2 Approaches to the Study of

Public Policy
Avinash Samal

Introduction
Policy sciences have a long history and a short past (DeLeon 1994). In other
words, while the governments actions have been the subject of a wide range of
critiques, the systematic analysis of government actions as a policy science in
the past few decades is relatively recent. This chapter outlines the main
approaches to the study of public policy in disciplines such as economics and
political science, which are most directly concerned with state behaviour, points
out their strengths and weaknesses; and finally discusses how policy science has
benefited from the contributions of the social sciences in developing its own
distinctive methodologies and theories.

Levels, Methods and Units of Analysis

Social scientific theories are several and vary according to the kind of social
phenomenon they try to explain, and the methods they use to arrive at their
premises and hypotheses. In particular, their differences can be seen at the
level of analysis; the method of analysis, and the unit of analysis used. In social
scientific theories the level of analysis can vary from the macro or general to the
micro or meso, where the latter focuses on fewer but more specific dimensions
of social life.

Similarly, social theories can either use deductive or inductive methods of

analysis. Deductive theories apply general premises and concepts to specific
phenomena, whereas inductive theories develop general conclusions through
careful observation of empirical phenomena, and by testing their findings
against other cases.

Finally, social theories use different units of analyses with some focusing
on the individual as the basic social actor, others on collective individuals or
groups, and still others consider social structures which influence individual and
collective behaviour (Hay and Wincott 1998, Clark 1998, Tilly 1984).

To cover every combination within these three variations, and provide

representative examples of each theory relevant to policy would be a highly
complex if not a never-ending task. A simpler approach would be to discuss
social theories at the general or macro-level. The remaining sections of this
chapter will focus on the more prevalent and frequently applied categories of
social theory and how they help us understand and approach the study of public
policy.

Table 2.1
General Approaches to the study of political phenomenon and
illustrative theoretical examples

Unit of Deductive Inductive

analysis
Individua Rational Choice Theories (Public Sociological Individualism
l Choice) (Welfare Economics)
Group theories
Collectivi Class analysis (Marxism) (Pluralism/ Corporatism)
ty
Actor-centered Institutionalism Socio-Historical Neo-
Structur (Transaction cost analysis) Institutionalism
e (Statism)
Source: Howlett and Ramesh (2003)

Deductive Theories
In deductive theories, each step of reasoning must demonstrate the truth, i.e. if
something is known to be true in general, then specific examples of it must also
be true. So if the premises are true the conclusion will also be true. Several
social science theories adhere to deductive approaches. For the purposes of
understanding public policy making, there are three distinct approaches in this
category: Rational Choice theory, Class Analysis and Actor-centered Neo-
institutionalism. And the corresponding representative examples of each theory
discussed below are: Public Choice, Marxism and Transaction-cost Analysis.

Rational Choice Theory generally applies the principles of neo-classical

economics to political behaviour. The main assumption of this theory purports
that political and economic actors calculate actions to maximize their utility or
self-interests, and thereby act rationally. The unit of analysis here is the
individual, whose behaviour is motivated by self-interest.

Public choice is a variant of rational choice theory. It was named after

the Institute for the study of Public Choice at Virginia Poly Technic (now George
Mason University) where it was first conceptualized by its founding fathers
Gordon Tullock and James Buchanan. Public choice theory can be understood as
a more concentrated version of rational choice. Although the usefulness and
merit of its basic tenets are disputable, public choice theory is frequently used
in policy analyses because it is considered to provide clear and consistent policy
prescriptions, generated by the deductive application of its general principles.

According to Buchanan (1975, 1980), In one sense, all public choice or

the economic theory of politics may be summarized as the discovering or re-
discovering that people should be treated as rational utility maximizers, in all
of their behavioural capacities. The Public Choice approach is predicated on
the axiom that individual political actors (voters or politicians) are motivated by
their own self-interest in choosing a course of action to their best advantage.
This basic hypothesis about human behaviour then extends itself to a complex
series of related hypotheses to explain various aspects of public-policy making.
For example, this approach has been applied to studies of voting behaviour
(Downs 1957), the relationship between political and economic systems (Becker
1958), the nature of individual and collective decision-making behaviour,
structure of government institutions, including bureaucracies (Coase 1960),
political parties (Rikers 1962), and constitutions (Buchanan 1975).

