear formulation of the problem is indispensable to assure a similar perception and understanding
of the problem by all persons involved in the process of impact evaluation. The 4
th
table presents a
schematic method of problem sumarizing which could be useful to public officials involved in the
process of problem formulation.

Table 4: Problem summary
1. Problem: (name)

2. Description: Problem brief description, field, importance, trends

3. History: Brief description of what has be done to this moment

4. Actual public policy: Responsible persons for implementation, active legislation in the field concerned;
reasons of problem

5. Who is affected: Principle categories of interested parties (companies, local authorities, NGO) and
country regions affected; categories of people

6. Why the intervention is important?

22

3. Stage II. Objectives setup


Within the process of impact evaluation it is important to identify the results which a public policy
aspires to achieve. The objectives are the anticipated beneficial effects of public policy, without
which it is very difficult to solve the problem or establish concrete actions. The objectives setup
allows to establish a bridge between the problem identified and the ulterior actions oriented to this
problem solution. The objectives are setup as a reaction to the problem or a dezideratum of the
authority in a certain field of activity.

The art of objectives setup is similar to the art of problems identification. The objectives should be
clear and explicit or in other words to be SMART (Simple, Measurable, Acceptable, Realizable and
fixed in Time). The Government intentions should be transposed into a time framework with
indication of action sphere and intervention measure. An example of objective correctly formulated
and another of ambiguous objective is offered in the 4
th
Box.

Box 4: Correct formulation of the objective

Objective: Reducing polution by chemical wastes with 15% by 2015.
Objective: Significant reduction of chemical polution.

The first objective is a specifical one (chimical polution) being measurable (15 per cent) and fixed in
time (by 2015). The second objective is a general one, thus creating difficulties during the period of
implementation, monitoring and evaluation.

At the same time, the objective should not be confounded with the target of public policy. The target
is the desideratum followed by the authority through public policy realization. The target is not
necessary SMART. The objectives are the specific and measurable targets of a public policy. The
objectives indicate concretely the achievements expected from public policy. The consequence of
stages at this phase of policy impact evaluation is usually the following: target setup identification
of objectives actions formulation identification of monitoring indices.

For example
3
, competitive growth of agricultural products at the EU markets is a target. The
objective for this target achievement is the increase of export volume of agricultural products to the
EU market from 24% of total amount of exporting goods in 2008, up to 40% by 2011. The actions
are even more certain than the objectives are and are setup for shorter periodes of time. To achieve
an established objective, the following actions should be realised: (i) VAT reduction for agricultural

3
The example is an illustrative one and does not pretend to use any real data.
2. Objectives setup
4. Options analysis

23
products from 20% in 2008 down to 10% in the year 2009; (ii) increase of subsidies for agricultural
products from 15% of total amount of agricultural expences, up to 30% in the year 2009; (iii)
creation by 2010 of 5 laboratoaries for control of agricultural production quality.

Within the process of objectives setup it is necessary to take account of the fact that the monitoring
of these objectives implementation will be realised by means of monitoring indicators which will
measure the ressources (input), the results of public policy activities (output), the results of public
policy (outcome) and the impact.

Indicators of ressources are sources which make part from a program or service within the
Government. These are people, money and time needed to obtain the products planned. Any public
policy should specify the ressources necessary for its objectives achievements.

Indicators of public policy activities results are measures of an activity. These can be number of
manuals elaborated and distributed, or number of kilometers of rehabilitated roads, or number of
abolished restrictive regulations on enterpreneurship.

Indicators of public policy result measure the direct and immediate results of actions on the target
established people, economic agents, institutions, etc. These are reflexed by changes in behaviour,
competencies, abilities or performance. The examples of this type of effects can be trains or buses
which running on sheduled time, a reduced number of road accidents or increased rate of school
gratuation.

Impact indicators evaluates the effect or the consequence of public policy or of its facilities on a
part of society. As examples of the impact we can cite the increase or reduction of literacy rate, of
competitiveness, of longevity,
of water and air quality, etc.

Although it seems to be
complicated to setup the
targets, the objectives and the
actions, which could be
monitored and evaluated with
help of these indicators, using
simple principles this activity
could become less
embarrassing. In this aspect it
is important to understand the
following relation. The impact
indicators will show if the
targets have been achieved, the indicators measuring the public policy results will illustrate the
objectives realization, and the indicators measuring the results of public policy action and the
ressources will show the realisations degree of planned actions. At the same time, the monitoring of
objectives realization can be also carried out by means of indicators measuring the results of public
policy action. It comes from the fact, that in order to achieve a target, there can be setup several
objectives differing in level of disaggregating. An example illustrating the relations between
objectives and indicators is presented in the Box 5.

The difference between indicators measuring the result of public policy actions and the result of
public policy, consists in the fact that the first show what has been done by the authorities and their
partners to achieve the target, while the second type of inidcators illustrates the degree of
Box 5. Relation between monitoring indicators

Indicator of ressources
Investments for construction of schools

Indicators of public policy activities results
Construction of schools

Indicator of public policy result
Increase of schooling degree

Indicator of the impact
Increase of literacy rate and education of population

24
contribution of perofmed activities to the change of target group attitude. The table 5 illustrates an
example of relation among problem, target, objective, actions and indicators.

Table 5: Examples of objectives and of indicators
Problem: According to a study realized by the Ministty of Home Affairs, about 17% of total ammount of child abuse
cases do not come to trial
Target: Growth in number of child abuse cases came to
trial

Indicator of the impact: Number of child abuse
cases came to trial

Objectives and actions Indicators
Objectives
Assuring by the year 2010 the detection by authorities of
40% cases of suspected child abuse
The adjudication by the year 2010 of 100% of persons
involved in child abuse
Public policy results
Number/percent of target group contacted by relevant
authorities after recognition of the symptoms of child
abuse

Number/percent of child abuse cases that have been
adjudecated
Actions
Training of 500 interrogators by the end of the year 2008

Vesting police officers with greater powers, which would
allow to make perquisition of reported houses

The growth in number of inspections in families suspected
of child abuse from 1500 families in 2008 up to 4000 in
2010
Ressources and results of public policy activities
Number of trainings; Number of participants at these
trainings

Per cent of policemen specialized in child abuse cases

Number of investigations of the families suspected of
child abuse

Because the entire period of public policy elaboration depends on a more precise understanding of
the process of its implementation, it is important to include a multitude of parameters characterisin
this public policy, and namely the actions, the monitoring indicators, the period of implementation
and the institutions responsible in a logical framework which would allow an easy delegation of
roles and an effective public policy monitoring (table 6). This table should be part of public policy
proposal.

Table.6. Logical framework for description of implementation process
Target
Objectives

Actions

Implementing period

Responsible institutions

Monitoring indicators

As at the stage of problem definition, there are several techniques which can be used by public
officials in the process of objectives setup. The most common is the objective tree analysis. After
the identification of problem, of its causes and effects by means of problem tree method, the
results of analysis could serve as base of objectives identification, including the facilities and the
targets of public policy. An example of objective tree analysis is provided in the Appendix III. At
the same time, as well as in the process of problem identification, the most effective method of
objectives setup is the reflection on the modality of intervention. In this context, the questions
contained in the Box 6 will contrubute to the implementation of an analytic process in formulation
of measurable objectives.

25

At this stage, if not realized at previous stage, it is importqnt to identify the public policy
beneficiaries, thus individuals of groups of individuals who will benefit from the respective public
policy. The policy beneficiaries can be entrepreneurs, professors, students, children, poor people,
veterans, disabled persons and other cathegories of people and professions. At the same time, the
policy should not disregard the other persons or groups of persons who could be negatively affected
by the respective public policy taxpayers in case of tax quota growth, households in the
neighbourhood of industrial parks, factories, the activity of which could endamage the environment
and the health of people, etc.

Within the process of objectives identification the following aspects should be taken into
consideration:
It is important to consider several objectives. A single objective can rarely describe
adequately the desired effects of public policy and to fully measure its impact.
It is important to select the objectoves in terms of their relevance for the Republic of
Moldova. Even when the basic imperative determining the proposal is harmonization
with European standards or discharge of internaitional commitments, it is important to
setup a target and objectives which would be relevant for autochthonous political
environment.
It is also important to analyse the final and intermediary objectives for a short,
medium and long period.

The summary analysis of the objectives should be realized on the model provided in the Table 7.

Table 7: Objectives summary
Target: Brief description of the target and of relation with Govermnent priorities

Objectives:
First objective
Second objective
The third objective

Actions:

Performance measures, result and impact: How to realize the monitoring of implementation? How to know if
the aspired result is being obtained? How to appreciate the impact?

Box 6: Key subjects for objectives formulation
1. What is the target of proposed intervention? What effects are planned to be obtained?
Is the objective a relevant one in the context of national public policy document?
Which is the relation between the objective and the Government priorities?
2. What are the objectives to be achieved?
Are the target and the objectives clearly separated?
Which measures will determine the public policy results? How to know if the results are being
obtained or not?
Which measures will identify the actions results? How to know if the behaviour has been
modified or not?
Which measures will identify the public policy impact? How to measure the degree of final
target realization?

26

4. Etapa III. Identification of options

This is one of the most important stages of impact evaluation. Within this stage we identify the
eventual solutions or options and describe eventual facilities of their implementation. The option
constitutes a modality of problem solution or achievement of the established objective.

For a problem solution there are at least two opportunities: state intervention and status quo, the last
implies the noninterference in the existent situation. The intervention, in its turn, can have a different
character and thus can be: major creation of new system, abrogation of existent Legislation and
elaboration of a new Legislation, moderate formation of new components within the existent
system, significant modification of existent Legislation, and minor current situation improvement
by development of certain elements within the existent system, unsignificant modification of
Legislation.
The setup of options for problem solution allows to assure the foundation of final decision
concerning the policy on the analysis of all exestent facilities.

The tools selection is an important process too. The modality of Governmet intervention is of the
same importance as the answer to the question if the Government should intervene. The Government
authorities traditionally consider the legislation as basic solution in the context of public policy. It is
customary for Central and Eastern European Countries where, traditionally the legislation was
accentuated as basic tool of public policy. Thus, the legislation is neither a single nor necessarily the
best way for problems solution. The elaboration of this tool can take a lot of time and ressources,
and its implementation more financial ressources. The regulatory acts and the legal documents
require most commonly a number of mechanisms of application and sanctions to assure the
complience with these regulations. The excess of laws can in return be counterproductive: the
citizens will not manage to know all their obligations, and if the charge of regulations will become
too significant, the people will voluntarily cease to comply with these. The alternative approaches
for example use of market mechanisms or public information could be sometimes more effective
in accomplishment of objectives setup at precedent stage.

In this context it is important to consider several solutions or options, as a part of impact evaluation
and to consider the alternatives of traditional modalities of reglementation. The Governmetn can
select among a variety of juridical, economic, informational and organizational tools, from
restrictive to motivational and from tools which require a high degree of implication to those
requiring a reduced degree of state implication. There are four types of public policy tools which
should be taken into account by the authorities (Appendix IV. provides more detailed information
concerning the available public policy tools):
2. Objectives setup
4. Options analysis

27

1. Information tools (information campaigns, educational campaigns).
2. Financial tools (grants, subventions, guarantees, taxes, budgetary allocations).
3. Administrative tools (direct performing by the state, external contraction, implication of family
and community, voluntaty bodies).
4. Regulatory tools (traditional prescriptive legislation, EU regular directives, mechanisms of
autoregulation, reglementation on the base of performance).

Even if the major part of decisions made by decision-making bodies require the issue of a legal act,
not all these acts contain a reglementation. In this context the administrative tools should not be
confused with, for example, regulatory tools. The administrative tools, although are materialized
similarly to those of regulation by a legal act, do not contain any rules or regulations which are
contained in regulatory tools. Thus, the Government decision to authorise a non-governmental
organization to manage a project (administrative tool) is not the same thing as the Government
decision to modify the regulations in the field of concurrency protection (regulatory tool) even
though both are approved by legal acts.

An option can imply not only a public policy facility but also other tools such as education and
information at the first stage and reglementation at the ulterior stage. The combination of several
public policy facilities could be more efficient than a single regulatory solution. The 4
th
Diagram
illustrates an example of an objective having three distinctive options everyone including one, two
or more tools of implementation.

Thus, to accomplish the objective of decreasing youth tobacco use, there could be launched a
publicity campaign by means of which the population and especially the youth will be informed on
smoking damage. At the same time, there could be considered the option of taxes growth for
smocables and adopted a legislation introducing smoking ban in public places. There could also be
proposed another option regarding the cancellation of subsidies for tobacco cultivation and approval
of a legislation banning smokable sales to young people. Thus, to get better results, there can be use
both a separate public policy tool or a combination of several tools the application of which can be
done both in a staged manner or realized simultaneously.

While the tools are different by nature, there are also differencies in modality of their application.
All four types of tools can be restrictive, voluntary or mixed, depending on situation (Table 8). The
Diagrama 4. Types of public policy options
Objective: Decreasing Youth Tobacco Use
as regularity from 32,7% in 2006 down to
20% by the year 2010
Option 1. Population
warning on smoking
damages for health

Option 2. Increase of
tobacco taxes

Smoking ban in public
places
Option 3.
Cancellation of
subsidies for tobacco
cultivation

Approval of a
legislation banning
smokables sales

28
public authorities can consider different options implying both high or low degree of Government
implication (from those restrictive to those voluntary, topdown by table).

The options should flow from problem and established objectives and to not aspire to cover other
question as those fixed at first two stages of analysis. Also, the formulation of options which set
aside the moment of problem solution should be evited. For example, to solve the problem of lack of
teachers in rural areas there are fixed two alternatives, and notably: (i) elaboration of strategy of
teaching staff attraction in rural areas and (ii) creation of a consultative body for coordination of
aspects concerning the teaching staff attraction in rural areas. These solutions do not seem to solve
the problem, because it implies concrete options such as: (i) teachers salary increase; (ii) granting
teachers tax exemptions; (iii) decent housing for teachers in rural areas.

In the field of public policy analysis, at all its stages and especially at the stage of options
identification, there are prescribed a range of useful qualitative methods. The most common
methods are brainstorming, analogy method, benchmarking and experts methods. These techniques
will be considered in detail in Chapter III. The brainstorming can be realized in combination with
other mentioned methods being in substance a debate on the options. The analogy method is useful
because it concerns certain options applied in the past in other sectors or countries. At the same
time, before emulating a borrowed solution, it is important to evaluate the degree of its success or
failure al acesteia in the respective sector or country. For this purpose should be used the
benchmarking method which is also an analogy method. The benchmarking practices are often
available in accessible publications. The expert methods are useful too, because the implication of
external persons could contribute to an increased degree of objectivity in problem treatment and
identification of options for this problem solution.

From a practical perspective, it is necessary to limit the number of options to be analysed to five or
six, but not less than three, among which one opiton must obligatory be status quo or no
intervention of public authorities. The status quo option, even if it is not the preferred policy
option, constitutes an useful reference which could be applied while comparing with other options
identified. The Box 7 provides the key subjects for this stage of ex ante evaluation.
Table 8: Public policy tools
Tools Regulatory Financial Information Administrative
Restrictive
Rules,
interdictions,
dispositions
Control of price,
quantity, production,
business joining and
leaving, taxes and
deductions
Assuring customer
protection by
informing population
on damages caused by
the product
Direct provision of
services
Infrastructure
development and
capacities increase
Mixed
Secondary
legislation
(decisions),
Methodological
directional lines,
internal rules
Grants, guarantee
certificates,
subventions, loans,
credits, assuring loyal
competition
Information supply,
mediation campaigns

Participation and
consultation
mechanisms
Indirect provision of
services (contracting
external sources)
Voluntary
Code of ethics
and of conduct

Quality quatations,
competitions
Implication of non-
governmental
organizations,
families and
community

29

The basic options and their characteristics should be described in a summary-table which would
facilitate the discussion and lead to the next stage evaluation of options. The Table 9 provided
below is an example of options generation, with brief presentation of outstanding characteristics of
everyone of these. This should include in it the information concerning the public policy tools to be
applied, the categories affected and implied in implementation process, as well as information
regarding the time and costs of implementation.

