Assessment of Policy Instruments

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political and social variables over time. There are different approaches to how instruments can be implemented outlined as follows:

1.The policy process is desegregated into a series of stages and appropriate instruments are identified with the different stages of policy process.

2.The large range of implementation techniques available in a government can be classified into a generic class.

3.Finding the actual instances of the instruments used. Explanation may be given for why a particular government chooses one kind of instrument over others.

According to Howlett (1991), generally two common approaches are used for dealing with policy instruments, the “resource” approach and the “continuum” approach. In the “resource” approach, various techniques are categorized according to the nature of the governing resources they employ; for example, fiscal resources or organizational resources. In the “continuum” approach, instruments are ranged against some choice which government usually make in the implementation process, for example, whether to use state- (i.e., regulatory) or market-based instruments. Both the approaches may have a separate starting point in the policy implementation process; hence, they are not mutually exclusive.

In the case of “resource-based instruments,” either fiscal or organizational resources, an assumption may be made before evaluating a policy that “the instruments are not entirely substitutable, i.e., particular instruments have particular capabilities and particular requisites.” Such an assumption will justify the evaluation of policy in regard to their instruments, whether the instruments chosen by the government have matched the job they are expecting from the performance of the policy. Another perspective of such an assumption in policy evaluation is to look into the established technical specification of each instrument made by the government to see their theoretical suitability for addressing a particular problem targeted by the policy. Considering the suitability of those technical specifications, the choice of a particular instrument can be justified on the basis of parameters of a given policy situation and matching the needs for a requisite action. At the same time, the evaluation may look into the supply of government resources required with the capabilities and the resource demands of the governing instruments.

Another assumption may be that there are similarities between instruments; and instruments are technically substitutable. This assumption may be considered as a component of the “continuum” approach. Under this approach, the rational choice of policy instrument becomes difficult and the choice mainly depends on factors outside the conventional policy process such as political choice. Under those circumstances, different governments may tend to choose different instruments from the same or similar policy. When both the approaches are considered together, it can be summarized that the “resources” approach considers technical aspects and the “continuum” approach considers the contextual aspect of policy instrument choice. Technical aspects of policy instruments are mainly socioeconomic, whereas those of contextual aspects are mainly sociopolitical. Therefore, evaluation of policy instrument can be expressed on the basis of social, political, and economic attributes.

8.3 ATTRIBUTES OF INSTRUMENT

Policy instruments may have individual attributes on which the choice of instruments may depend. Linder and Peters (1989) recognize that there are four basic attributes of instruments, which are usually considered by government in selecting a policy:

1.Resource intensiveness, including administrative cost and operational simplicity.

2.Targeting, including precision and selectivity.

3.Political risk, including the nature of support and opposition, public visibility, and chances of failure.

4.Construction on state activity, including difficulties with coercion and ideological principles limiting government activity.

These attributes are related to social, political, and economic characters of the society and, therefore, cannot be evaluated ignoring the contextual linkages with the social attributes. Considering the complexity of social attributes, policy analysts can arrive at some mix of ideas to determine whether selection of an instrument in the policy was social or political. It is worth noting here that assessment of social instruments may need to adopt a different approach than that of political instruments.

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8.4 CHOICE OF INSTRUMENTS

The key determinant of instrument choice in developing countries could be dominated by the pursuance of economic objectives rather than that of environmental objectives. Decision-makers usually weigh the different options available and perform their own kind of administrative cost benefit analysis in final choice of instrument. If that cannot be done, instrument choice is ultimately a political decision, heavily influenced by the nature of beliefs, attitudes, and perceptions held by political actors. For example, the present situation of forest policy instruments in Indonesia, in a structural context and conjectural context, is serving only short-term economic objectives determined by political parties, their representatives in the government, administrators, and interested groups. Such a choice puts limitation on institutional capabilities to emphasize technical capacities of specific instrument.

On the basis of a “continuum” approach, Howlett (1991) explained about some technical capacity of instrumental choice. Those factors are presented in Table 8.1. The table shows that the continuum approach of instrument implementation is not a single decision but a

Table 8.1 Factors of Instrumental Choice Under Continuum Approach of Policy