If we were to analyze the political arena based on this premise of

individual self-interest in a manner similar to these aforementioned studies, it is
possible to identify a distinct tendency motivating public policy and its making.
Elections become an arena for competing politicians to serve personal interests
in terms of status, income and power gained by being voted into office and so
the policy packages politicians and political parties offer are designed to attract
voters. Furthermore, the self-interest of intermediary actors such as
bureaucrats leads them to enhance their budgets to the maximum as grandiose
budgets are in themselves a source of prestige, higher incomes, and other
associated benefits. The subsequent monopoly they enjoy and the lack of
competition for the most part enables these political actors to realize their self-
interest, who continue doing so because citizens and elected officials lack the
know-how and expertise to monitor such activities. In other words, public
choice theorists see public-policy making as one in which several political actors
use the state to capture a portion of the social surplus resulting from the
productive actions of others at little or no cost to themselves (Buchanan 1980).

The logic of this sequence suggests that if self-interest is the driving force
for voters, parties, and politicians in the policy process, then voters will
constantly seek more programmes from government, constrained only by their
willingness to pay taxes, and that politicians, parties and bureaucrats will be
willing to supply the programmes because of their own self-interest in power,
prestige and popularity (Howlett and Ramesh 2003:23). This can be seen in
democratic governments such as India, where perpetual electoral campaigns
affect the decision making process correspondingly i.e., popular decisions
dispensing benefits are announced before elections, whereas unpopular ones
are conveyed later (e.g. SOPs announced by the NDA government during the
India Shining campaign) The result is increasing state intervention in the
economy and society, portraying public policy as no more than state provision of
goods and services for the public.

However, public choice theorists do not favour this outlook, contending

that it distorts the natural process of market-based societies and encourages
free-riders and other forms of rent-seeking behaviour. Instead, they advocate
the development of institutions to restrict such utility maximizing behaviour,
which serves the interests of a few but, has adverse affects on society at large.
Because people tend to act in their own self-interest and maximize their own
utilities, public choice theorists call for the development of institutions which
are designed to channel such individualist behaviour towards a common good,
i.e. the interests of the group. Thus they do not consider all government actions
to be undesirable, but instead argue that government intervention should be
limited to implementing and creating property rights where these are
inadequate or non-existent in order to facilitate the operation and management
of market forces in a manner that benefits all. In short, the government should
intervene only to supplement the market -stepping in where the market cannot,
in a manner that benefits society at large.

Criticisms
Despite the simplicity and elegance of its logic, public choice theory has been
criticized on several aspects.

First, the premise of the theory relies on a far too simplistic and
unrealistic conception of human behaviour. By writing off political
activities as utility-maximizing behaviour, public choice theory disregards
the ritualistic and symbolic reasons behind several political activities (for
e.g. hoisting the Indian flag on Independence Day, or inaugurating a polio
vaccination camp), and thereby underestimates the complexity of political
behaviour.
 Such over-simplification has also led to the poor predictive power of the
theory. No empirical evidence shows that government functions and
involvement will grow in proportion with the demanding nature of the
democratic system of representation. In fact the opposite is true in most
industrialized countries where government expenditure has either been
trimmed or not grown in recent year.

A third criticism of public choice theory is its reliance on U. S. centric

experiences, i.e. in terms of partisan patterns of electoral competition
between two parties, for instance, when in reality most countries are
multi-party democracies, and legislative coalition-building is almost
unavoidable.

Fourth, while public choice claims to be value-free, the theory is accused

of being explicitly normative. It postulates that only social interactions in
market-based exchanges produce wealth, and demotes the states role to
that of a parasite extracting social surplus. Thus it undervalues and
ignores the important role of the state not only in securing the basis for
economic activity in property rights and defence, but also in organizing
key economic activities like education and technological innovation (Dosi
et al 1988). Critics have further suggested that public choice theory in
fact resembles the vision of orthodox liberalism or neo-conservatism,
which promote markets aggressively and constrain government severely,
wherever possible without considering its practical (and negative)
consequences (Hood, 1991, 1995, 1998).

Finally, public choice theory has nothing to say about public policy making
in countries which have non-democratic systems of governance and do not
rely on free elections, a central premise of the theory. Thus, it can also be
said that public choice theory is institutionally constrained as it pays little
attention to the effects of institutions on shaping actors preferences. To
be fair, public choice theorists do promote the development of institutions,
but they think that actors can change institutions according to their
preferences, and hence they do not recognize the durability and
pervasiveness of institutions.

The dawning gap between their deductive reasoning and empirical reality
has been recognized by public choice theorists too. This realization of its limits
has led many former adherents of Public Choice to embrace a more subtle
approach to deductive methodology actor-centered institutionalism, which will
be discussed in a later section.