Table 9: Summary of options
Basic characteristics
No
intervention
Alternative no.1
Alternative
no.2

Alternative
no.3
The main features of the option
Target population/ sectors/ regions
Public policy facilities, for example:
Information tools
Financial tools
Administrative tools
Regulatory tools
Characteristics of implementation who is
responsible any Governmental institution, private
sector, citizens, etc.

Period of implementation

Boxa 7: Key subjects for options elaboration

1. Is the Government intervention necessary for problem solution?
2. Is the problem generated by existent public policies?
3. If yes, what did not function within the existent intervention; for example, the sphere of legislation application
of public policy implementation?
4. Is the problem a temporary and could it disappear naturally?
5. If an intervention has place, will the problem be transferred to any other part?
6. Whether the skills and ressources for intervention performing are available?
7. Is the staff responsible of implementaion qualified, formed, with suitable skills?
8. Whwther the options of informing and education have been examined?
9. Whwther the autoregulatory or voluntarily-regulatory options have been considered similarly to the legislative
regulatory options?
10. Whether the option includes in it a legislative/regulatory component? Whether the application of this
regulatory component and, if available, the sanctions, have been examined?
11. Whether the opportunities of other fiscal stimulents application have been examined?
12. Whether the options of program implementation and increase of capacities have been examined?
13. Whether the civil society, the private sector or the funders could be implied into the process of
implementation?
14. Whether the administrative aspects of every option have been considered?
15. Whwther the target groups have been identified?
16. Whwther all possible alternatives have been considered? If the option "no intervention" has been examined?

30

5. Stage IV. Options analysis


The next step of impact evaluation process after delineation of options, is the analysis of these
options with purpose to determine the strengths and weaknesses of every option. The purpose of this
exercise is to determine differrencies in costs and benefits of options, the impact on different
categories of population, the implementation feasibility and the risks, for attenuation of which the
rigorous measures will be elaborated.

At this stage it is important to carefully identify the strengths and weaknesses of every option for
example to identificate if any social group is negligently excluded from the category of beneficiaries
and other unintentional consequences. It is important to appreciate how the public policies will
function in practice and to identify the restrictions to be got over in case of public policies
implementation. The options analysis is important for developing of the most precise estimates of
costs to be supported by the Government to determine if public policies will justify the costs of
their implementation and to evaluate if the benefits of these seem to be of long-term.

The consequences in a lot of other fields such as impact on business sphere, economy, poverty,
health, sexes, environment
4
, can be examined as a part of general impact evaluation. This guide
presents an integrated framework for several of these impacts with a nowise exhaustive list of
questions which could be used for performing of impact analysis. The proceeds and methods used in
analyse of public policy effects or consequences vary considerably but are rarely very technic at the
first stage. The impact evaluation facilities as well as the types of analysis in process could be
extended in the course of time, when the skills of public autorities will be consolidated. Thus, at
current stage the options will be analysed in the aspect of their impact evaluation on five
inteconnected spheres, as follows:

1. Fiscal impact evaluation
2. Administrative impact evaluation
3. Assessment of the impact on the economy
4. Evaluation of social impact on poverty level
5. Strategic environment analysis

4
The European Commision makes distinction between the evaluation of environment aspects performed for certain
projects such as dams, auto roads, airports or factories ('Evaluation of environmental impact') and the evaluation of
environment aspects realized for plans, programs and public policies ('Environment strategic evaluation'). The
methodologies elaborated for both types of evaluation can be accessed on the Web page of European Commision,
http://ec.europa.eu/environment/eia/home.htm.

2. Objectives setup
4. Options analysis
selection of recommended
i

31

The impact evaluation is indispensable for all options of public policy, irrespective of their nature.
The evaluation can however vary in terms of data available, specific character of options and skills
of public authorities. All activities imply a cost financed either from budged or with support of
finacers, which should be indicated in fiscal impact evaluation. Althoug, certain options, in terms of
their character, could have not any administrative, social, economic or environmental impact. Where
the option have not any impact on one of mentioned spheres, this thing should be indicated in public
policy Proposal.

At this stage the analysis also represents the comparison of solutions in the aspect of their relevance,
efficiency and term evaluation. The relevance regards in the first place the relation between option
and problem/objective, and the analysis of environment of this oprion ulterior functioning if does
not contravene the active legislation or strategic itinerary established by the Government. The
analysis of the efficiency will show if the investment will lead to a successful execution of actions,
and the efficiency analysis will prove that the established actions lead to accomplishment of
objective or achievement of final results. Public policies can be efficient, thus can produce results at
minimum costs, but not effective, i.e. can not realise the envisaged objectives. In other cases, public
policies can be effetive, i.e. very successful as regards the results achievement, but ineffective, i.e.
the costs of these results will be too high vs. their importance. Thus, it is important to find out an
equilibrum betweem efficiency and effectiveness. The analysis of durability will show if the options
in question could be affected by external factors, which could compromise their successful
realisation as well as the durability of positive or negative impact.

There are several modalities of description of public policy eventual consequences (effects or
impacts). Though, at options examination the emphasis should be put on the most important
elements and on those of significant difference. For options assessment there should be used a wide
range of analytical questions. The Box 8 illustrates general aspects of evaluation which should be
also considered by other analysts. These subjects reflect the general view on evaluation followed by
specific aspects of different evaluations.

Box 8: Key subjects for analysis of every option

1. What will be realized by every intervention proposed? Which will be the consequences (positive and negative)?
How much are these consequences/events possible? The realization of proposal effect is certain, probable or
speculative?
Which is the effects amplitude? What part of population could be affected?
When the impact will be perceptible? In certain situations, the long-term benefits could be worth of short-term
risks and costs.
2. Which is the impact of the option no action or status quo? What will happen if the Government will not
intervene?
3. Who and how will be affected by every option?
Identify interested parties (private companies, citizens, target groups of citizens) which will be directly affected
by the options. How large are these groups?
How will the effects be distributed? Will the proposal affect different groups of people in different ways? Could
the proposal favour a part of population, but disfavour another part.
Which is the apmplitude of impact on these groups? Which are positive and negative effects?
Is it possible that any effects/consequences/results be disproportional for certain groups, for example vulnerable
groups or regions? Will this thing affect the success of proposal implementation? What measures will be taken
to minimize these risks?
4. Which are the indirect consequences (positive and negative) of every option? What is the cost of every option?
Have these resources been agreed? Are these more significant as the authority budget?
5. Which are implications of authority resources use of human rsources?
6. Which donor organizations are nvolved in this proposal implementation? What is their role? Does this public
policy depend on any financial arrangements established by donors?
7. Is the proposal a realizable one? What does it implies? Which are affected institutions? In what manner? Local
authorities /NGOs?

32

At this stage there are a nubmer of qualitative and quantitative methods of oprions analysis, among
which the most important quantitative techniques are cost-benefit analysis and cost-effectiveness
analysis. The cost-benefit analysis consists in ample estimation of costs and benefits for society
5
.
This analysis is very suitable for public policies implying a significant economic component of
which costs and benefits are tangible and can be easily quantized and monetized. For major part of
public policies, the costs and especially benefits can be neither quantized nor monetized as required
by a traditional cost-benefit analysis. In these cases the alternative could be application of cost-
effectiveness analysis which consists in costs monetization only, the benefits being transposed into
quantitative values, as units and percentages. For example, the costs of policy oriented on
unemployment compensation tax increase can be monetized, while the benefits will constitute a
number of unemployed people, an unemployment rate or increasing incomes of unemployed people,
in terms of this public policy destination.

A correct application of these methods require abilities, skills, efforts, time and oftenly considerable
resources, which are frequently lacking within public authorities. Taking into account the difficulty
of these methods application for a great number of public policies under examination by public
authorities, this guide advises to public officials the use of cost-benefit analysis of public policies
not by their menetization, but by qualitative analysis and, as possible, quantitaative of this policy
impact on certain sectors and categories of people. Similarly to other stages of impact evaluation, it
would be probably correct at this stage to determine rigorous questions, a part of which is provided
above. This approach is more suitable for general impact evaluation considered in this guide, the
cost-benefit and cost-effectivness methods being specific for an extended impact analysis.

At this stage, the consultations with interested parties are essential. The interested parties are
generaly very well positionned to can determine direct and indirect consequences of proposed policy
implementation. After the identification of proposal consequences, these should be examined
together with intersested factors to determine the existent opportunities for maximization of benefits
and minimization of eventual risks and costs. The consultations can help in identification of a
number of additional measures which could lead to options improvement.

5.2. Distribution of Costs and Benefits to society

At starting of process analysis it is necessary to take account of the fact that every option implies a
nonhomogenous distribution of costs and benefits to society. Certain persons, groups or regions will
benefit more, others less. The eventual effects of certain proposals can be ambiguous a number
categories of people will support costs, other will benefit of respective public policy
implementation, and still others will not be affected by public policy at all. For example, the growth
of a tax will contribute to the increase of budget income, which in its turn will result in expenses rise
for certain sectors or categories of beneficiaries and a perceptible cost for taxpayers. In terms of
public policy nature, the analysis of costs and benefits should take account of their distribution by
sectors, geographic areas, categories of people, including by sex and age groups.

The public policies imply costs and generate benefits both during implementation period and after
public policy realization. In this context, the public officials imvolved into the process of options
impact evaluation, should think of costs and benefits distribution in time, as well as to attempt to
assess the indirect costs and benefits or the externalities which could be generated by respective
options.

5
To deeply understand this technique, we recommend the book - Cost Benefit Analysis and Regulatory Reform: an
Assessment of the Science and the Art (Kop-Krupnick-Toman 2007).

33

The cost of a public policy is the price of actions execution and achievement of established
objectives. In case of an investment project, the cost is just the entrepreneurial investment which
will ulteriorly bring profits. The costs can be alternatively supported by individuals or households,
by economic agents of Government. Costs can be direct or indirect. The fiscal impact evaluation
implies the assessment of public policy direct costs, while the evaluation of conformity costs within
the economic impact implies the assessment of indirect costs, which are not supported by authorities
or by policy beneficiaries, but by other categories which must comply with the approved public
policy. For example, the tightening of labour security at enterprises will imply costs supported by
employers, and the employees will beneficiate of the impact by avoiding accidents and occupational
injuries.

The benefits of a public policy initiatives are nearly concerned in its objectives. For example, if the
objective of a public policy consists in reduction of air pollution, a successful policy would produce
benefits such as pure air of polution reduction. While options comparison the emphasis should be
put on the degree to which every option will implement the wished benefits. The benefits and
sometimes costs can be both tangible and intangible. The assessment of corruption level, freedom of
expression or justice independence is not an easy goal. It is difficult to estimate the benefits
generated by actions in these spheres. These benefits are intangible, opposite to tangible benefits
such as export level, number of beneficiaries, etc.

Benefits can be intensified for a contingent of population (for example, a certain group of workers
who beneficiate of new public policy concerning the labour security) or for general public (measures
for foodstuffs hygiene improvement or air pollution reduction). Benefits can be divided into
following categories: (1) individuals health and welfare, (2) enterprises (3) economy and (4)
environment. These benefits may include changes or improvement in quality of life, provisions of
services, economic domain, as well as in degree of environment pollution.

Certain options will generate incomes such as users taxes and commissions. Grants from donors
could be an important consideration in a particulat option. The amount of these incomes, if
substantial, should be estimated. These types of income are considered lateral benefits and should
be included as compensations for total costs (see section 5.3). Although, the income increase will
lead to distribution of costs to be paid by natural persons or legal bodies, and this can be a negative
consequence of the option and an obstacle for implementation of effectiveness.

5.3. Fiscal impact evaluation

A critical aspect of evaluation of the impact of public policy alternatives is to assess the impact on
Government budget resources. These should include both impact on budget allocations of a
particular authority and significant implications to the entire Medium Term Budgetary Framework.

Theoretically, as part of public policy planning and of budget cycle, the basic new public policies
planned by public authority for elaboration and approvement throughout the year will be identified,
as already mentioned above, within the process of planning of Medium Term Budgetary Framework
and National Development Strategy, and a part of stipulations will be included into Medium Term
Budgetary Framework of the authority. For all that, if previously the public policy was not carefully
developed, these stipulations will be at the best case an approximate estimation only. Also, it is
possible that public policy has not yet been included in Medium Term Budgetary Framework and
thus the results of impact evaluation will serve as base for the following process of Medium Term
Budgetary Framework. In all circumstances it is particularly important that the Government be
conscient of budget implications generated by all considered options, in order that the approved

34
option be possible within limits of existent allocations or be of high priority and implying significant
benefits to justify the reallocation of funds for implementation.

The initiating authority bears liability for fiscal impact evaluation. At the same time, in order that the
Ministry of Finances could verify and evaluate the analysis, it is important to use standard methods
with consistent definitions and estimations. The Table 10 presented below provides a template
which can be used for every option cost evaluation (excepting indirect and conformity costs),
including impact on budget income. In point of fact, the intention is to determine for a multy-year
period:
1. What is total cost of the option; and
2. How will the option be financed:
from existent allocations foreseen in budget / Medium Term Budgetary Framework
from external sources not included in the approved Medium Term Budgetary
Framework
3. Impact on budget income
4. Net cost of option which does not have financing source

This net cost or unfinanced balance, is just this critical information to be considered when
Government decide whether to approve or to reject an option. The value or benefit of all options
should be compared with Government ability to support additional costs. Moreover, in cases where
the cost is too high, it could be necessary to review the identified options and to adjust one or more
options in such a way that these options become less expensive.
Also, the form requires the analysis of several years to demonstrate the year to year evolution of the
impact on Medium Term Budgetary Framework. In sum, the form provides important information
in cases when, for example, a proposal implies a trifling cost in the first year, but with dramatic
growth in the future. Without multiannual perspective, a proposal could seem attractive at present,
but in several year become too expensive.

The following points describes the modality of this table completion:
1. Functional classification and/or program classification. The first cell in the table should be
used for codes (on the base of budgetary classification) and names of group or of basic
program concerned by this option. If program classification is not available, specify the
functional classification.

2. Impact on public expenditure. The second cell represents an important part of table. Here is
realized the evaluation of proposal cost and identified the existent budget funds.

2a. Total cost of option. This cell should include the total cost of the option, irrespective of
whether the funds are already included in Medium Term Budgetary Framework of financed
from any other part. The total cost hsould be divided in accordance with economic
classification: expenditures for staff, goods and services, payments to individuals, transfers
for production(subventions) and general expenditure. At the same time, in case of particular
options of public policy the cost of which can not be assessed by constitutive elements
approach, there should be applied the comparison method or metnod of unilateral costs. If
the option implies the improvement of existent program, than indicate the program total cost,
including the cost of existent program.

The column Current Budget / Medium Term Budgetary Framework Year 1 should
contain the estimated cost for current budget year, if exists. It should be mentioned that the
cost for current year will cover the period after policy implementation start only. There could
appear certain additional costs both single or starting such as equipment procurement and
staff training. The columns Medium Term Budgetary Framework Year 2 and Medium

35
Term Budgetary Framework Year 3 should indicate total costs of the option projected for
respective years. In certain cases, the costs indicated for these years could be identical;
although, there are a lot of reasons for these costs changing from year to year, and
especially:
First of all, the proposal could be limited in time. In most cases these are
projects of public investments.
Secondarily, the program could contain more stages during a big period of
time.
Thirdly, the program costs could change if the activity level is based on such
factors as population or economic growth.

To calculate the cost of an option, a greater attention should be paid to the detailed aspects of
implementation. Below are given several subjects suitable for this stage:

After collection of all data concerning the modality of option implementation, there could be
initiated the estimation of charges for staff, of incidental administrative charges, of transfer
paiments.
Besides the costs of implementation, there should also be mentioned the costs afferent to the
activities associated with public policies or other indirect administrative activities, which will be
associated with public policy but realized by the staff existent within authority. Even though these
activities could augment the charge of authorities, these should not be included in option cost
evaluation if the program proportions do not emply the new staff recruitment. These internal costs
are not sgnificant, difficult to be estimated and thus should be considered as a part of regular
responsibilities of the authority.

2b. Financing available from Medium Term Budgetary Framework/budgetary allocations.
This section should incicate the sum of funds already allocated for this public policy within
Medium Term Budgetary Framework / budget. If public policy implies consolidation or
extension of an existent program, then there should be included the financing for existent
activity level. Also, in case of new program proposal, there could exist funds allocated in
Medium Term Budgetary Framework/Buget as a part of planning of National Development
Strategy/Medium Term Budgetary Framework, and calculated on the base of a preliminary
estimation of costs. In any case, these funds currently allocated for the respective public
policy should be also included in this section of the form.

The public authorities should identify all potential fields of economies from other parts of
budget by reason of limited capacity of Government to finance new public policies and to the
extent possible should reallocate the resources from minor priorities. This section is
overwhelmingly important, because it presents not only an altenrate financing sourse, but
also demonstrates the importance of this public policy for authorities vis-a-vis other their
activities.

Box 9. Key subjects for costs evaluation

What new services will be provided and which will be the activity volume?
What kind of administrative activities will be needed for provision of services? What staff should be
emplyed and whether there are needed any new bureau facilities?
Where will the services be provided? Are the units or regional offices needed?
Will any payments or other benefits offered to people or enterprises? What is the cost of benefit for
every person or affair? How much beneficiaries are foreseen yearly?

36
The economies can be made from two sources. The authority could have a surplus of funds
resulted from increase of efficiency or thanks to a lower activity level than it was expected.
In these circumstances, these funds reallocation should not affect the level of services
provided by authority. The second source of economies is when the authority identifies an
activity or program as unnecessary or of low priority comparing to any new proposal or other
programs of authority.

2c. Need of additional allocations in Medium Term Budgetary Framework /Budget (2a-2b).
To determine the necessity of additional financing to that already established in allocations of
Medium Term Budgetary Framework /Budget, it is necessary to deduct the sums indicated in
2b from sums given in 2a. The difference obtained will represent net increase (or net
decrease) of financing needed for proposal implementation. In case of new programs, for
which the allocations are not foreseen, the sum will be equal to total cost of program.

3. Eventually available facilities to cover additional requirements. To fill in this section, the
public authority should specify other possible sources of financing.

3a. External financing available for additional necessities covering, though not included in
Medium Term Budgetary Framework. This section should specify the eventual resources of
external donors not covered by actual Medium Term Budgetary Framework, but eventually
can be included in the next MTBF (with reference to the donor name and stage of
negotiations).

3b. From technical assistance (direct donors financing). This section should include in it all
kinds of technical assistance which will cover a part of program costs.

4. Impact on budget income. It is possible that the public policy generates incomes from taxes
or other tools used for progit obtaining. Even if these funds are not automatically available to
authorities, these will reduce the total cost of policy for the Government and thus could be
considered as an alternate financing source. Although it is very important to consider within
other sections of general impact evaluation the effects of these taxes on economic entities or
individuals who pay these taxes. This question is considered below, in section concerning the
conformity costs and the economic impact evaluation.

5. Need of resources in lack of financing sources (2c-3-4). This section represents the
generalization of the option concerning the budged and Medium Term Budgetary
Framework and is calculated by deduction of cells 4 and 5 from cell 3. At the same time, it is
very important to recognize that the sums from 4
th
and 5
th
cells imply certain risks: the
economies reallocation could be impossible; the donors assistance could not be materialized;
the incomes obtained from taxes could turn out to be too optimistic.

As it was already mentioned above, the authority is responsible for evaluation of the impact
produced on budget by every option, with the help of this table (or as prescribed by the Ministry of
Finances). It is however strongly recommended, that the authority initiates a dialogue with Ministry
of Finances in course of preparations for fiscal impact evaluation, in order to minimize
disagreements which can appear at a latter stage of consultations.

Table 10: Form for fiscal impact evaluation
(thousand MDL)
Functional classification (basic group, group) and/or classification by
program:

Actual
budget/
Medium
Medium
Term
Budgetary
Medium
Term
Budgetary

37
____________________________________ Term
Budgetary
Framework
Year 1
Framework
Year 2
Framework
Year 3
2. Impact on public expenditure (by economy categories):
a. Total option cost
including:
Expenditure for provision with personnel
Goods and Services
Payments to individuals
Transfers for products
General expenditure

b. Financing available from Medium Term Budgetary
Framework/budgetary allocations*
including:
Goods and Services
General expenditure
(* if the financing comes from more sources than from one single
minister, present its detailed description on a separate page)

c. Need of additional allocations in Medium Term Budgetary Framework
/budget (a - b)**
including:
Goods and Services
General expenditure
(** Negative sums denote Net Economies)

3. Eventually available facilities to cover additional requirements:
a. External financing available for additional necessities covering, though
not included in Medium Term Budgetary Framework
Source :___________________________

b. From technical assistance (direct donors financing)
4. Impact on budget income
5. Need of resources in lack of financimg sources (2-3-4)

5.4. Administrative impact evaluation

The evaluation of administrative impact or feasibility of options performing is another parameter of
analysis which helps to make decision on relevance of public policy options in aspect of analysis of
administrative requirements and needs at the stage of implementation. The public authorities should
initially think on administrative interventions required for public policy implementation. When
initiating a new public policy (adoption of a new legilsation, program creation or modification),
there should be also considered its practical consequences both at the initial stage and at an
advanced stage of implementation.

In general terms, the administrative impact evaluation implies reflexion not only on immediate
questions, but also on the aspects of duration which do not seem evident at first sight. An important

38
aspect of this evaluation constitutes the planning of organizational needs and resources for public
policy options. This aspect has been also considered in previous section regarding the fiscal impact
evaluation. The requirements for periodical implementation can advice the option price, can reduce
its effectiveness, cause delays and even prevent the realization. Thus, this type of administrative
consequences evaluation has the following objectives:
To specify the level of evaluation feasibility, including the probability of apparition of
additional budget costs besides those already allocated in Medium Term Budgetary
Framework / budget, including for next years
To planify practical details of implelmentation
To suggest modification of certain options which will minimize certain obstacles in
implementation.

From the perspective of administration, the implementation of new public policies implies new
functions within public authority or other organizations, or modification of existent functions. The
key fields to be examined in the context of administrative impact evaluation are:
The need in a new legislation or in additional amendments and/or regulations, which should
be approved by the initiating authority, Government or Parliament. It is important to analyze
the probability of these modifications in legislation to assure their realization without
obstacles, as well as to estimate the changes in behavior of certain categories of people and
prevent undesired effects. For example, the increase of tobacco taxes in addition to increase
of the cost of smokables and reduction i number of smokers could generate contraband of
smokables.
The application of mechanisms implied by public policy and, if necessary, sanctions
administrative methods, penalties stipulated by legislation, civil and/or penal liability, or
their combination.
Organizational auspices foreseen for process of implementation and associated requirements
- implication of subordinated agencies, local bodies or NGOs.
Eventual reactions on public policy option both during the period of elaboration and
Box 10. Key subjects for administrative impact evaluation

1. How much agencies/organizations (both internal and external) should cooperate to assure a successful
implementation? Are these experienced in public policy provision or administration (program, services,
application of regulation)? Will this option require the contraction of the private sector?
2. Are the resources (financias, human, information, etc.) available for implementation? Is the qualified
personnel available both initially and in future? Could certain resources be unavailable or could exist any
incertitude regarding their obtaining. Are the discussions with potential donors needed?
3. To what exend does this option need creation of a new institution, a new function, procurement of new
equipment or implication of new administrative procedures? Should be considered such elements as time
needed for vacancies occupation, transfer of public officials, approvements, equimpment procurement, time
and facilities for training, support for informational system, etc. These factors will affect the implementation.
4. Are there certain premices for corruption? Is the risk minimal or maximal? Why? How could the corruption
be prevented or eliminated?
5. Are there certain interested groups whose interests are affected by the option? The more controversed is the
option, the more changes are associated with this and the more significant will be the probability of
difficulties or even of resistance vis-a-vis the implementation.
6. To what extend does the option threaten the workplaces? Can the powerful syndicates create a solid
opposition. Could there be required any measures of counteraction or compensation and could these augment
the option costs.
7. To what extend does this option need changes in behavior of public officials? Could the public officials be not
able or not want to behave as required.
8. Which are practical details of implementation: will it be easy or difficult? For example, if an information
campaign oriented on youth familiarization with smoking damage is under consideration, is the Ministry of
Health able to implement it?
9. Will the public policy be correlated with the priorities established on the level of institution responsible for
implementation? For example, there is little sense in introduction of new traffic regulations, when the police
does not apply the existent traffic laws or when these are applied by corrupted methods? If a new legal
authority will be created, how will its activity be integrated in the activities of existent agencies?

39
especially during the period of implementation - on the part of supporters and opponents,
beneficiaries and negatively affected groups.

For administrative impact evaluation, consult useful questions provided in the Box 10.
The options should not be eliminated by reason of major obstacles at implemenntation. It would be
better to identify contra-measures which would neutralize these obstacles. Finally, the decision-
making factors decide if this option worths the examination, even with obstacles previewed at the
stage of implementation. The Table 11 generalizates the administrative impact analysis of all
options.

Table 11: Administrative impact summary

Characteristics
Option
No
action
Option
1
Option
2
Option
3
Capabilities of institution respponsible ofr implementation
Human ressources availability
Need of changes at the level of existent institutions
Need of new institutions/ equipment/ procedure
Impact on interested groups and their reaction
Impact on workplaces
Need in certain changes in behavior within public services and institutions
subordinated

Resistance of certain categories
Impact on corruption
Other impacts
Measures for negative consequences attenuation

5.5. Economic impact evaluation
6

A significant part of public policies elaborated and implemented by public authorities produce a
certain impact on country economy. Any state intervention could generate of prevent the activity of
entrepreneurs, and it will finally be reflected in competitivity and economic growth of the country.
Within fiscal impact evaluation there have been considered costs and monetary benefits which will
be materialised in expenses and incomes to state budget. The economic impact evaluation performs
the analysis of costs and benefits of public policy options in nonmonetary equivalent (but preferably
in quantitative terms) on country economy.

Thus, during the evaluation of options impact on economy, a special attention should be paid to the
eventual impact of public policy options on business sphere. In particulat there should be considered
the impact of options on competitiveness, productivity and competitive environment. The
competitiveness is a measure of economy ability to produce goods and services of high quality, to
offer population a decent mode of life and to promote labour market, and competition is driving
force of productivity increase. For example, the increase of subventions in vinicultural sector could
contribute to the improvement of competitiveness of wine production, the resources being invested
in reequipment and increase of final product quality. At the same time, this public policy should be
thoroughly considered allocation of subventions to a sector could situate this sector in conditions
more favourable comparing to other sectors which do not beneficiate of subventions, or to create
distorsions and disloyal competition within this sector by targeting certain categories of companies.

6
Among common fields of EU Member States are the impact on economy, especially on small and medium enterprises
and the impact on competitiveness. Details in Report to the Ministers responsible for Public Administration in the EU member
states on the progress of the implementation of the Mandelkern Report's Action Plan on Better Regulation, 2003.

40
The economic impact evaluation does not only concerns the analysis of the effects on certain
dimensions of the economy of country, but also the impact on certain categories of entrepreneurs,
and especially categorized by their affair dimension small, little and big enterprises. The
evaluation of public policy impact on companies, and especially on small and medium enterprises, is
very important, because it constitutes the base of a health economy in the country. Thus, any
intended or not intended impact on decisions concerning the production, the technology
development and the innovative solutions made by enterprises, is very important and should be
considered.

The companies and citizens are under duty of different conditions and obligations derived from
public policies approved. These can be associated with observation of new public policy, but can be
also related to bureaucratic work which could be evited and represents a so-called administrative
charge or conformity costs for companies and citizens. Thus it is important to examine the effects
of the option on natural persons and legal bodies and whether it represents an unuseful
administrative charge.

There are two basic types of conformity costs: single costs and continuous costs. Single costs
concern the company adaptation to a new or modified public policy and include charges for
information (of policy identification and understanding), charges for modernisation or introduction
of new production processes/equipments/buildings/software and charges for procurement of
specialized services (for example for accountancy, information technologies, legal services).
Continuous costs concern the maintaining of the state of affairs to assure a continuous observance of
public policy and include individual, staff and time costs, taxes for inspection / applying, for
licencing (application, correspondence, publicity) and costs which concern the paper
work/administration/office activities (data compilation, time needed). To evaluate the conformity
costs, the authorities should determine relevant activities to be carried on by citizens and /or
companies for every option.

While considering possible impacts on enterprises the activities of which concern the investments,
operational costs, goods and services, there should be also analysed if the option of public policy
affects the business sphere. The following questions can help at evaluation of economic
consequences of public policy options:

Box 11. Key subjects for economic impact evaluation

1. Whether the option produce any negative effect on business sphere from the Republic of Moldova?
2. Does the proposal create any advantages or desadvantages to certain firms as compared with others?
3. Does the proposal contain any rules which (in totality or partially) liberate the market/the sector of competition
rules application, thus eventually creating or intensifying a monopole?
4. Does the proposal contain any rules which directly intervene into the policy or firms concerning the
commercialization or prices fixing for their products/services; limits or reserves the distribution for certain
channels or mediators, thus restraining the consumer choice or creating obstacles for newly-crated companies?
5. Does the proposal facilitate or interfere with foreign or Moldovan commercial proposal and investments?
6. Does the proposal affect the training level and labour force skills?
7. Does the proposal affect the entrepreneurial activity, especially small and medium?
8. Does the proposal affect the innovation and creativity?
9. Does the public policy influence both directly and indirectly the affordability or appreciation of production
factors , for example: primary material, semi-finished products, components etc., of mechanisms and equipments,
of work, licence taxes, costs of inspection, etc.
10. Whether the investment decisions and changes in affordability and/or appreciation of production factors will
result in modification of modality of goods and services production used by companies, range of company
products (new or substituent products), quantity of goods and services produced by the company and financial
viability of companies actually functioning at correspondent market?
11. As a result of costs increase, to what degree does the structure of market allow the tranfer of a part or of all costs
to the clients or inversely to producers?
12. Whether the proposal will generate eco-innovations, for example, by means of new methods of work, an efficient
use of natural resources and reducing expenses on refuse collection, which in their turn will reduce general
charges of companies?
13. Who is directly affected by the option? The categorization of affected groups by type, dimension and sector helps
to determine the distribution effects. For example, self-employed persons or little and medium enterprises
support costs (especially those occasional), in a different way as big corporations do.

41

Whithin the process of conformity costs evaluation it is important to consider the obligations and
requirements which could be implied by public policy option. These are:
a. The obligation to present information: it concerns different modalities to obligate the
companies and citizens to report, to offer data, to present declarations of incomes, to
require permissions/authorizations/subventions, to comply with marking
requirements, or to provide information concerning complaints and contestations.
b. Obligation of notification: it concerns the liability of companies and citizens to notify
the authorities on certain activities, for example, danger cargo transportation or
construction works in apartment.
c. Obligation to pay taxes: direct taxes associated with certain activities or
authorizations
d. Obligation to modernize or introduce new production processes, equipments,
buildings, software.

The results of economic impact evaluation will be synthesised in Table 12, as it follows.

Table 12: Economic impact summary

Field of consequences
Option
No action
Option
2
Option
3
Option
4
Effect on business sphere/ competition
Effect on trade/ innovations/ investments
Differencial consequences of sectors/ regions
Effect on costs supported by economic agents
Effect on labour force
Other impacts
Measures for negative consequencies attenuation

5.6. Social and poverty impact assessment
7

The Governmental actions should be oriented not only to creation of favourable business sphere and
to increase of population welfare but also should prevent the risks of negative effects for vulnerable
categories of people or widening social inequality. Thus, the basic objective of social and poverty
impact assessments is to determine the impact of public policy options on individuals or groups of
individuals confronted with difficulties or whose situation coud become worser as a result of
implementation of the respective public policy. In this context, it is necessary to identify all possible
negative impacts, to adjust all actions and thus reach maximum benefit while preventing negative
effect on certain categories of population. It is also important to determine positive impacts on
society in general and on vulnerable categories in particular, in such a way that these were increased
as much as possible.