Class Analysis
Class theories are similar to group theories as they give precedence to collective
entities in their analyses. However, they differ from their inductive counterparts
as class theories are explicitly deductive. In other words, class theories assign
group membership based on certain observable traits of individuals such as
those resulting in behaviour that maximizes group interest, whether or not the
individuals involved see themselves in those terms.

Class can be understood as groups differentiated in various ways within

a more inclusive category, such as the category of social groups with common
economic interests, or the category of groups whose members share economic
conditions which are identical in a certain respect (Howlett and Ramesh 2003).

Marxist Social Theory

The Marxist stream in class analyses is by far the best known and most
theoretically developed, given its great influence on the growth of European
socialism in the 19th and 20th centuries. Marxist class theory views public policy
in capitalist societies as an expression of capitalist class interests. Their
dominance in the economy enables the capitalists to treat the state as an
instrument to maintain the capitalist system and increase profits or surplus
value at the expense of labour. In 2004, the incumbent government was heavily
criticized for its pro-rich policies enshrined in its India Shining propaganda by
the Left and the Congress, who later overthrew the NDA.

Criticisms
The instrumentalist line of analysis has limitations and required Marxists to
revise their analysis on the basis of the following:

It was not possible to prove that policies directly translated the will of
capitalists as it was almost impossible to show that capitalists issued
instructions which were faithfully followed by the state. That is, some
policies can be at conflict with capitalist interests such as the Keynesian
policies in 60s and 70s which met great opposition from entrenched
business interests.

The instrumentalist view that the basic structure of the state, law and
ideology is shaped by the means of production was also challenged. In
fact, others argued that the state did play an important role in organizing
the economy and shaping the mode of production (Cox 1987). Policies
can also be a result of ideological factors influencing state behaviour such
as the call for Swadeshi - computer chips not potato chips in the 1990s
when India returned to selective liberalization.

Thus in the 1960s and 70s, Structural Marxists reoriented class analysis
by focusing attention on the importance of institutional or structural factors to
explain state behaviour. Poulantzas (1973) argued that the states relative
autonomy, a result of conflicting fractions of capital, and a bureaucracy run by
members of non-capitalist classes, enabled it to adopt policies favorable to sub-
ordinate classes, wherever politically unavoidable. Even though these measures
may be at conflict with short term interests of capital, they were followed to
promote the long term interests of capital, i.e. essential functions such as
enforcing property rights, maintaining peace and order, and promoting
conditions that favor continued accumulation of profits as these are necessary
for the structure of capital to survive (Poluantzas 1973, Althusser and Balibar
1977). Hence, even though the rise of the welfare state in capitalist
governments is the result of pressures exerted by the working classes, it is
designed to maintain the fundamental property rights or profits characteristic of
the capitalist system.

Actor-Centered Institutionalism: Transaction Cost Analysis

The Actor-Centered Intuitionalism (ACI) approach responds to concerns of the
limited explanatory powers of deductive theories based on individual and
groups. It focuses on why political, economic and social institutions like
governments, corporations, religious centers exist at all, and the extent to which
they enhance or limit the emergence and interaction of individual actors and
groups in the policy making process.

Similar to Structural Marxism, ACI highlights the autonomy of political

institutions from the society in which they exist, but also postulates the notion of
calculating human behaviour and to this extent shares some common ground
with Public Choice too. However, ACI is distinctly different by taking into
account that:

rules, norms and symbols affect political behaviour;

how government institutions are organized also affects what the state
does
specific development of historical circumstances can set limits to future
choices

Hence, institutions do not simply mean formal organizations such as

bureaucratic hierarchies, and the market, but include legal and cultural codes
which influence individuals and groups to calculate actions advantageous to
them (Ostrom, 1999). The assumptions of this approach focus on the effects of
structure on social actors, and the interdependence between relatively
autonomous social and political institutions instead of the dependence of polity
on society.

Transaction Cost Analysis (TCA) is a variant of this approach. Its basic

unit of analysis is determined by the transaction between individuals/groups
within an institutional framework. TCA argues that institutions play a crucial
role in political life, and they exist in order to overcome the obstacles which
hinder the process of perfect exchange in society. This approach too has a
distinct emphasis on market-based forms of government action and activity, but
for different reasons from Public Choice.

Transaction costs may be incurred in the search for information, quality

and availability of goods and services, monitoring contract enforcement and the
collection of damages for violations, protection of property rights etc. Based on
their design, institutions can either increase or lower the costs of transactions.

For example, governments can create a favorable environment for

business by effectively minimizing transaction costs, as summarized in the
following table.