The identification of positive and negative impacts implies the identification of categories of people
to be affected by public policy. In terms of problem specificity, there are various categories of
people who could be affected by promoted public policy. These can be single parents, families with
many children, old people, groups dependent on various allowances (unemployed people, people
with low income), disabled persons, social minorities from rural or urban zones, tramps. At the same
time these can be not only target groups or vulnerable categories, but also vulnerable categories in
general terms, and even people who are not referred to any of categories mentioned above, but who

7
This section is based on A Users Guide to Poverty and Social Impact Analysis (World Bank, 2003), Good Practices
In Using Poverty and Social Impact Analysis to Support Development Policy Operations, (World Bank, 2004) and
Guidelines for Poverty Impact Assessment (Ireland, 2007).

42
could just become vulnerable as a consequence of public policy implementation. An especial
attention should be paid to factors who deal with multiple disadvantages such as numerous families,
people with low incomes and unemployed persons.

The social impact specificity and magnitude depends on the field of intervention. Its aspects persist
in a lot of public policy fields employment, education, health, housing, etc. These however persist
first and foremost in public policies properly, and these are denominated and redistributive. For
example, public policy for providing nominative compensations is destined to support vulnerable
categories, but can also contribute to the errors of inclusion such as support of certain persons who
although rank with certain categories are not poor, or to the errors of exclusion such as omission of
certain persons who do not rank any established categories, but are poor. In this context, it is
necessary to reconsider the public policy in such a way than these errors be eliminated.

At the same time, the social aspects persist in economic public policies. For example, the decision to
build a railway can result in engagement of labour force in the process of construction leading to
unemployment rate decrease, but could also imply the change of domicile for certain households
situated on passage or railway. This situation should be foreseen and suitable measures enterprised.
Also, public policies which concern the deprivation of certain rights, subventions or liquidation of a
number of enterprises, should take account of eventual impact on labour force. The following
questions help to identify the social and poverty impact:

In function of public authorities capabilities, the social and poverty impact evaluation can take the
form of of a narrative description which determines the target categories of public policy, as well as
the categories of people who could be negatively affected by Government intervention, specifying,
if possible, the category of affected pesons poor, unemployed, disabled, etc. and the type of the
impact lose of work, reduction in income, infringement of certain rights, etc. In case when the
capabilities of public authorities allow, it is recommended to estimate the number of affected
persons, the impact of public policy on poverty level and the degree of increase or decrease in
incomes of these categories as consequence of respective public policy implementation.

Table 13. generalizes the costs obtained on the base of answers to these questions, by specifying the
probability of impact lack, of positive or negative impact produced by the option.
Box 12. Key subjects for social and poverty impact assessment

1. Which are target groups of the options and how will these groups be targeted? Enumeration of these
persons and groups toghether with anticipated results relevant for everybody.
2. Which are differencies between target groups which could result in a nonuniform distribution of public
policy benefits and how could this situation be solved? Could there be more than one target group or a
diversity within a target group and could these be considered differently and by different means. For
example, in case of an educational youth oriented program the youg people who have little children
could need additional services for participation; the minorities could need support in the field of
language; youth from rural areas could also need additionsl support. In such cases, there should be
considered all possible measures which could be applied for improvement of situation of target groups
which could not fully benefit of public policy in the form foreseen at the stage of policy elaboration.
3. Does the proposal consider the inequalities which could lead to poverty?
4. Which changes will the proposal produce in public policies or in existent procedures and how relevant
are these for groups identified as the most vulnerable? Discussions of these subjects can elucidate the
unintentional consequences both positive and negative.
5. If the proposal does not produce any poverty impact, can there be identified any other options which
would generage a positive effect?
6. If the proposal produces a positive impact, will this reduce the poverty level or prevent the
impoverishment?
7. If the proposal produces a negative effect, cwhich options or measures can be considered for this effect
diminuation?

43

Table 13: Summary of social and povery impact
Option
No
action
Option 2 Option 3 Option 4
Description of affected groups
Impact on incomes (+-)
Impact on employment
Impact on citizens rights
Impact on powerty
Impact on inequality
Impact on citizens security
Impact on social exclusion
Impact on health of population
Other impacts
Measures for attenuation of negative
effects

5.7. Strategic environmental assessment

Considering the fact, that a healthy environment is essential for quality and prosperty of life,
whereas the damages and costs produced by pollution and climate change are significant, it is
important that within the process of public policy analysis the public authorities consider all
eventual ecological effects of identified options. One of tools largely used in this aspect is strategic
environmental assessment (SEA). This facility is used for evaluation of the impact of public policy
options on environment and health of population
8
. Public policies producing a significant impact on
the environment (both positive and negative) should be subject to a strategic environmental
assessment, to identify the amplitude, duration and, on the occasion, the gravity of the impact.

Actually, the public policy elaboration is not accompanied by the analysis of the environmental
impact, though the documents of project and planning both public and private should be subject to
ecological expertise (in accordance with Law no.851-XIII from May 29, 1996 on ecological
expertise and environmental impact evaluation)
9
. For elimination of this legislative gap, the Ministry
of Ecology and Natural Resources has elaborated the draft Law on strategic environment evaluation,
the main target of which is to assure the analysis of public policy documents concerning the eventual
effects on the environment and population health, as well as integration of environment
considerations wherever it may be necessary. Besides of these, the draft Law describes the stages of
strategic environmental assessment and the requirements associated.

The European Commision makes distinction between the environmental impact evaluation
(Directive 85/337/CEE on the assessments of environment effects produced by certain public and
private projects), which is performed for all public and private projects of construction or
rehabilitation of certain objects specified in Appendix1 of Directive, such as factories, airports,
dams, etc. and strategic environmental assessment (Directive of Council 2001/42/CE on the
assessments of environment effects produced by certain plans and programs), which is performed

8
In 1993 the Republic of Moldova has ratified the Convention on environmental impact evaluation in transfrontier
context, supplemented by Protocol on strategic environment evaluation, that should be obligatorily implemented by all
signatory states by introduction of objectives for assessment of ecologic effects of public policies at the stage decision-
making. The objectives of this Protocol are the similar to those from Directive 2001/42 of the European Parliament and
Council concerning the evaluation of the environment effect produced by certain plans and programs, adopted June
2001, that should be obligatorily implemented by all EUs member-states and countries currently negociating their
adhesion.
9
The Ministry of Ecology and Natural Resources has recently elaborated the draft Law on environmental impact
evaluation, which will substitute the Law no.851-XIII from May 29, 1996.

44
for public policies plans and programs and public policies in general. Even though these two types
of evaluations concern different subjects to be evaluated, the principle of analysis always is the
same. The results of strategic environment evaluation of public policies frequently serve the base of
evaluation of the environmental impact produced by public and private projects, which are
characterized by a higher degree of detalization.

As opposed to economic, fiscal and administrative impact of public policies, the environmental
impact can not be perceived at the stage of options analisis. A great part of public policies do not
produce any environmental impact or may produce an insignificant effect on the environment. There
are however certain public policies, especially in the fields of industry, agriculture, energy and
transports, which could produce a significant environmental impact. The list of policies harmful for
environment is more extended
10
. For example, the construction of industrial parks, railways and
agricultural extensions through deforestation, destruction of pastures, soil dranage will produce a
bigger environmental impact, than public policies for pension valorization, wage increase, upgrading
of benefits or extention of free medical services for population. There are however certain public
policies which do not seem to have an immediate environment effect, but a deep analysis, including
examination of practices of other countries, will show the possibility of arising of a long-term
ecologic impact (such as the impact on global warming of refrigerators and conditioners
production).

Because of difficulty involved in obtaining of quantitative information concerning the environment,
the most important part of evaluation will be qualitative. The strategic environmental evaluation
implies the analysis of public policies in the aspect of eventual environmental effects and impacts on
other factors, especially on biodiversity, fauna, flora, soil, water, air, climatic factors, material
goods, cultural patrimony, including archaeological and architectural patrimony, landscapes,
population, human health and interaction between these factors.

Also, the analisis implies the reflexion on the character of these effects: secondary (generated not by
public policy itself, but by its primary impact), cumulative (combined effects of public policy),
sinergetie (generated by several public policies), short-, medium- or long-term, permanent or
temporaty, negative or positive. The environmental effects are not geographically-limited, thus the
policies implemented by the Government could affect the environment situation of neighbourhood
countries. Whan any plan or program could imply a transfrontier environmental effect, its
implementation should be thoroughly considered.

The strategic environmental assessment should be realized along with other analyses of public
policy impact (fiscal, economic, social) and thus it is possible that the decision-making factors face
difficulties in determination of a preferred option, because public policies rarely produce positive
impact on all sectors and fields concerned without producing any negative impact on at least one
analysed parameter. The preferred will however be the option, which produces an unessential
environmental impact but significant financial benefits (including positive social and poverty
impact). If the negative ecological effects of any option are significant, and the economic and fiscal
benefits inferior to the cost of these effects attenuation and of damage to the health of population,
the public policy initiator should specify this in public policy Proposal and recommend to the
decision-making factors another option. The financial benefits shall not prevail over damages caused
to the environment, human health and abilities of following generations to satisfy their necessities.
When public policy solves important economic and social problems but produce a negative

10
The strategic environment assessment is obligatory for public policies elaborated for the following fields: agriculture,
silviculture, fishing and aquaculture, energy, industry, transport, tourism, waste treatment, water economies,
telecomunications, regional development, site improvement and urbanism or land use, and which establishe a framework
for approval of future projects which will ever be subject to the procedure of evaluation of the environmental impact
according to the respective legislation.

45
environmental impact, in lack of any better alternative, the initiator of public policy should present a
plan for attenuation or elimination of negative environmental consequences.

When selecting public policies, it is recommended to accord special priority to the developming
measures which: promote and facilitate the use of the best technologies available; promote the
investments in brownfield vs. greenfield; promote the energy efficiency, minimize and reduce the
energy demand and promote the reutilisation of waste; have as objective the production and
replacement of fossel combustible with biocombustibles; promote the environmental services in the
sector of tourism and tourist activities such ase ecotourism, agrotourism, etc.; have an "ecological"
approach of landscape and ecosystems, such as rehabilitation of industrial areas or actions related to
afforestation and areas development / green spaces. The following subjects can be useful to public
officials in strategic environment evaluation of public policy options:

It is extremely important to analyse the options of public policy in the aspect of their impact on
human health, which could be affected as concequence of negative environmental impact of public
policy. At the same time, it is important to take account of the fact that the health could be affected
not only by the environmental situation, but also by social aspects such as living conditions, which
are often determined by economic aspects. In this context, the impact on the health of population
could be considered at the intersection between economic, social and environmental impact (see
diagram 6). To the extent that the implications of public policies into the health of population are
extremely significant (the gray portion is more extended) it is recommended to establish a number of
actions to prevent the negative impact on human health.

Digram 5. Impact on health in intercoppendixion with other impacts

The public officials who will realize the strategic environmental assessment produced by the
alternatives of public policies could synthetize the analysis results in a standard formate or by the
model provided in the table 14.

Box 13. Key subjects for strategic environmental assessment

1. On which natural resources does the proposed public policy produce the impact (soil, water, air,
landscape, etc.) and how does this impact manifest?
2. What is the probability, duration, frequency of ecological effects of public policy?
3. Is the public policy impact irreversible? If yes, than which are actions required?
4. Whether the public policy will create risks for human health (for example, as results of accidents or
pollution)?
5. Which is the magnitude or extension of effects (geographic area and dimensions of pipulation that could
be affected)?
6. Will the proposed public policy produce impact on areas or landscapes with statute of protection
established at national, community and and international level?
economic impact social impact
environmental impact impact on health

46
Table 14: Summary of strategic environmental assessment
Field of impact Option No
action
Energy consumption and
natural rsources erosion

Wastes collection
Air pollution
Noise
Water pollution
Soil pollution
Landscape deterioration and
affecting cultural, historical
and archaeological values

Transport volume increase
Impact on population health
Transfrontier impact
Other impacts
Measures for negative
consequences attenuation

5.8. Evaluation of risk and incertitude

Within the process of elaboration and evaluation of public policy options, the public officials expect
that a relative stability will persist within public administration during the entire period of public
policy implementation. Whereas in reality there can intervene various events or situations both
unexpected and expected, which have not been prevented by rigorous measures. The risk and
incertitude suspend the process of public policies elaboration and implementation and thus should be
considered at the stage of public policy impact evaluation. The risk means arising of situations
which could establish the probability of certain event non-realisation or of any impact arising,
whereas the incertitude is the situation when the probabilities are known. For example, the drought
represents a risk for agriculture because the probability of this is known and is very high. While the
losses caused by the drought can be only presupposed, being extremely uncertain. All stages of
policy options ex-ante evaluation should be permeated by the analysis of risk and incertitude.

The evaluations regarding the immediate future only, such as budget for the next year, could be
more precise, but could also result from short-sighted decisions. The evaluations which consider
the benefits, budget costs and consequences for a longer period of time, could confer to analysis an
increased degree of realism, although, the longer is the period of time, the more significant are
incertitudes and estimations. For the major part of public policies, the nature and magnitude of the
impacts can not be certainly predicted, especially when there is considered a longer period of time.
The public policy implementation could be affected by other interventions, unforeseen
circumstances, and, in general, by bahavior of organizations and interested parties in one or another
field.

The evaluation of any option acceptability or feasibility can be based on assumptions and
estimations enough real but sill not absolutely precise. These can be optimistic or unjustifiably
pessimistic. For example the estimation of assimilation capability of economic subventions can not
be underappreciated, while the estimations of the number of families who bring their children for
vaccination could be overestimated. Also, among the risks there can be included: important
resistance of companies identified during consultations, lack of planned donor financing, hezitation
of Parliamant to adopt necessary legislation. It is useful to decision-making factors to know the

47
degree of credibility are these estimations or, alternatively, to what extent the reality differs from
estimations.

The method of elaboration of optimistic and pessimistic estimations will depend on the
circumstances of every particular case and will imply the opinion of public authorities based on the
information available as part of the process of impact evaluation. These alternative scenarios will
help the decision-making factors to see a range of possible effects. The basic idea is, that in case of
public policies involving an eventually significant and volatile effect, the decision-making factors
should be familiarized with the entire variety of results, from the best to the worst; as well as with
the most probable effects. Thus, it is very important for public officials to collect as much exact
information as possible about population group, sector, etc. which concern the option under
analysis. The Table 15 provides the summary of risk and incertitude evaluation.

Table 15: Summary on risk and incertitude
Fields of
evaluation
Option
No action
Implementation
feasibility

Resources
availability

Reaction of target
groups/ general
public

Other risks
Measures of risks
attenuation

48

6. Stage V. Options comparison and formulation of recommendations

The last stage of impact evaluation before its presentation for analysis in paper form is comparison
of options to determine one option recommended for approval. The target of this stage is to compare
strengths and weaknesses of every option and decide which of these is the most effective for
achievement of objectives, with mimimum of disadvantages. At the same time, it is important to
take account of the fact that no one solution is perfect. All options will have both advantages and
didadvantages. When all arguments pro i contra will be generalized, the base for formulation of
recommended option will be formed.

There are a lot of techniques of options comparison. Among quantitative techniques, the best known
are cost-benefit analysis, cost-effectiveness analysis, analysis of rentability, etc., and the most
popular qualitative techniques are multi-objective analysis, matrix approach, piloting, etc. Because
this guide does not emphasise the quantitative approaches, but a combination of qualitative analysis
based on questions and answers and calculation of certain costs of the options, at this final stage of
impact evaluation there are mostly recommended the qualitative approaches in options comparison.