Table 2.2
Transaction Cost Analysis

Reduce transaction Increase transaction

costs costs
General government effective and regulations
activities efficient legal permit
system requirements
good and efficient red tape
infrastructure incompetence and
efficient, high- inefficiency
quality education corruption
and health system
Government investment tax incentives cost of application
promotion activities real estate long decision
development period on
skills development application
preferential credit lack of
transparency on
decision criteria

TCA also recognizes that institutions are themselves the products of

instrumentally oriented human design (Powell and DiMaggio 1991). In the
social realm institutions do not cause actions, but affect them by shaping the
interpretation of problems and possible solutions by constraining choices for
individuals, groups and institutions that also have specific interests.

Institutions are significant in the political realm too. They define

consistent behavioural rules, conceptions of reality, standards of assessment,
and affective ties and provide individual and collective actors with legitimacy; or
what has been called, a capacity for purposive action (March and Olsen 1994).

In TCA, two kinds of social organizations are considered the most

effective in reducing transaction costs markets and bureaucracies.

Markets: multiple producers and consumers share the burden of

information dissemination and other goods and services. Thus costs are
externalized.
Bureaucracy: These costs are internalized as seen in large corporations
which are organized on the basis of a defined hierarchy.

Their highly institutionalized (rule-bound) nature means that both

organizations lower uncertainty and risk as individual freedom of action is
limited and therefore highly predictable. This makes way for trustful
relationships, strategic alliances, long-term contracts etc. Thus, TCA suggests
the most effective arrangement for government is to externalize costs on
citizens by enhancing market-based activities. This will make citizens realize
the true price of government services and act rationally in terms of their
consumption, spending and investment decisions. Thus the government is
expected to execute appropriate institutional behaviour, that is:

It should not intervene in transactions involving private goods and

services.
It should enforce basic property rights and prevent criminal behaviours
(theft, pollution etc) which undermine transactions.
It should not charge all taxpayers for toll goods e.g. costs of constructing
and maintaining roads and bridges, and instead target users.
In the case of common pool goods, it should establish property regimes
through licensing to prevent depletion (e.g. auctioning fishing quotas; oil
cartels)

The objective of public policy, according to TCA is to enhance the

efficiency and productivity of enterprises by providing an enabling environment.
The industrial districts of Italy are a microcosmic example of how transaction
costs can be reduced where the business community is organized in a network,
which includes local governments, technical schools, research institutions and
other organizations. Such a structural arrangement was instrumental in
facilitating interactions and increasing benefits to the local area. Other
examples of TCA application can be seen in areas such as the negotiation of
international treaties; operation of multi-level systems of government and issues
of regulatory enforcement where decisions of individual policy actors are
developed as a result of multiple frameworks occurring within the limitations,
costs, and trade-offs entrenched in the structure of institutions.

Thus, this approach offers useful insights about appropriate and

inappropriate behaviours within the framework of institutions.

Criticisms
Although it overcomes many of the problems that Public Choice and
Marxist analysis encountered by acknowledging the role of institutions in
molding individual preferences and choices related to policy-making
behaviour, it is limited and vague in its analytical strength of the history
and evolution of policy making activities.

The main criticism of the TCA is its inability to explain how institutions
and or rules are created in the first place, and once in place what causes
them to change in a particular direction.

As it draws on a wide range of international and domestic norms, rules

and behaviour that result in creation and perception of transaction costs,
the application of TCA seems eclectic leaving it to specific investigations
to determine the significance of specific variables on policy outcomes in
specific circumstances, which in fact departs from its intended deductive
nature.

Thus, while ACI focuses on the structural limits policy actors must face
while acting rationally, in specific circumstances, it is silent about how
these limits are created and developed.

Inductive Theories
In contrast to their deductive counterparts, inductive theories are constructed
from the bottom-up, i.e. from the particular to the general. These theories
extract generalizations from multiple empirical studies of any phenomenon. By
definition, inductive theories are always under construction and hence do not
offer a complete or integrated set of theoretical propositions that can be applied
to any case. The next sections discuss three inductive social theories which
attempt to explain the political world and policy-making.

Sociological Individualism: Welfare Economics

As its name suggests, this approach is also based on the individual.
Individualism recognizes that society exists for the benefit of the individual who
must not be constrained by government interventions or made subordinate to
collective interests. It argues that social, economic and other societal
phenomena can be adequately expressed only in terms of the individuals
actions. However, sociological individualism does not subscribe to simplistic
psychological maxims of individual self-interest maximization like we saw in
public choice theory. Welfare economics illustrates this clearly.

Welfare economics is considered to be the most widely used approach

for the study of public policy to the extent that some argue policy analysis is
really just welfare economics rephrased (Howlett and Ramesh 2003). The theory
argues that individuals should be expected to make most social decisions
through the functioning of the market. However, it also recognizes that markets
can fail to distribute resources efficiently, i.e. that it cannot always convert every
individuals utility maximizing behaviour in society to optimize overall social
welfare.

Instances of Market Failures

Natural monopoly among industries with large capital requirements and
disproportionate returns to scale tends to promote a single firm over its
competitors. Especially seen in telecommunication, electricity and railways
where the first company to establish the necessary infrastructure, if
unregulated, monopolizes the market. The resulting lack of competition leads to
a loss in societys economic welfare.

Imperfect information access to consumers and investors could result in

decisions, which are not rational, and maybe harmful. For instance, unregulated
pharmaceuticals are not compelled to reveal the negative side-effects of drugs
causing citizens, who lack expertise knowledge, to become vulnerable.

Externalities or production costs not borne by producers, but instead

passed on to those external to the production process. Example: effects of
pollution from factories on surrounding residential areas and the environment.

Tragedy of the commons or the exploitation of common property

resources, which may have short term gains for the individual but, translates
into long term losses for society. Depleting levels of scarce resources such as oil,
water, forests pose serious threats to a sustainable future.

Destructive competition between aggressive firms can have harmful

effects on workers as they drive down profit margins, degrade working
conditions, and reduce overall social welfare. MNCs shifting bases to third
world countries to exploit available cheap labour, including child labour,
exemplify this failure.

Activities with positive externalities such as education, art and culture,

research and development; social peace and stability have a high demand in
society but cannot be adequately supplied by the market.

Taking the above mentioned into account, welfare economists argue that
the government has a responsibility to correct market failures because the lack
of coordinated decision-making by individuals prevents optimal social outcomes.
According to this perspective, government should identify if a market failure is
causing a social problem, before it intervenes. It must evaluate its own capacity
to correct the market before doing so, in order to prevent government failures
such as the inability to meet programme costs, excluding more viable market-
based products and services; or substituting public goals with private or vested
organizational ones all of which only increase inefficiency.

If the need for state intervention is established, policy makers have to

identify the most efficient way of doing so. This technique which helps
determine maximum benefits, and minimum losses by evaluating all alternatives
in terms of their monetary implications is called cost-benefit analysis. Its
objective is to make government replicate market decision-making in
distributing resources as closely as possible. A policy may be even chosen as
long as the total gains are higher than the sum of losses.

Criticisms
There are various intangible costs and consequences which do not have a
clear cut price tag. For instance, it is impossible to calculate realistically
the costs of pension programmes on the recipients work incentives, or
the resulting impact on social stability.

In any policy, costs and benefits are not evenly distributed. Where some
pay more, others benefit more. The example of constructing a new airport
illustrates how such a project can have different implications for different
sections in society and require to be evaluated differently - noise
pollution, increased or decreased traveling for others, beneficial
employment, displacement of people etc.

However, its main weakness is the failure to recognize that government

never makes policies in such a technical manner. Even if it was possible
to identify the most efficient and effective public policy, the actual policy
choice is a political one, constrained by political institutions, made by
political actors, and often in response to political pressures (Howlett and
Ramesh 2003).

Welfare economists happen to be policy makers only in specific

circumstances, such as the taxation or fiscal management sectors where
one would expect political decisions to be made solely on welfare-
maximizing criteria. However, welfare economics neglect of political
variables have even led critics of this approach to call it a false and nave
view of the policy process (Hogwood and Gunn 1984).

Group theories: Pluralism and Corporatism

As its name indicates, group theories focus on collective entities, i.e. groups in
society, as the unit analysis. Two well-known examples of inductive group
theories in the study of policy-making are Pluralism and Corporatism.

Pluralism focuses on the role of interest groups in the political process.

Formally expressed as a doctrine by Arthur Bentley in 1908, pluralism has been
modified ever since although the basic tenets have remained. According to
Bentley, different interests exist in society, which manifest in groups consisting
of individuals who share the same concerns. Later theorists divided the notion
of interest into two kinds - latent and manifest; which corresponded to the
formation of two kinds of groups potential and organized (Truman 1964).