An accessible method which could be used by all public officials is multi-objective analysis which
allows the evaluation of options in respect of different types of impacts of aspects of the impact, all
of these having their proper weight. This approach is especially useful in cases when the impact of
public policies options of is difficult to quantify or monetize. The multi-objective analysis is
composed of the following stages:

1. Every type of the impact or of impact's aspect should be evaluated on the base of the
following criteria: 0 no impact; 1 reduced impact; 2 medium impact; 3 significant
impact; 4 high impact. The impact value can be evaluated by considering the modality of
objectives realization by the options, the level of benefits generated, the fiscal and
administrative impact and the result of consultations. At the same time, the public officials
can modify these criteria, but obligatorily considering the achievement of objectives and of
most important impacts by means of options comparison. The comparison can be established
as it follows:

Achievement of options (effectivity)
o High realizes all objectives, no disadvantages
o Significant - realizes the major parts of objectives; minor disadvantages
o Medium realizes a great part of objectives; disadvantages can be mimimized
o Reduced realizes certain objectives; significant reserves of interested parties
2. Objectives setup
4. Options analysis
selection of recommended
option

49
Benefits (economic, social, ecological impact)
o High efficient in terms of the cost and contribution to the results
o Significant - efficient for almost all aspects
o Medium less efficient, but should contribute more to poverty level decrease or affect
less the environment
o Reduced a lot of indirect disadvantages; the costs exceed benefits
Ficsal impact
o High resources are available in the budget; the potential of income is high
o Significant - a part of costs will be financed from budget, and for another part the
donor financing is available
o Medium new charges for financing of which there are not sufficient funds
approved or promised
o Reduced is required a new significant financing
Administrative impact
o High the intervention can be implemented by private sector/ by volunteering,
without involving costs for state; responsible organizations provide support
o Significant - the intervention can be implemented by authirities in partnership with
private sector and other interested categories
o Medium the intervention can be implemented by authorities with particulat
changes of functions or system adjustments
o Reduced the intervention implies the creation of a new agency or an essential
system moidfication
Consultations
o High interested parties have a positive attitude
o Significant - interested parties have positive attitude excepting several dissatisfied
participants, with establishment of measures for consideration of aspects which
bother some of them
o Medium a part of interested parties demonstrate a positive attitude
o Reduced the interested parties demonstrate a high-level scepticism vis-a-vis the
proposal

2. Every type of impact or of its aspect should be pondered out in function of its importance,
the total pondered value being equal to 1.
3. At this stage is calculated the pondered value of all policy options by multiplying the value
attributed to the impact by its weight. The option with highest amount of points will be
recommended.

Below is illustrated a simplified example of multi-objective analysis conceived for three options for
achievement of the objective which regards the transport of 100% of pupils in schools from rural
areas. Providing rural areas with transport is a modality of attracting pupils in schools and reducing
school abandonment. To achieve this objective, there have been identified three options of public
policy: 1. Status quo the school transport does not function. 2. Establishment of a new public
network of school buses for free transportation of children. 3. Establishment of a network of private
school transport and allocation by the state of subventions for tickets for transportation of children.
These three options are analysed in the Table 16, in the aspect of above-fixed criteria.

Table 16. Example of multi-criteria analysis
Evaluation creiteria Points (0 4) Weight (0-1) Impact
Option 1. Status quo
Achievenemt of objectives 0 0,4 0
Benefits 0 0,2 0
Fiscal impact 0 0,1 0
Administrative impact 1 0,1 0,1

50
Consultations 1 0,2 0,2
Total 0,3 reduced impact
Option 2. Public transport offered by the state for free
Achievenemt of objectives 4 0,4 1,6
Benefits 2 0,2 0,4
Fiscal impact 2 0,1 0,2
Total 2,8 medium impact
Option 3. Private transport with tickets subventionned by the state
Achievenemt of objectives 4 0,4 1,6
Benefits 2 0,2 0,4
Fiscal impact 3 0,1 0,3
Total 3,2 significant impact

In multi-objective analysis we could observe, that the option status quo is excluded because this
does not produce any impact on the fixed objective. The second and third options produce similar
impacts both contribute to the achievement of objective and generate medium benefits because
will produce negative environmental impact by emitting exhausts and on this basis the NGOs from
the field of environment protection could be opposed to this ation implementaion. Despite a lot of
common effects, the third option has accumulated more points than the second did, having a
significant administrative and financial impact thanks to private sector implication in project
financing. This option should be recommended, with elaboration of actions suitable for
maximization of benefits and reaching of a consensus by all parties consulted.

At the same time, at the stage of options comparison, as well as at other stages of impact evaluation,
it is important to apply good judgement and critical thinking. Irrespective of approach applied for
options comparison, it is important to assure, that the following analytical stages be covered by
public officials:
1. All positive and negative effects of every option should be considered in comparison,
irrespective of the form of their exprimation - qualitative, quantitative or monetary.
2. All arguments pro and contra of every option should be contoured.
3. The options should be compared by all criteria of general characteristics such as extent of
objects realization, benefits, including economic, social, environmental, fiscal impact,
administrative impact, consultations results, as well as risks and incertitudes.
4. All options should be generalized in key conclusions which could be used in public policy
Proposal.

In practice, the work group for impact evaluation will possess this evaluation already done at this
stage, because the relative advantages and disadvantages of every option are clearly marked during
the elaboration of analysis at precedent stages and within the process of consultations.

In the majority of cases the impacts of the options are distributed nonuniformly one option can
imply major charges but also generate a significant impact on the economy, which is in fact the
objective of public policy. At the same time, the option of public policy could produce a negative
impact on certain categories of people and/or on the environment. Or the costs could be less
significant, as well as the anticipated economic impact, but could at the same time negatively affect
the environment or certain categories of people. There are a lot of these impacts combinations, and
the decision concerning the recommended option is conditioned by different factors: resources
availability, possibility to implement measures for attenuation of negative consequences produced
by preferred option, etc. A number of impacts combination and rigorous recommendations are
illustrated in the Table 17 provided below.

51

Table 17. Impact combinations and recommendations
Impact type Economic/fiscal
impact
Administrative
impact
Social and
poverty impact
Environmental
impact
Recommendation
Option 1 High costs
high benefits

High -
need of new
laws/institutions
Negative impact Negative impact Not recommended
Option 2 Low costs
low benefits

Medium is
required the
modification of
functions/laws
Negative impact Negative impact Not recommended
Option 3 Low costs
high benefits

Significant
required the
modification of
functions/laws,
resistance of certain
groups
Positive impact Negative or zero
impact
Is recommended the
elaboration of
measures for
settlement of
disputes which arise
between authorities
Option 4 Low costs
high benefits

Reduced
administrative
measures are not
required, there is a
consensus

Positive impact Negative impact Is recommended
toghether with
elaboration of plan
of attenuation or
elimination of
environment
consequences (in
lack of option 3)

Few options will accumulate a high amount of points. Within the process of impact evaluation, the
provocation consists in identification of options which could help in achievement of objectives
which imply minimum of lacks and disadvantages and. However, perfect solutions do not exist
only the best solution among other available solutions. For all that, it is important to leave the
matter of final decision on necessity and modality of providing decision-making factors within
public policy elaboration. There could however exist certain political reasons which could generate
the choice of any other option than recommended option.

All information collected by the moment, which have been covered through five stages should by
synthetized in a table (see Table 18.). The typical formate of this table indicates the options of public
policy and different analytical criteria which have been used. The cells of matrix contain the results
and consequences of every option evaluated by making reference to the criterion applied. If any cell
can not be filled with quantitative data, use qualitative descriptions.

Table 18: Summary of impact evaluation
Option 1
No action
Opiunea 2 Option 3 Option 4
Problem
Objective
Characteristics of options

\Problem solution and
achievement of objective

Fiscal impact
Administrative impact
Economic impact
Social and poverty impact
Ecological impacts
Risks
Conclusions/recommended
option

52
6.2. Formulation of public policy Proposal

When all five stages of policy ex-ante evaluation have been covered, the results of analysis should
be synthetized and exposed in public policy Proposal. This particular document will be presented to
the chief of initiating authority for decision-making. The chief of the initiating authority could
accept or reject the recommended option taking account of certain risks which could undermine the
process of approval or implementation, with which the authors of proposal are familiar.

The acknowledgement on policy impact ex-ante evaluation should be presented in a table by the
model presented below (see Table 19.). An example of public policy proposal elaborated in a
narative form is provided in the Appendix I.

Name of public policy

Institution which has initiated the public policy

1. PROBLEM DESCRIPTION
Target
Objective 1.
Objective 2.
2. PUBLIC POLICY TARGETS AND OBJECTIVES
Objective 3.
Beneficiary 1.
Beneficiary 2.
3. BENEFICIARIES OF PUBLIC POLICY
Beneficiary 3.
Option 1.
Option 2.
4. OPTIONS OF PROBLEM SOLUTION
Option 3.
Analysis of the option 1.
5. OPTIONS ANALYSIS
6. RECOMMENDED OPTION
7. SYNTHEZIS OF CONSULTING PROCESS

Date of presentation

Signature of Director of the Initiating Authority

Appendixes: X file

The structure of public policy Proposal follows the principle of ex-ante analysis and should contain
data from problem determination up to the recommended option and the synthezis of plan of
consultation. Besides the analytical information, there should be included also the information about
the initiatory authority and the date of PPP presentation. It is important that PPP be signed by the
chief of the initiatory public authority. The public policy Proposal will also contain appendixes. In
the appendixes there will be presented a developed evaluation, which can contain graphics, tables,
diagrams and a detailed narrative description. All argumentative documents such as detailed
analyses, expert reports or summaries of consultations should be appendixed too.

The application through the entire evaluation process of tables describing the stages of evaluation
provided at the end of chapters, could be very useful in public policy Proposal formulation, to which

53
these tables could be appendixed. When a public policy concerns a major decision, the PPP becomes
more detailed and implies the elaboration of a general summary. The informative note on the
foundation of a draft of regulatory act should be elaborated on the base of public policy Proposal
representing the summary version of Proposal.

The modality of presentation and the volume of public policy Proposal have not the same degree of
importance as the quality of evaluation has. The evaluation should be elaborated in a simple and
clear language. The decision-making factors have not time for examination of extended public
policy proposals and will not able to understand the essence of documents exposed in an incoherent
language or which does not consider the subject concerned. The most important is that the Proposal
of public policy reflect all considered options rather than the preferred solution. Also, it is necessary
to evit technical terms which proper to a restrained circle of persons. These terms could be
combined with a narrative description, which would clearly explain the meaning of terms to other
categories of readers. The goal of public officials in formulation and remittance of public policy
proposal consists in stimulation and facilitation of decision-making process instead of its
complication. The recommendations concerning the public policy should offer to decision-making
factors all information necessary for particular subjects promotion or certain problems solution, and
the final solution of these will be based on informed decisions.

54
CHAPTER III. CONSULTING PROCESS

1. Consulting tools in the ex-ante assesment of the impact
11

As already mentioned in the previous chapters, the consulting process represents an essential
component of the analysis procedure, needed at all ex-ante evaluation stages of the public policies.
The Government consultancy with the community, interested parties and the experts became a
common practice in the democratic states. The consultation means only a Government interaction
way with the society, other patterns can be the informing and the involvement in the
implementation. The consulting process is very important because only on this phase it is
determined the implication procedure of the community in this process and the step when the society
will be involved in this process. This type of consultation cant be confounded with the consultancy
between central public administration authorities the inter-ministerial informing process. This part
describes the consulting tools in the evaluation process of the impact, until the public policy to be
approved.

The organization of the public consultancies are important, because these:
can enlarge the row of alternatives of public policies and generate new ideas
are a source of valuable and cheap data for elaboration process of the public policies
can be applied in order to check the public authorities assumptions and analysis
accomplished by them
emphasizes the possible issues from the early stage, offering public authorities a chance to
correct them before the public policy to be approved
contributes to the increase of the democratic legitimacy and the guarantee of examination of
a large representation of interests.

Before initiating the consulting process it is necessary to identify those categories of persons who
could be involved. It is essential to develop a wide list of participants from the adherents to
opponents, from beneficiaries to losers, from interested persons to influent persons. The most
important is not to exclude those categories of persons who will loose after implementation of public
policy, because these could undermine both the implementation of the public policy and and the
beneficiaries of the public policy, including the vulnerable categories (who are not very often heard)
in order to coherently direct the proposed intervention. Thus, there are two main types of
consultations:

Consultation with the experts
12

Consultation with the interested parties and community
13
.

11
This part is based on the Minimum standards for consultations: towards a reinforced culture of the consultation and
dialogue General principles and minimum standards for consulting process of the parties interested by the
Commission The Commission Communique , COM(2002)704 final and The citizens as partners, OCDE 2001.
12
European Commission and the member states OECD have a rich tradition of consultation with the interested parties
regarding the public policy and regulatory proposals. In order to improve the consulting processes, the European
Commisiion has approved Pentru a ameliora procesele de consultare, Comisia European a adoptat un set de General
principles and minimum standards for consulting process of the interested parties. Similarly, the OECD has prepared
the publication The citizens as partners, OCDE 2001.
See also, The Commission Communique on Gathering and use of experience by the Commission: Principles and
guidelines, COM(2002)713 final.
13
Those affected by the European or national regulation have the right to access and to understand it (Mendelkern
Report, 2001, p.ii).

55
Perfectly, the consultation must take place during the public policy elaboration and impact
assessment process. However, due to the lack of resources and time it could take place at two levels:

Usualy the consultancy with the main interested parties and experts is done at primary phases
of elaborating the public policies and of evaluation of the impact, in order to contribute to the
clarification of the issues field and to contribute to the identification of their options and
consequences.
A wider consultancy with the society is carried out, in most of cases, at a later phase, usually
after the issue and objectives setup and it is going to be established the public policies
options. At this step the consultation is often necessary for checking and information: so that
to verify if the issue was correctly setup and if the objective matches with the interested
parties desires and aspirations, in order to identify the public policies options and their
acceptance degree by the community and, especially, in order to analyze the implementation
fezability.

After the identification of the main categories of interested parties, it is important to consider the
consulting strategy. In the formulation process of the consulting strategy based on the assessed
public policies, the public officials will be able to use the following synthesis table, which gives the
possibility to separate the participants in the consulting process depending on the phase in which
they will be involved and depending on their manner of involving.

Table 20. Consulting strategy formulation with interested parties
Etapa procesului Information
supplying
Consultancy Co operation Empowerment
Public policy
elaboration

Public policy
implementation

Public policy
monitoring

Public policy
assesment

2. The consultation of the experts

The consultation of the experts can take more forms and can involve different categories of experts.
The scientists and the researchers from the Academy of Sciences, from universities, research
institutions, as well as local and international experts and donation organisations
14
. Also, the
consultancies can be carried out with experts who work in service offering organizations, such as
local authorities, implementation institutions, and nongovernmental organizations.

The involvement of these experts in the assessment process of the impact can be demanded at all
phases of the evaluation, even if at different steps of the assessment could be needed different forms
of examination. The experts are united in ad-hoc or permanent workshops. They interact sometimes
through the means of workshops or other deliberative forms. The initiator authority can hire local or
foreign experts on a contract base (from donator organizations, firms or individuals), in case the
examination misses in a specified field. The choice of the experts should be proceeded according to
clear rules, which should be made public and respected. The setup, monitoring and evaluation

14
Law Nr. 317-XV emphasises the role of the good workers and scientists in elaborating legislative projects (Article 34)
and generarly these experts are involved in formal workshops..

56
subdivisions or author subdivisions should keep the data concerning the experts and interested
groups, the clue for the consultancy to take place.
The workshop will not be officially created, in case this is an embarrassing, time and efforts needing
process. It is enough, for example, for the appointed person, who is responsible in the process of
impact evaluation, to organize a meeting for a limited period, based on a plan or consulting strategy
prepared by the public authority in order to evaluate the impact (according to the diagram mentioned
in the informative note sent for notification to the interested parties).

The manner and the consultancy frequency will be setup after the first consulting meeting. Later it
will be decided whether the consultancy contracts, constitution of workshops, conventional
committees, the organization of discussion groups or other consultation types are needed, depending
on the complexity of the discussed subject. Non-formal contacts between the departments, ministries
and experts can generate quick results. These are often welcome on an initial level of public policy
elaboration process and also concerning less serious problems. On the one hand, the presence of the
plurality in the workshops and committees encourages creation of ideas, motivates the debate and
provoke justified opinions and arguments. This diversity of ideas must improve the public policies
and the credibility of the process.