Latent Interest Manifest Interest :: Potential Group Organized Group

According to pluralism, multiple groups can exist as they are free-

forming. They can also have overlapping membership and lack representational
monopoly, as the same individual can be a member of different groups and
pursue varying interests. Furthermore, the same interest can be manifest in
more than one group, as seen in most environmental causes. In effect,
overlapping membership helps reconcile conflicts and fosters co-operation
between groups. e.g. environmental causes. Thus public policies are the
products of competition and collaboration between groups working to further
their members collective interests. However, pluralists recognize that all groups
are not alike in their ability to influence or access the state, as financial or
organizational resources can vary from group to group, (e.g. Industrial lobby vs.
Railway union workers)

Criticisms
Critics still argue that this notion of groups varying capacity to affect
government. decisions is insufficiently developed; as standard works on
pluralism suggest that resources, information and means of political
communication are easily available to all citizens, and that all legitimate
voices will be heard in the policy process, when this is in fact far from
reality (Howlett and Ramesh 2003).

Pluralism has been criticized for assuming an ambiguous role for the
government in making public policy. Early pluralists attributed a passive
role for the government, which was likened to a transmission belt that
registered and implemented demands of interest groups; an arena where
groups competed and bargained (Dahl 1967). Some recognized that such
a view of the states role was insufficient and later specified the role of
the government as a referee i.e. a neutral body which set rules for group
conflict and ensured they were not violated.

This position, that public policy was the equilibrium reached in the group
struggle at any given moment (Latham 1952), too was criticized as being
over-simplistic for it assumed that public officials did not compete for
their own interests through their control over government machinery
(Olson 1965). In fact bureaucratic politics, i.e. when differences of
interests and opinion emerge between different departments; and result
in conflicting interpretations of the same problem, can determine how
policies are decided and implemented.

Pluralism also neglects to consider the states capacity to have special ties
with certain groups, or sponsor the establishment of groups where there
are none, or even where they are difficult to accommodate or co-opt.
Despite the constraints of License Raj, major business houses in India
were able to prosper in the 70s due to their proximity to the state.

Group membership can be motivated by different interests. Some offer

incentives to join; while free riders exploit such perks in exchange; and
others may still be formed with the patronage and organizational
assistance provided by vested interests. Thus membership itself is
unpredictable let alone group behaviour.

Interest groups are not exhaustive, and other important factors in the
policy making process also have to be considered, such as the role of the
international system in shaping pubic policies and their implementation
which bypass domestic group pressures. Trade and industrial policies
have to be considered with reference to the international political
economy.

Pluralism has also ignored the role of ideology in shaping policies, such as
Liberalism in the US and Nehruvian Socialism in India.

The weakness of pluralism as an approach is also manifest in its poor

applicability outside the US where different underlying political
 institutions and processes challenge pluralist notions. For instance, the
UK, Japan and Sweden are cases where groups cannot access legislatures
as freely as in the U.S. or other republican forms of government;
authoritarian countries do not harbor the kind of groups propounded by
pluralists as the unit of policy analysis.

Neopluralism, a modified version was developed in the early 70s. It

explicitly acknowledges some groups are more powerful than others. The role
of business is especially acknowledged in a capitalist society, as governments
require a prosperous economy to draw tax revenues that will finance
programmes and re-election (Lindblom 1977). This shift acknowledged the role
played by the government to pursue its own self interest in accord with the
needs of capital. However, other criticisms of the approach remain.

Corporatism is best understood in contrast to pluralism. Groups are not

free-forming, voluntary or competitive. Nor are they autonomous, for they
depend on the state for recognition and support in return for a role in policy
making. Instead corporatism is explicit about the role of the state and
recognizes institutional patterns of relationships between the state and groups.

Public policy is thus shaped by the interaction between the state and
interest group(s) recognized by the state, which itself sets the rules and
mediates between groups. Devising a public policy to revive a sick industry
requires the state, relevant industries and the trade unions to negotiate its
scope in competitive markets. Similarly social welfare policies too involve
negotiations with business associations, welfare groups, and trade unions too, if
the proposed policies affect their members.

Two features determine the policy outcome - the organizational

characteristic of the groups and their proximity with the state. Here, the state
is not viewed as a monolith, but an organization with internal fissures that
influence its actions.

Criticisms
As a concept, corporatism complements the political practices in many
European countries well; however its approach to the study of public policy also
has its limits.

It tends to be more descriptive about the political arrangements between

state and society (in countries such as Sweden and Austria), rather than
explain what governments do, especially in non-corporatist countries such
as India. Little is said about why a particular policy is adopted and
implemented in a particular way, except that lack of institutionalized co-
operation between the state and groups produce fragmented and
inconsistent policies.

While it has improved upon pluralist notions by highlighting the

possibilities of close links between government and certain groups,
corporatism too has focused on just one of the many factors involved in
the policy making process.

Unclear notion of Interest group as a unit of analysis. Several groups

exist in contemporary society, however corporatist literature tends to
 focus only on a few i.e. producer groups such as industry, trade unions
etc. The relative significance of different groups in politics remains vague.

The nature of the state, its interests, why it recognizes some groups and
not others as representatives of corporatist interests, is another area of
ambiguity.

Regardless of such grey areas, corporatist theory has played an important

role in public policy analysis, particularly in Europe and Latin America. It has
contributed to more sophisticated explanations of public-policy making by
highlighting the autonomous role of the state, and institutionalized patterns of
relations between state and society which in turn led to the emergence of new
inductive approaches such as statism, which offer a more comprehensive
understanding of public policy making.

Socio-historical Neo-Institutionalism: Statism

This category of inductive political theory incorporates the insights put forward
by the critics of pluralism and corporatism. It focuses on organized social
structures and political institutions in its analysis. Several theories under this
category emphasize on the State as the leading institution in society and the key
agent in the political process, while others recognize the significance of other
organized social actors to elucidate the policy process too. Both perspectives
trace their origins to the works of Max Weber and Otto Hintze. These thinkers
reversed the notion that a state was a reflection of society and its structure, and
instead argued that it was the states monopoly to use force which enabled it to
reorganize and structure social relations and institutions (Hintze 1975).
Sociological or historical neo-institutionalism views,

... enduring institutional structures as the building blocks of political

and social life. The preferences, capabilities, and basic self-identities of
individuals are conditioned by these institutional structures. Historical
developments are path dependent; once certain choices are made, they
constrain future possibilities. The range of options available to policymakers at
any given time is a function of institutional capabilities that were put in place at
some earlier period, possibly in response to very different environmental
pressures (Krasner 1988:67).

In this approach, policy preferences and capacities are understood in

terms of the social context in which the state is embedded. To the extent that it
focuses on the relationship between large scales structures and individuals, this
approach is similar to its ACI. However, it differs from its deductive counterpart
in several ways. According to Howlett and Ramesh (2003), socio-historical neo-
institutionalism does not reduce institutions to less organized forms of social
interaction, norms, rule or conventions. It neither reduces institutions to the
level of individuals and activities such as economic/social transactions. Finally,
institutions are understood as observable social entities in themselves, and there
is no attempt to trace reasons for their origins through a logically derived
sequence of human existence/cognition. This kind of socio-historical perspective
is inclined towards a state-centric explanation of public policy making and is
discussed in detail below (Skopcol 1985).

Statism views the state as an autonomous actor capable of developing

and implementing its own objectives, which may or may not necessarily be in
response to pressure from dominant groups. Its autonomy and capacity depend
on the personal/agency interests and ambitions of the officials enrolled in its
service, in addition to its sovereignty, unparalleled financial, personnel and
coercive resources. Staunch advocates of statism argue that such an approach
which regards the states role as the key explanatory variable offers more
realistic explanations of long-term patterns of policy development in many
countries than other kinds of political theory.

Criticisms
Statism in its purest form is difficult to accept as it becomes difficult to
explain why states cannot always enforce their will, especially in times of
rebellion, civil disobedience or revolution. Even most autocratic
governments make some effort to respond to popular will. It is especially
impossible for a democratic state to be autonomous from a society with
voting rights, and the constantly changing demands of the marketplace.
Implicit to this perspective is that all states have the same organizational
features and thus will behave the same way; i.e. by responding to the
same problem with similar policies. This is not realistic, as states,
whether strong or weak, yield different policies, which can only be
understood if one considered features other than those of t he state into
the analysis (Przeworski 1990).
Very few subscribe to this version of Statism. Proponents of
institutionalism in the inductive method argue that any analysis of
political phenomena requires both, the pluralist notion of the societal
direction of the state and the statist perspective of state-centered
direction of society.

A milder version of statism concedes that the state certainly does not
become everything (Skopcol 1985). Social relationships and politics are
shaped by other organizations and agents too, and no analysis is complete
without considering the states structure in relation to them. Thus, its emphasis
on the links between state and society in the context of the formers primacy in
pluralist group theory enables statism to complement the notion of society-
centeredness and thus balance the scales of political and social theorizing.

Models of Public Policy

While the earlier section made specific reference to theories from various
disciplines such as economics and political science and their application to
approach the study of public policy, this section gives an overview of some of the
general models that are not specific to any discipline, yet supplement the
alternate ways of thinking about public policy.