At the same time, the final decision, as mentioned previously, belongs to the political leaders, thus
the analysts recommendations could be partially or even completely approved. The debates on
policies with little budgetary implications and impact should be solved by involving the chiefs of the
initiating institutions of public policies and dissatisfied parties. In case of policies with big
budgetary implications and with a major impact the Interministerial Committee for Strategic
Planning will be invoked.

3. The Consultancy of the interested parties and the community

During the impact evaluation of the public policies, at the same time with the involvement of the
experts in the consulting process, it is important to realize the information and the consultancy of the
public policies with the interested parties. The term interested parties refers to an organization, a
firm or a person who has an interest in an issue and wants its promotion.

Also, it is very important to take into account the capacity and the desire of the interested parties to
express their positions. Some of the interested parties are demanding, well organized and influential.
Others are invisible and not heard, but often they are mostly affected by the public policy
implemented. From the last category can be mentioned the children, the young people, the disabled
persons, minor communities, the pensioners, the villagers, the suburbs inhabitants the persons with
little income , refugees, small enterprises, volunteer organizations, NGO and others. The
identification of the possible interested parties and the accommodation of the consultancy ways in
order to react, play an important role in the consulting process changeover in a helpful tool for
public policies elaboration.

The most common and used manners of consultancy with the interested parties performed by the
Government are:
Comments and remarks procedure
Deliberative tools (workshops, public audience, focus groups)

4. Comments and remarks procedure

57
One of the most spread methods of consultancy is that of comments and remarks procedure which
represents the process of informing the interested parties and/or the society regarding a proposal and
the demand of comments until a fixed date. Depending on the character of the issue, the
consultancies in written form can be of different types: for example, it could be both an extensive
consultancy of an issue with large economic and social consequences and a limited consultancy
concerning the minor or technical aspects of the public policy. It is necessary that the initiators of
the public policies to guarantee the publishing and the sending of all relevant papers depending on
the impact assessment level, indifferently it was or not taken the decision to perform a extensive or a
limited consultancy.

The Government consulting paper must contain the informations and analysis gathered during all
levels of the impact evaluation. This one will contain informations concerning the consultancy
process itself and the procedure to treat the comments. The best consultancy paper will comprise the
next elements depending on the impact assessment process stage:
1. A summary of the public policy .
2. Description of the problem or proposal.
3. The purpose of the consultancy and the suggestion objective.
4. The aspects that need comments; if possible each time these should be clear questions and/or
options.
5. The explanation of the decisions already taken, if needed, and the explanation of preferring
an option instead of others.
6. Different sources of information and factual declarations, if relevant.
7. An explanation regarding the affected parties, including an evaluation of specified groups,
such as small and medium businesses or the consumers.
8. An explanation of the compulsions, such as the aspects not opened for changes (for example
the major electoral promises of the government party or the international engagements, such
as the demands for European integration).
9. The time limit for comments, if possible, the meetings schedule for the other levels of the
decision making process.
10. The name and personal data of the person to be reached if questions arise.
11. The list of consulted persons. This will vary depending on the subject and can comprise
public authorities, enterprises, trade unions consumer groups, commercial associations,
academic community, research institutions, as well as important specialized bodies. The
consulted persons should propose other parties to be consulted.
12. The respondents should explain who are they and whom they represents.
13. The specification whether the responses will be treated as confidential information. A
possible approach of this aspect could be the notification of the respondents that their
comments will be offered to third parties, if they demand (for example the mass-media), in
case the respondent will not expressly ask the response to be confidential.
14. A last part designed for additional ideas or incidentally ignored subjects from the previous
parts.

The demand to offer at least three weeks for opinion presentation represents the key element in order
to obtain an additional value after the consultancies, due to the fact that the most frequent concern in
the consulting process is how to offer a limited time for consultancy and opinion presentation.

New information technologies offer the public authorities opportunities to obtain references and
possibility to offer direct consultancy opportunities during the evaluation of the impact. The most
used are the web pages, the portals with unique entrances in order to insure a free access, email lists
(for example of registered persons, mentioning interest fields), information stalls settled in public
places, online discussions and forums. The access to new technologies is limited anyway and

58
anytime there will be somebody who will not want to use these methods. Thus the public authorities
will combine old and new methods of communication.

5. Deliberative tools

Deliberative tools are more infrequently used by the Government than the written consultancy,
although they offer a helpful background to elaborate coherent policies. Basically, a deliberative
mechanism designates any meeting workshop, round-table conference, public meeting or focus
group during which the public policies authors meet the interested parties or the community so that
to see their positions and to reach a consensus regarding the promoted public policy. The main
advantage of these tools is that they offer the possibility of a dialogue and opinions presentation:
interested parties and the society can put questions to public officials (or to the authorities), who also
can ask the respondents to broadly explain their positions. These methods represent important ways
of consultancy, that help to reveal many essential things, but usually it is needed much time for
developing and implementing them.

The simplest types of deliberative consultancy can be developed without the expert supervision: for
example a public meeting or a round-table conference. The more complicated tools demand the
assistance of the experts. An example is the focus group that gathers a group of persons in order to
share their opinions regarding a specified subject and to reveal more details. This can be a very
useful tool for a detailed study of the public reactions on a proposition. Or, in order to obtain helpful
responses, broad professional capacities are needed, thus a well-educated facilitator should be
employed. When the public authorities deal for the first time with the deliberative tools, they should
choose the most simple forms : public meetings, round table conferences.

6. Analysis of the interested parties opinions

It is difficult how to explain with details how the comments a analyzed, because they will be very
different depending on the treated subject and consulted persons. The analysis will be much easier if
(as mentioned in the compartment concerning consultancy paper elaboration) the public authority
who organizes the consultancy will identify the number of key questions to which they must find
answer and will ask the respondents to prezent their comments via responses , with a final section
other opinions/positions. The majority of respondents will probably follow this form what should
facilitate the analysis.

Other guidelines for the analysis are:
It is important to identify the main issues considered essential by the participants.
The reasons why the participants responded in a specified manner, if possible.
It is necessary to focus on qualitative responses than on the quantitative ones. Obviously the
participants who react to the consultancy events dont represent the total community, thus its
sensless to look for false precision (for example, the exact percentage of the for or against
participants to a proposal) which can lead to bad results. It is important to have a general idea
for the participants position, for the balance of for and againcet opinions (for example almost
a half responded affirmatively, the third part responded negatively and the others abstained).
We should be aware of spontaneous reactions for example some participants can put
questions not yet examined by the Government. In case the questions are important, the
planned structure of the report should be modified in order to include these questions.
The participants cant be forbidden to express their opinions, and the responses should
influence the solution preconceived. The consulting process doesnt have any value if it
doesnt express the real positions of the interested parties and community.

59

After the interested parties took place in the consulting process, they should obviously want to have
further informations concerning the consultancies results. Base informations well elaborated will
inform the consulted persons regarding the general remarks obtained from consultancies and will
explain how they were taken into account. A template or letter can be sent for this purpose. Once the
Government decides on the proposal and makes it public, it is preferred for the public authority to
inform the about this the participants to the consultancies.

In table 21. a plan is offered for the assessment summary of the consultancies, which can be used to
complete the information regarding the consulting process from the public policies proposals.

Tabel 21: Assesment summary
Persons/consulted institutions The participantrs poin of
view
Authorities decesion
Affected parties
Experts
Interested parties
Other

.

60
Appendixes
Appendix I. Example of public policies proposal (it should be replaced with the
example of Small and Medium Enterprises)

The improvement of the municipal system of the heating agent supply
15

Note. Such a complex policy that represents both a high priority and a major impact, will need the
elaboration of a broad assessment of the impact, the general one contained in the Proposition of
public policies described further, but which is not enough for taking a decision, only to offer a
limited description of the difference between the three options.

General description of the proposal

The last twenty years, the domestic political and economical conjuncture, the property related issues,
the quick price increase to fuel and equipment, the economic difficulties of the people led to the lack
of public finances in order to cover the main needs, more than this to do reforms. In addition to this,
due to a poor level of the consumption payment gathering and difficulties to grow the heating taxes,
the heating agent supply company cant have incomes. This leads to the expenses reduction for
maintenance and doesnt permit to make investments for renewing the system, also this leads to a
significant wear of the equipment and a poor quality of services, even despite their price increase.
Almost a half of the heating networks are out of normative wear, and the current expenses for their
activity significantly grew up. As a consequence poor quality services are offered, adding the high
cost of the heating agent, rise discontents and unpaid invoices. In order to solve the difficulties faced
by the heating system and to stop this vicious circle, the Government in co-operation with the
municipal townhall decided to elaborate a national public policy of efficient management of the
heating system, whose assessment is further proposed.

The issue identification

Due to price increase to fuel unpaid heating invoices, the management inefficiency of the national
and municipal authorities in heating agent supply, considerable investments werent made in order
to renew the system, thus approximately a half of the heating network are out of normative wear,
involving great losses of energy, about 25% and a poor quality of the heating services.

The objectives setup

The purpose is to renovate the heating agent system in Chisinau.

Objective 1. is to reduce the losses in the heating networks from 25 % in 2008 to 5% in 2016.

Objective 2. is to guarantee the complete payment of the energy consumption by all the apartment
buildings connected to the central heating network until 2016.

Beneficiaries

15
Hyphothetic case with virtual figures so that to give an example of PPP elaborated in narrative form without the
adequate appendixes

61
The beneficiaries of the public policy are the heating agent consumers from those 2800 apartment
buildings connected to the central system of heating agent supply. Other beneficiaries are the supply
companies with heating agent and water, because they will not have losses anymore and will offer
qualitative services. This will happen only if another alternative in the supply of the present heating
agent system will not be accepted. Otherwise, the management company of the thermal system and
the urban and suburban heating plants may be negatively affected. The townhall is also a beneficiary
of the public policy, because it will fulfill its electoral promises. At this time the Chisinau townhall
offsets more than a half of the heating agent cost which should be paid by the community, and
introducing alternative solutions to the heating agent supply could increase the service efficiency
and could minimise the final cost paid by the society.

The options to solve the issue

An efficient system of the heating agent supply doesnt depend only on the actual modernization of
the infrastructure, but depends on the accomplishment of this purpose with the cheapest costs and
the biggest incomes. In this situation three options of public policy were identified, compared with
the initial option or the status quo. These are:

Option 1. Status quo.
Option 2. Renovation of the municipal heating agent system.
Option 3. Installment of the boiler houses at a district level.

Options analysis

Option 1. Status quo

The central system of the heating agent supply comprises 4 urban heating plants and 20 suburban
heating plants. Even if during the last years were taken actions of modernization of the thermal
infrastructure including donator aids, the circumstance they work in and the level of new
technologies implementation. The possible losses are estimated at 25% from the total amount of the
energy, and 15 % of apartment buildings pay less than 50 % from the cost of the heating agent used.
The townhall offsets more than a half of the heating agent cost which should be paid by the
community, although it has debts of millions lei compared with the heating system management
company, the latter mentioned not having means in order to offer good quality services and to make
investments in the heating system infrastructure. As a result the community dont enjoy the use of
the heating agent in time and from the quality, though it has to pay a growing price.

Another consequence of the above mentioned situation is the consumers discontent who dont pay
for the services and gradually they renounce to use the central heating system adopting alternative
solutions of heating. At the present moment up to 10% from the total number of inhabitants from
Chisinau has adopted alternative heating system and their number is rising up. This fact led to a new
cost increase of the heating, because the incomes declined and the fix costs remained the same or
more they grew up due to operational cost growth.

The option doesnt have and administrative impact, although it has an economic impact, that is
represented by the limitation of the private initiative in this field and the introduction of the quota to
the number of flats that can be connected to the heating agent. The option has a significant social
impact, because the growing price to the heating agent and the offset of a part of it leads the most
part of the monthly revenue of the community to pay the heating agent. This refers to pensioners,
families with many children, unemployed people, etc. The option has a medium impact on the

62
environement, because the major part of the heating plants use natural gas to produce energy and the
fume emissions reache 80 meters.

There are not frequent investments for the municipal heating system that leads to minor
improvements and that dont bring added value to the system. There is the risk that if keeping the
situation unchanged, the municipal heating system will significantly worsen.

Option 2.The resumption of the municipal heating agent supply system.

This option suppose the maintenance of the present heating system and of the institutions involved
in the process, the only investments needed are for the infrastructure system renovation. This fact
supposes the replacement of 130 km of heating tubes with 96 km of warm water tubes in order to
remove the leaking and the heating agents losses and the replacement of the wornt out equipment in
the heating plants. The option will have a fiscal impact of 1,948 billions lei, only 127 millions are
foreseen in CCMT for the first three years of implementing and other 1,811 billion could be
negotiated with the international organizations or lent from the commercial banks. Near 30% from
the cost is designed for tubes replacement and 70% for the wornt out equipment replacement. The
option will imply incomes from the utilization of the heating agent, up to 65, 2 millions lei in the last
year of the project accomplishment, but also from the growing payments till a maximum level of 30
% in the last year on implementing, on account of the reduction of losses up to 7% and also the
implicit diminution of the heating agent cost supported by the community. The incomes
accumulation to the budget isnt the main prerogative of this policy. The investment regaining and
the credit return will be carried out during 12 years.

The option doesnt have both conformity costs and an administrative impact, which deserve to be
examined and can influence the decision. The option will have an economic impact on the supply
companies with heating agent, who after the equipment is renewed will increase the production
competitiveness. At the same time the option could affect the companies dealing with individual
heating system, the demand for this type of heating will decrease whilst the central heating system is
improved. The option will have a social impact- the consumers will enjoy good quality services
without big delays, because enough resources will be in order to keep in good situation the
municipal thermal system. This option will generate a diminution of the unemployment through the
mean of complex repair and resumption of the heating infrastructure. This option will have a little
impact on the environment, due to new equipments used in the heating plants which dont pollute
significantly the environment.

Although, there is the hazard for the durability of this option, because the infrastructure repair , the
change of the management and allocation of resources to maintain the system could return the
former problems after some time.

Option 3. District boiler houses instalment

This option supposes to replace the urban and suburban heating system with district boiler houses
(which includes from 10-15 buildings), that will be connected to natural gas and water pipelines
network and will be distributed to the districts households. This will stop the heating plants work
and new tubes will be installed that link both the boiler houses to the natural gas and water pipelines
network and the apartment buildings to boiler houses. 190 boiler houses are needed in order to
guarantee a good functioning of the new heating system, a boiler house costs 980 thousand lei. The
new tubes instalment will be nearly 1,3 billions lei. The total ost of this option is 1,48 billion lei,
only 127 millions are foreseen in CCMT for the first three years of implementing and other1,811
billion could be obtained from the international organizations or from the private sector, who could
administrate this sector in o-operation with the state. The budget revenues will rise up to 118 billions

63
lei when the project carried out reaches the last period, this growth is based on the gradually
payments attending the maximum 100 % in the last year of project accomplishment and due to the
reduction of losses up to 5%, what will lead reduction fo the costs for heating agent paid by the
population. The recovery of this investment and the return of the credit will be finished in 10 years.

This option has an administrative impact, because heating system reform generates on households
level the decentralization of the manufacturing and the distribution of the heating agent and implies
the exclusion of the urban heating plants, the boiler houses being directly connected to the natural
gas and water pipelines network. The boiler houses will be administrated by the tenants who will be
helped by the townhall when they will negotiate their contracts with the fuel suppliers . The boiler
houses will represent the townhall property that will be conceded to a company for a period of, the
latter will obtain 80% from incomes (20% will be offered to the townhall), also the company will
have to return the credit. These actions will imply legislation adjustment.