Models are useful as they order and simplify reality by identifying what is
significant and providing meaningful communication. Some provide methods for
direct inquiry and research while others suggest explanations.

Process model: This model projects public policy making as patterns of

activities or processes characteristic of government action (or inaction). Its
emphasis lies on the procedure of policy making rather than content, i.e.
problem identification; setting the agenda; adoption; budgeting; implementation
and evaluation. The model is more descriptive and has weak explanatory
powers. Its does not pay adequate attention to socio-economic factors, such as
the role of other policy actors, or the consequences and impact of policies. The
model is best used in combination with other models.
Incrementalist model: Incremental policy-making is essentially remedial; it
focuses on small changes to existing policies rather than on dramatic
fundamental changes. It views policy-making as a continuation of past
government activities with modifications relying on existing programme policies
and expenditure records as a base to design new policies by increasing,
decreasing and modifying programmes.
According to Lindblom (1980) decision makers do not strictly adhere to a
pattern of annual reviews of the whole range of existing and proposed polices,
nor identify societal goals, research the costs and benefits of alternative policies
in achieving these goals, rank order preferences for each policy alternative in
terms of the maximum net benefits, and then make a selection on the basis of all
the relevant information.

Constraints of time, inadequate information and costs prevent policy

makers from identifying the full range of policy alternatives and their
consequences. In addition, sunk costs in money, buildings, infrastructure and
time preclude radical variations in policy options. Finally, political constraints
either at the intra-agency, and/or the inter-agency levels, further prevent the
establishment of clear-cut societal goals and the accurate calculation of costs
and benefits. Thus the advocates of incrementalism argue that it is safer to
adhere to known policies because of the uncertainty associated with the
consequences of radical and new ones. Its political expediency in reducing
conflict and maintaining stability are the strengths of this model.

Systems Output Model: Conceptualized by David Easton, systems theory

views public policy as a response of the political system to its environment. This
model likens the government to an organism which responds to inputs (public
demands and support) and produces outputs (policies). It is assumed that the
government serves as a neutral body where public policy is processed. The value
of this model lies in the questions it asks

What different dimensions of environment generate demands?

Why and how does the political system balance these various pressures
and survive?
How do the environment and the political system affect the contents of
public policy?
How and to what extent does public policy have an impact in bringing
changes in the environment itself?

Other models of public policy have already been discussed earlier in the
context of theoretical approaches. These include the institutional model (ACI
and Socio-historical neo-Institutionalism), the group model (Pluralism and
Corporatism), elite theory (Marxist Social theory) and game theory (Public
Choice theory).

Conclusion
This chapter covered the main approaches and models of how public policy can
be understood and pursued. It revealed the wide spectrum of units, levels and
methods of analyses involved and deepened our understanding of how policies
are made, which actors and institutions shape the policy and what makes
policies happen. From the above discussion of the application of various socio-
political theories to public policy making, it is clear that there is a wide
spectrum of approaches to understand public policy.
 While deductive theorists tend to apply preconceived theoretical notions
to actual public policies, their explanatory capacity is seldom tested/refined
against empirical evidence. Instead public policy making is portrayed to fit into
the theoretical frameworks and metaphors on which deductive theories are
premised. The limitations of this method have been realized and thus set in
motion a distinct evolution in thinking away from deductive theories and toward
more open-ended and empirically informed inquiry.

Several inductive and deductive approaches tend to explain socio-political

phenomena in mono-causal, i.e. one-way, terms. This level of analysis was
heavily criticized for offering an incomplete framework. It is evident from the
spectrum of approaches that public policy can be studied under different
theoretical frameworks and yet yields different conclusions. Thus it is important
to include different point of view to further our understanding of the question
itself. To some extent it is possible to layer multiple units of analysis, and
combine both inductive and deductive methods to make the analysis more
comprehensive.

Another observable shift is the conception of human behaviour. Earlier all

political phenomena, including public policy, viewed human activity as a battle
to survive in a world of limitless wants and limited resources. This notion has
been gradually abandoned to accept an incrementalist attitude; whereby
previous experiences of actors and those learnt from others are recognized as
significant determinants of actor-behaviour in policy-making. In other words,
the goals and interests sought by actors depend on what they believe is feasible,
which itself is molded by their knowledge of previous achievements.

Thus public policy is best understood through an analytical framework

which considers an entire range of factors affecting the policy making process
and allows hypotheses to be tested through a rigorous empirical analysis of the
reality policy analysts are trying to explain and understand.

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