The option doest have conformity costs, the tenants will even pay less for the invoices, due to the
exclusion of the network losses costs from the paid amount. The option will have an economic
impact on the supply companies with heating agent, because the service quality in the central
heating system will improve and the individual heating systems will not be bought as before. At the
same time the companies will expand their revenues by selling boilers for the new heating system.
In order to curb corruption cases it is necessary to ensure the transparency of boiler purchase process
and instalment. The option will have a significant social impact because each boiler house will have
a flexible schedule to supply the heating agent and to change the temperature, what will not cause
discontents among the population. The interruption of the heating plants work will point to 2500 the
number of unemployed [people. These workers could work for the system resumption and the
boilers administration. This option of policy will not have a big impact on the environment because
the boiler houses are supplied with new equipment.

There is the risk that the decentralization of the administrative power will not be sufficiently
absorbed by the associations, their boiler houses management abilities will be limited at the
primary phase of the system launch.

The reccomanded option

All the three option have advantages and disadvantages, and can be valued and pecuniary
appreciated or only presumed. The option 2 and 3 involves great financial resources investments, the
most of them will be lent, but the Option 1, although it doesnt imply big investments, cant be
recommended, because the situation will not favour somebody the final consumers are discontents
both with the services quality and their price, the suppliers dont have profits, the townhall and the
Government give money inefficiently expended. Through performance of the heating agent supply
system the followed goal is for these categories to enjoy the output, despite the fact this generates
additional costs.

If we compare the Options 1 and 2, we can conclude that the Option 2 is more expensive than the
Option 3 (with 468 billion lei) and produces a broad resumption of the heating network and doesnt
include management changes. The option 2 will contribute to the improvement of the services
quality, the reduction of the tenants debts and an increase of the budget revenues on account of
more tax incomes payments. The same results will have the Option 3. Also, the big change of the
system management manner through the decentralization of the administration power, the flexibility
in heating agent supply offer sustainability to this option. Furnishing heating energy to a narrow
number of persons will allow examination of all cases and will solve the borrowers issue. Not only
the cost of the Option 2 is biger than the cost of the Option 3 , but also the investments in the Option
2 will be retrieved later, because the incomes are smaller than in Option 3.

64

Concluding, the Option 1 is from the beginning excluded because it is not efficient, real and lasting.
Comparing the Options 2 and 3, we see that the Option 3 is the most efficient, real and lasting and it
is reccomended for implementation. But this will suppose to foresee prevention measures in order to
reduce the negatif impact left by this option. Re-employment possibilities for the people who loose
their work will be needed, help for the contracts conclusion with natural gas and water supply
companies, etc. It is also important that the townhall to support the associations to fulfill the new
goals and new system adjustment.

Plan of option implementation

This option will be realized over the 2009 to 2016 period and will include in it a number of stages.
Basic actions for this option realization are illustrated in logic framework provided below:

The target is to provide to population the heating services of high quality and at a reasonable price.

Final objective is rehabilitation of heating supply system in Chiinu municipality.

Specific object 1. reducing losses in heating systems from 25% in 2008 down to 5% in 2016.

Specific objective 2. assurance till 2016 of full payments for heating consumption by all apartment buildings connected
to the central network of heat supply.
Action Period of implementation Responsible institution Indices of monitorization
Stage 1. Preparing gound for intervention

Elaboration and approval of
legislation which would
enact the heating supply
system modification and its
management
2009 2010 Ministry of Economy and
Trade, Ministry of Territory
Development, Ministry of
Finances, Chiinu city hall
Legislation elaborated and
approved
Tender issue for
procurement of boilers,
pipes and other equipment
and for contracting of
construction firm
2010 Ministry of Economy and
Trade, ARMAPAU,
Chiinu city hall
Tender issued
Selection of equipment
suppliers and of
construction firm
Trade, ARMAPAU,
Chiinu city hall
Selected companies
Tender issue for selection
of company which will
accept to manage the
heating supply system in
concession terms
Trade, ARMAPAU,
Chiinu city hall
Tender issued
Selecting company which
will accept to manage the
heating supply system in
concession terms
Trade, ARMAPAU,
Chiinu city hall
Selected company
Pilotation of the system of
heating supply by boiler
plants for every quarter of
all six quaters of the
municipality
2010-2011 Ministry of Economy and
Trade, Ministry of
Construction and Territory
Development, Chiinu city
hall
Pilotation effectuated
Stage 1. Intervention implementation

Construction of boiler
plants in sectors Ciocana
and Riscani and installation
of connecting pipes
2011-2012 Ministry of Economy and
Trade, Ministry of
Constructed boiler plants

65
hall
Commissioning of boiler
plants in sectors Ciocana
amd Riscani
2013 Selected company,
Chiinu city hall
Operative boiler plants
plants in sectors Buiucani
and Sculeni and installation
of connecting pipes
2012-2013 The Ministry of Economy
and Trade, Ministry of
hall
plants in sectors Buiucani
and Sculeni and installation
of connecting pipes
Chiinu city hall
plants in sectors Centru and
Telecentru and installation
of connecting pipes
hall
plants in sectors Centru and
Telecentru and installation
of connecting pipes
Chiinu city hall
plants in sectors Botanica
and Posta Veche and
installation of connecting
pipes
hall
plants in sectors Botanica
and Posta Veche and
installation of connecting
pipes
Chiinu city hall

Summary of consultation process

The consultation process was extensive and included in it 8 basic categories of participants. The
summary of this process, including the participants points of view and final decision of public
authorities are presented in the table provided below.

Persons/institutions consulted Participants point of view Authoritys decision
Associations and inhabitants Agreed, with condition of
consolidation of management
capabilities
Consolidation of management
capabilities with central heating
starions staff
Consumer organizations Agreed, with condition of level up of
price on heating supply for population
The prices will not increase. These
could be even lower thanks to the
elimination of energy loss. The
authorities make commitments to
provide support to vulnerable
categories of population
Environmental organizations Agreed, with condition of use of high
performance technologies allowing to
minimize the environmental impact
Use of high performance technologies
S.A. Termocom and central heating
starions
Not agreed. The new system will not
be operative thanks to the absence of
managements capabilities. Do not
want to lose their work.
The authorities assure the
reemployment of discharged people in
implementation of new heating
system
Apa-Canal company Agreed. The option will not generate
significant debts to company, as
actually

- Agreed. Expect to be involved in all The authorities will assure the

66
stages of process implication of private sector to the
process of system rehabilitation and to
the management of this
Central public authorities Agreed. The Ministry of Finances is
exercised about the modality of credit
reimbursement by City Hall with
support of private company of
management
The city hall will remit to private
company the system of management
in terms of concession and the
reimbursement of debt during 20
years
Chiinu city hall Agreed.

Appendixes: Here should be included the results of every option fiscal impact evaluation of the detailed
analysis. Optionally here can be included the tables filled with suitable data synthesizing the evaluation
results of every stage, which are included at the end of sections of this guide.

67
Appendix II. Problem tree: The quality of public policy documens and of regulatory acts elaborated by CPA is not adequate

The quality of public policy documens
and of regulatory acts is not adequate
Public policies are not co-
related with financial
resources frimework
The staff has not
sufficient abilities
Limited financial
resources
Lack of fixed requirements and regulations for
decision-making process implementation and
public policies elaboration
The delegation of functions
is not adequate
Low-quality public
services
Lack of motivation system for
public officials
Understaffing
Public officials realize current goals rather
than an adequate strategic planning

Inefficient expense of
financial resources
Unsuccessful
implementation
Nonachievement of
anticipated objective
Public policy documents
and regulatory acts are not
interdependent
Elaboration of
corrective public
policies
Overload of public
officials with an excess
of reports
Strategic planning is not
realized
Dissatisfaction of
population
The ex-ante policy impact
evaluation is not realized
Deterioration of
Government reputation
Effects
Problem
Cause
CPA reform, fiscal and
administrative decentralization are
not implemented

68
Analysis of problem tree: The quality of public policy documens and of regulatory acts
elaborated by CPA is not adequate.

An indicator of efficiency of decision-making act within the Government constitutes the quality
of public policies elaborated, which are materialized in public policy documnts and regulatory
acts. Actually, for various reasons, the quality of public policy documents and regulatory acts is
not adequate, thus transforming the entire decision-making process in a vicious circle, where
the inefficient public policies generate other public policies, the lasts having similar deficient
formulation and direction. Such an activity of public administration could rather be considered
the ad hoc solution of problems, than a strategic planning. The analysis performed using the
problem tree approach allows the identification not only of a single problem, but also of
multiple reasons generated ant effects produced by this. For a start, it is important to determine
the causes of problem arising, because without identification of causes and realization of
rigorous actions for elimination of these, the respective problem will persist.

The basic reasons, which generate public policy documents and regulatory acts of inadequate
quality are of financial, functional and methodologic character. The slow progress of the reform
in central public administration, of administrative and fiscal decentralization does not allow the
establishment of an efficient public administration which would clearly delimitate the functions
and attributions of every authority. This leads inter alia to inadequate use of financial
resources, thus preventing the edification of a durable system of motivation for public officials.
The lack of such a system prevent the attraction of qualified specialists with suitable skills for
adequate implementation of decision-making process in general and of preliminary ex-ante
eveluation of public policies in particular. At the same time, the preliminary assessment of
public policies can not be performed adequately, particularly for reason of lack of a regulatory-
methodologocal framework which would establish the common transparent rules and
procedures wor the entire decision-making process.

As a concequence, in most cases the public policies ar multiple, declarative as content and
ineffective in essence. The generation of such a set of public policies within the public
administration contributes to the arising of a range of adverse effects. Above all things, the
inferior quality of public policies right from the start compromises the process of
implementation of public policy documents and regulatory acts, thus preventing the
achievement of fixed objectives and/or provision of public policies of high quality. In the first
instance there are required public policies destined to correct the failure of precedent policies,
but which will probably overload the decision-making process in general and the reporting
process in particular. These activities performed by public officials do not offer opportunity of
strategic planning. In the second instance, the inadequate quality of public services arises the
population dissatisfaction and, as a result, the deterioration of Government reputation. In both
cases the financial resources in any case limited are expended inefficiently, thus constraining
the next cycle of decision-making process.

Note: After this method application, the problem should be adjusted according to the
regulations fixed in section 2.1. Problem identification.

69
Appendix III. Objective tree: Elaboration of public policy documents and of regulatory acts is of adequate quality

The quality of public policy documens
and of regulatory acts is adequate
Public policies are co-related
with financial resources
framework
The staff posess
sufficient skills
More available financial
resources
Presence of fixed requirements and regulations
for decision-making process implementation
and public policies elaboration
The delegation of functions
is adequate
High-quality public
services
Presence of motivation system
for public officials
The staff is
sufficient
Public officials are concentrated on strategic
planning and do not dedicate the major part of
their tyme to current goals
Efficient expense of
financial resources
Successful implementation
Achievement of
anticipated objective
Regulatory acts derive
from public policy
documents
Elaboration of public
policies with ex-ante
impact assessment
Reduced number of
reports and their quality
increase by introduction
of ex-post impact
evaluation
Strategic planning is realized

Satisfaction of
population
The ex-ante policy impact
evaluation is realized

Government reputation
improvement
Target
Objective
Tools
CPA reform finalization, fiscal and
administrative decentralization

70
Analysis of objective tree: Elaboration of public policy documents and of regulatory
acts is of adequate quality.

The analysis of decision-making process performed by using the problem treeapproach,
allows the establishment of objectives by use of similar method named objective tree.
Thus the objective is formulated on the base of identified problem. In this context,
proceeding from the considered problem, the objective consists in elaboration of public
policz documents and regulatory acts of an adequate qualitz. At the same time, according to
this approach, the causes which have generated the considered problem should be
reformulated as means for established objective realization, and the effects produced will be
transformed in final goals.

In the context of facilities or actions oriented on achievement of established objective,
above all things is required an essential reorganization of central public authority, as well
as the administrative and fiscal decentralization. This will assure a clear delimitation of
functions of all public authorities involved into the decision-making process and into the
strategic planning. At the same time, the definitizing of the reform of public authority will
make possible the discharge of certain financial resource previously expensed inadequately.
These resources will be used for creation of an efficient system of public officials
motivation and for extending of capabilities of perfoming preliminary analysis of public
policies which often require significant financial resources. The existence of a durable
system of motivation will offer to certain qualified officials the ability to cover all the stages
of decision-making process much more efficiently. Also, for realization of the established
objective it is necessary to elaborate a regulatory-methodological framework which would
fix clear rules and procedures and provide to public officials the tools required for
implementation of entire decision-making process.

As concerns the goals followed in the aspect of realization of fixed objective, the
Government tries firstly to assure a successful implementation of established public
policies. A better quality of public policies is a precondition for successful process of
implementation, for which are proper the accomplishment of fixed objectives and/or
providing of public services of high quality. The accomplishment of the establishment
objectives is the final instance of decision-making cycle, after this starts another cycle,
which, on condition of adherence to specifications setup for the stage of public policy
elaboration will lead to a similar success by simplifying the reporting process and providing
the possibility to dedicate all time and resources to the process of strategic planning. The
provision of public services of high quality assure the satisfaction of population and leads to
the improvements of Government reputation. A successful implementation of public
policies does not assure an efficient use of financial resources, but instead generates funds,
which could be useful in the next cycle of decision-making process.

Note: After this method application, the objective should be adjusted according to the
regulations fixed in section 3.1. Objective setup.

71

Appendix IV. Public policies tools explanation
16

This appendix offers an overview of the public policies tools that the Government disposes,
which were mentioned in the chapter III. Point 4. Options identification. The four types of
tools are:
1. Information tools
2. Financial tools
3. Administrative tools
4. Regulatory tools

1. Information tools

Information campaigns are the most largely used alternatives for the traditional regulation in
the OECD countries (Organization for economic cooperation and development) (OECD 2002,
p. 54). These campaigns are used in order to redress the informational skewness and to allow
the consumers to make informed choices. While information campaigns have as a target only
to inform the citizens and to extend their consume area, some information campaigns have a
more explicit target to change the behavior. As a rule, this form of campaigns is used when
the behavior which is proposed to be changed has an important effect on the whole society, for
instance, the smoking and driving practices. There are many approaches to inform and to
educate, and namely:

Dissemination of information
The information can be offered to the individuals and to the firms hoping that these will
change their behavior in the wanted way. Usually the information has a general nature whose
role is to increase the population knowledge so that the last could make informed choices. The
information can be disseminated via mass-media by promoting documentary, television
program or by specialized institutions, for example, schools, which could elaborate a new
curriculum or to educate the children in certain aspects. Nowadays the practices to educate the
citizens about the environment problems are very widespread, being, as well, cultivated
habitudes at the preschool age children how to separate recycling waste. Scientific fairs,
exhibitions and museums are also used in the information dissemination.

Information campaigns
The information can be offered by a more concentrated and conjugated effort to change human
preferences and actions, and not only by their simple information about the situation.
Information campaigns examples include publicity which calls the people to lead a healthy
life, information campaigns concerning the problems with regard to the family violence, or the
advertising spot on the TV about malefic effects of the dopes. Because the information, as a
rule, is not efficient in the absence of other actions, this type of tool is usually auxiliar or it
represents the engine for other tools. For instance, the protreptic against the violence on the
women, in absence of other punishment tools for the trespassers, can have a slow effect.

Quality evaluation
This tool consists of the publishing of the lists in which the products and services are arranged
those that have the highest quality are rewarded. The general information with regard to the
products which are characterized by important aspects can be prepared, as the innocuity,

16
Aceast component este inspirat din Instrumente de Politic (Staroov 2002). A se vedea de asemenea
Ameliorarea Instrumentelor de Politic prin Evaluarea Impactului (SIGMA 2001) i Control prin reglementare.
Lista de puncte pentru legislatori (Oficiul Cabinetului Suedez, 1995).

72
design, quality and price. Organizations, as schools or hospitals can offer to their services
consumers evaluating lists which contain comparative information concerning the accorded
services performance. This information helps citizens to make informed choices.

Table 1: Information tools evaluation
Advantages Disadvantages
These tools represent a good bases for a
Government which takes up problems for
which there do not exist sure solutions
Easy to establish
If a better tool is found, the public
persuasive policy can be changed or left
without too much difficulty
Dose not involve financial and stuff
considerable costs (insignificant financial
commitment)
Compatible with the democratic values
and arguments (for instance, individual
responsibility, freedom)
These tools are inefficient if immediate
results are expected, as in the case of a
crisis situation
In the absence of positive or negative
situations, the majority of persuasive efforts
have a small success probability or a
relatively short lifetime
It is better to use in combination with
other tools

2. Financial tools

Financial tools include charges, taxes, subsidies and budgetary allocations. From economic
perspective, this market stimulus can be cost-effective; they can encourage the innovation and
to attract players in a sector or other. Ill successful direction could lead to opposite effects. The
typical market mechanisms which are the part of economic tools are:

Grants/subsidies
These represent financial transfer forms to individuals and legal bodies. The target of the
transfer is to offer a reward for the desired activity, so as carrying out or consumption of a
good or service. The subsidy or the grant has the role to influence individuals or legal bodies
decisions. While the choice depends on the individuals and firms, the probability that the
desired choice will be maid increases at the same time with the growth of the offered subsidy.
Grants and subsidies examples include budget funds given to schools and for extra-curricular
activities, for researches activities in universities, theatres, public transport, as well as for
researches and development.

Insurance arrangements
Insurance arrangements certificates represent documents with monetary value offered by the
state to the consumers of a certain good or service. Further the consumers can use them to
acquire goods or services from the favorite provider which, in turn, presents to the state the
insurance arrangement for the redemption. The insurance arrangements, as the grants, have the
role to increase the consumption of goods and services that the state wants. But opposite to the
grants, which are given to the producers and restrict the consumers choice, the insurance
arrangements system subsidize the consumers and allows them to make a relatively free choice
on the market. This system promotes the competition among the providers, which in
disputable way increase the products and services quality and reduces the state costs.

Taxes
Taxes are compulsory payments for state done by an individual or legal body. As a rule, the
main target of taxes is to increase the revenues used to finance the direct expenses of the state.
Taxes also can be used as public policy tool in order to impose a desired behavior or in order

73
to discourage another undesired behavior. For example, taxing goods, services, or activities,
the state discourages indirectly their consumption or the achievement of one activity (for
instance, the alcohol consumption, tobacco or lucky games). Taxes can be also applied as
positive stimulus, for instance, deductions from the taxing revenue, sparing, preferential
quotas, etc. Thus stimulus by taxing can encourage some kinds of behavior. For instance, legal
bodies which intend to modernize the producing process or to instruct the stuff can be
convinced to action if fiscal stimuli are applied. Fiscal expenses do not involve direct expenses
and thus there do not exist coercions concerning means availability to satisfy this target, but
the fiscal expenses use impedes people to do other expenses which can be more important or
useful. Fiscal expenses are easy to administrate and to apply because there is no need for
special bureaucratic procedures.

Users taxes and commissions
Users taxes represent a combination between financial and regulatory tools. The regulatory
aspect consists of the establishment by the state of a tax (commission) for an activity without
forbidding or limiting it, depending on individuals or legal bodies to decide what activity
volume to perform. Supplementary costs will determine individuals or legal bodies to analyze
their costs and benefits in order to decide if the respective activity must be totally interrupted
or at a level where the benefits overstay the costs. The efforts to reduce costs can encourage
the seeking of other alternatives (less expensive) which will limit the activity for which the tax
is collected. For instance, to reduce traffic jams in the city center, commuters must pay a tax
to enter the center zone during the peak-hour. This makes peoples to compare costs to enter
the zone with their own vehicles with the costs of using the public transport for which the
respective tax is not perceived. Another frequently used example is the pollution tax, named
also tax for release of wastes. If a tax for release of wastes is imposed, the contaminant will
reduce continuously the pollution level until the point where to reduce pollution become
cheaper than simply to pay the tax for release of wastes. Thus, the contaminant will seek in
permanence ways to minimize the tax that he is paying, by reducing the pollution level that he
produces.

Table 2: Financial tools assesment
They are flexible tools in the sense of
administration
Administration and application costs are
reduced Encourage the innovation allowing
individuals or legal bodies to have a
suitable reaction
More acceptable from the political point
of view, because the benefits are
concentrated on some categories, and costs
and results reverberate on the whole
population
Easier to establish if a harmony exists
between what the state wants people to do
and what want the lasts
The establishment is usually difficult
because it needs financing from the new or
existing sources of revenues (except the
fiscal stimulus)
Costs of gathering the information
concerning the subsidies amount which will
be necessary to obtain a desired behavior
can be great
From the part of providers a distinct
behavior could exist (for instance, if a firm
is waiting a subsiding program to be
implemented, it could temporarily change
its behavior in order to get greater
subsidies)
Because these mechanisms function
indirectly, a period of time exists until the
effects are tangible
They can be superfluous in cases when
the activity could be performed even
without subsiding

74
They are difficult to eliminate because
of the opposition from the part of existent
beneficiaries who remain in damage in the
case of those mechanisms elimination
The fiscal stimulus will impede other
public expenses

3. Administrative tools
Administrative tools are used by the state in order to direct the function of organizations which
carry out services, including non-governmental organization and the private sector. Often, in
order to perform certain public policy objectives, the activity of organizations which carry out
services is financed from public funds. The program directing lines establish parameters or
requirements for the goods or services which will be carried out by these agencies or
organizations, preserving, at the same time, a certain degree of local independence and
flexibility. Thus, the choice between the public or private carrying out of goods or services has
two basic dimensions. The first dimension consists of financing. Should citizens pay for a
good or service individually, from their own funds, or collectively, from funds collected by
taxing? The second dimension consists of performance. Should be a good produced or a
service carried out by a state organization or a non-governmental organization, or by the
private sector? In many existent or potential public activity fields choices concerning the
alternatives of financing and performance are to be done. The main administrative tools are:

Carrying out directly by the state
Typical examples of direct carrying out of goods and services by the state are the national
defense, diplomatic relations, police, anti-inflammatory activities, social insurance, education,
environment preservation and ways keeping. Some services are carried out directly by local
authorities who get transfers from the central authority. These transfers need rules and
regulations which concretize their adequate distribution in the society by indicating the level
and the standards of services which are to be carried out.

The contraction from the exterior
The contraction from the exterior can be divided in many categories, and namely the goods
and services contraction from the firms of the private sector and services contraction which are
offered by the non-profit organizations. In the range of public services often carried out by the
firms from the private sector in the case of governmental contracts the evacuation of wastes is
included. The non-profit organizations, on the other hand, offers as a rule health services,
education and other social and human services. On a larger scale, the governments collect
services carried out by commercial firms and services carried out for clients by the non-profit
organizations. The arguments in favor of these tendencies are the efficiency growth and the
limitation of the opportunistic behavior. At the same time, to asses the products quality offered
by the contractors, the Government must to dispose of monitoring and final assessment
procedures.

The family and the community
In all societies the satisfaction of family members and parents requirements is regarded as an
individuals essential responsibility. So, in all societies parents, friends and neighbors offer
many goods and services and the Government could take measures concerning their role
extension in the way that fills its target. This can be done by promoting their implication.
Many governments choose as option the grants or subsidies giving for these efforts (even
without calculating these services non-monetary value), for instance, the children, old and ill
persons care.

75

Voluntary organizations
Contemporaneous states collaborate with the voluntary sector or public organizations, as
preferred mechanism to carry out public services in many fields. Voluntary organizations can
personalize the services carrying out, can function on the smaller scale than bureaucratic state
organizations, can reduce the dimension of necessary public institutions and can adapt the care
services to the clients requirements and not to the state agencies structurization, but also can
allow the competitiveness among those who carry out services. More mechanisms allow the
Government to assist public organizations. These include direct financial support (the
Government creates public organizations), indirect subsidies by local authorities (grants given
to local authorities, and these must decide if they will carry out the subsidized services, or if
they will contract public or private organizations), or via individuals (insurance arrangements
type mechanisms).

Table 3: Administrative tools assesment
Direct carrying
out by the
Government
Easy to establish because
informational requirements are
reduced
The agencies dimension allow
resources formation, habituations
and information
Avoids the problem with the
indirect carrying out, as
negotiations, discussions and
greater information requirement
Efficient tool in situations when
a needed social good or service is
not produced by the private sector.
Inflexibility (inevitable if the law supremacy will be
respected)
Political control on the agencies and officials
promote the political intrusion in order to strengthen
the Government for its re-election and not for serving
public interests (an extreme case can be the failure to
carrying out the service/product as the result of political
power changing)
Contradictory pressures can lead to incoherent
directives
Cost-inefficient, resulting in long retards, resources
wasting (are not under the competitiveness)
Programs implementation can bear because of a)
conflicts between and inside the agencies b) difficulties
in general rules application in specific situations
Contraction
from the
exterior
Easy to establish and control
Efficient and responsible
It is possible to control the
opportunistic behavior
Difficult in the case of some more complex situations
It can be difficult for the Government to stimulate the
creation in the cases when non-profit organizations do
not already exist
Public
organizations
Flexibility in the range of
carried out services (important in
cases when service beneficiaries
have heterogeneous preferences)
Reservoir of innovative or
unpopular ideas and actions as the
agent of social and political
changing
Fast reaction
Equitable tool (directed only
towards those who need)
Promotes community spirit and
the citizens participation
Cost-efficiency (reduced
administration and a certain degree
of competitiveness)
Allows voluntary contributions
It is not feasible for ample activities (for instance,
education field services)
Limited resources
Low probability to function out of the specified field
The third sector is financially dependent on the
private resources or public funds
Services superposition or serious lacunas can appear

Family/
Community
Cost-efficiency
Reliable (emotional assumption,
insurance)
Agreement with cultural norms
Support for the family and
Insufficiently prepared for taking up complex
economical problems
Inequitable for those who insure the care (emotional
impulse)
Inequitable for those who have no one

76
relations in the community
Large political support for this
type tools

3. Regulatory tools

The regulatory tools include legal framework, which is often used for problems solution. Most
commonly the legislation concerns the regulatory and legal acts which regard the market rules
study and application, of individual rights, penal justice, administrative procedures, role of
municipalities, NGOs and other organizations, etc.

Traditional prescriptive legilation
The traditional reglementations make part of operational administrative system, by means of
which is instituted the regulatory framework materialized by regulatory and legal acts in
combination with administrative apprication. The regulations are generally applied by means
of directives, of which observation is monitored, and the nonobservance puniched. It means,
that the regulations can by very expensive thanks to the required monitoring of their
observation. The incorporation of obligatory standards in legislation (regulations, laws or
decisions) is a frequently used public policy solution.

EU framework directives
A lot of EU directives are comon by their nature and include objectives, periods of validity
and essential aspects of legislation, whether the technical and detailed formalities are measures
of execution or given over to member-states in course of harmonization of their legislation
with the legislation of EU.

Self-Reglementation
In many countries such professions as lawers, doctors and teachers are self-regulative.
Frequently the standards proper to certain industries which significantly influence the public
interests such as advertising, mass-media or cinematography industry are self-regulative,
i.e. created by the industry itself. Such a consideration can be very suitable in case when an
external body with regulative role disposes of expertise is lacking by the state. The rules are
observed easily if these are created by the persons from the sectors of destination; furthermore,
these can be rapidly updated. Although, the state could be not able to controle the observation
of regulations and should action carefully to assure in the first instance the observation of
public interests after which of those private (for example, the self-reglemetnation can be used
by persons involved in the fields for creation of barriers for market penetration, or persons
could protect the interests of their members and not public interests). Thus, if the self-
reglementation practice is not sufficiently effective, the state could examine the variant of
legal act proposal.

Regulations on the base of performance
The Regulations on the base of performance implie the specification of results or anticipated
objectives rather than specification of mechanisms for their realization. The performance
could be imposed by means of self-reglementation. Thus, the degree of state intervention is
reduced. The firms and indifiduals can chose themselves the modality of law observation. The
regulation is concentrated on the results or products rather than on the resources.

77

Table 4: Evaluation of regulatory tools
Advantages Disavantages
Change the population behavior
Assure the correctness by treating the
similitudes in the same way
A higher anticipation for citizens meaning the
supremacy of law
Eliminate the arbitrary behavior of oficials
Data required for the institution of
regulations are not complete because the
Government should not know in advance the
subject preferencies
Efficient in cases when certain activities are
absolutely undesirable (for example child
pornography)
The administration should not comply with
incertitudes
Attractive public policies when the public
expects to see a rapid and confident action of the
Government
Do not change values and attitudes of
population
Do not assure the correctness because the
regulations do not allow the receptivity to
contextual and individual differencies
Nonflexible and do not allow the examination
of individual circumstances, consequently
generating the unintended regulatory decisions and
results (perversive stimulants)
Could distort the voluntary activities or
activities in private sector and could promote
economic inefficiencies
Could inhibit the innovation or technological
advance because of limited opportunities of
experimentation
As concerns the administration, it is
impossible to institute regulations for all undesired
activities
The applicable costs could be higher (charges
for information, investigation and criminal
prosecution)
The costs of negative effects could be high
(for example, high taxes on smokables could
generate the contraband and other forms of fiscal
evasion)

78
Appendix V. Evaluation and eligibility criteria of public policy Proposal

(These criteria are used by subdivisions for public policies analysis, monitoring and evaluation of central
public authorities and by the Bureau for policies coordination and external assistance of Gorernment in
evaluation of quality of public policy Proposals elaborated by relevant subdivisiona/authorities).

Name of public policy Proposal

Institution which has elaborated the public policy
Proposal

Date of presentation of public policy Proposal

Subdivision which has evaluated the public policy
Proposal

Date of evaluation of public policy Proposal

Criteria Points Comments
1. Problem identification
The problem is clearly-worded
The program is actual
The problem is confounded with its causes and effects
2. Objective setup
The objective is SMART
The objective is not confounded with target
The objective is co-related with national priorities stipulated in basic
strategic documents

Have there been identified the beneficiaries and categories affected by the
policy

3. Identification of the options of problem solution
There are three or more formulated options
There is included a status quo option
The options are realistic and feasible
The tools of options implementation have been considered
4. Options analysis
The options are realized in the aspect of all five types of impact generation
The risks and incertitudes have been analysed
The relevance, efficiency, effectiveness and durability of options have been
estimated

The analysis is consistent and reasoned
The analysis contains both quantitative and qualitative data
5. Comparison of options and selection of recommended option
There have been used the same criteria of options comparison
The recommended option is optimal
6. Implementation Plan Formulation
The actions on the prevention, minimization or counteraction to negative
impacts of policy have been formulated

The indicators of monitoring and determination of institutions responsible
for implementation have been setup

The period of actions execution has been fixed
7. Consultation
The interested parties, experts and/or large public have been consulted
The points of view expressed by the consulted parties have been taken into
account

79
The summary of consultations including the participants poins of vew is
presented

The reasoning was offered to interested parties in case when their proposal
has not been accepted

8. Presentation of information
The information presented is consistent and reasonable
The formate proposed for formulation of public policy Proposal has been
respected

There are references to information sources
The conclusions are drawn from the performed analysis
The technical data are combined with non-technical information
The technical terms, acronyms and abbreviations are defined
The analysis is objective one and does not promote a particular point of
view. The adverse impacts are not disguised of underappreciated

The stages and principles proposed in Methodological guide for public
policy elaboration have been respected

There are indicated the difficulties and information gaps faced by the
authorities in the process of analysis

Score < 90 >
Final decision Accepted/ Rejected

The score of all 36 components of evaluation should be established on a 0-5 scale. The highest score
will indicate the correspondence of analysis contained in public policy proposal to the regulations
established in Methodological guide on public policies elaboration. The points assigned have the
following signification:

5 = The basic aspects have been covered, no one of important aspects did not remain uncovered

4 = Generally satisfactory and complete, implying minor omissions and unconformities

3 = Can be considered satisfactory despite certain omissions and/or unconformities

2 = Certain aspects are relatively good, bu taken all round is considered unsatisfactory because of
omissions and unconformities

1 = Is not satisfactory, implies significant omission and unconformities

0 = Very unsatisfactory, the important aspects have been realized inadequately of omitted

If total score representing the amount of points by every criterion of evaluation is under 90 points, the
public policy Proposal should not be accepted and will be returned to subdivision/institution for revision
and completion.

80

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