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The practical realities of policy on the run - 4Qs
- 1. Louise Gilding Executive Director,Policy, Projects and Legislation
- 2. Work SafetyLegislation 2008 Respect Equity and Diversity Framework 2010 Business Development Strategy 2012 Better Services Better Practice Report 2012 Trading Scheme for EGMs 2013 Totalisator Legislation 2013 Red Tape Reduction Legislation 2014 Public Pools legislation 2014 Affordable Housing Action Plans Business Development Strategy 2015
- 3. Strategic Policy ◦Push the boundaries ◦ Blue Sky ◦ Abstract Responsive Policy ◦ Make it work ◦ high political influence ◦ policy on the run Operational Policy ◦ Day to day ◦ keep things running
- 4. ‘Policy that can’tbe implemented isn’t policy’
- 5. Intervention Logic Policy Cycle Bardach’s eightfold path of policy analysis Rational and Participatory approaches The panic loop Cost benefit Analysis Multi-criteria analysis Economic modelling and forecasting Scenario Analysis
- 6. ‘High-performing public officials succeedin balancing these competing imperatives on a daily basis in their professional practice......developing various integrated and blended models.’
- 7. In groups of3 or 4 pick one of the following examples and discuss how you would approach the task ie your blended approach (not your solution).
- 8. Deliver in6 months: Prepare contemporary industry development strategy to support private sector growth in the ACT. Deliver in 2 months: Working with an advisory group provide advice to an incoming government about public sector reform. Deliver in 3 weeks: enable $50 note acceptors on ACT electronic gaming machines.
- 9. Four questions anda triangle
- 10. 1. What’s theproblem? ◦Are there multiple problems?
- 11. 2. What doesthe evidence tell us? ◦What’s the research telling us? ◦What’s the data telling us? ◦What are people telling us?
- 12. 3. What shouldwe do? ◦Recommendations ◦Outcomes ◦Is this the right thing to do? ◦Will our plan make a difference? ◦Can it be implemented?
- 13.
- 14. 4. What doessuccess look like? ◦Outputs ◦Program Evaluation ◦Reporting timeframes ◦What metrics do we hope to change?
- 15. Four questions anda triangle
- 16. The Problem? ACTGovernments have successively nominated ‘buffering’ the local economy against fluctuations in Australian Government spending as a key priority. Grow the Territory’s private sector. A diverse economy provides: • a variety of job opportunities • increased government revenue streams • reduces the overall impact of fluctuations in government spending
- 17. Research told us? There are a range of economic regulation tools that could be used by the ACT Government to encourage innovation and grow the Territory’s private sector economy. These tools, or interventions, are designed to change the behaviour of individuals, families, organisations and whole communities through the use of incentives many of which have their genesis in microeconomics.
- 18. Policy Interventions addressingInnovation Market Failure Policy Intervention type Freiberg Regulation Category Non- excludability (private incentives too low) Non- rivalry (diffusi on too narrow) Coordinati on (broken linkages) Risk (need to share risk) ACTG Programs R&D support schemes for industry Service /Advice provision schemes Informational Entitlement schemes/tax concessions Economic Competitive Grants schemes Transactional Public research Economic Collaboration University-industry linkages Informational R&D consortia and inter-firm networks Informational Industry R&D Corporations Transactional Public procurement Market Creation Financial support schemes/Venture Capital Transactional Cluster formation and networks Informational
- 19. Common elements instrategies across the globe: ◦ Investing in people (building knowledge, creating jobs) ◦ Investing in place (Infrastructure, precincts, affordability) ◦ Promotion (visit, study, work, do business, live) ◦ Business Programs (innovation, commercialisation, trade, investment) ◦ Business friendly (regulations, taxes, fees, charges) ◦ Focus on clean and green economic opportunities
- 20. Data told us? Lack of firm level innovation data Hard to prove program causation Plenty of anecdotal success stories Export Data ACT Active Businesses
- 21. People told us? Innovation investment is long term The current programs are good – improvements around clarity, streamlining and visibility A solution is needed to enable SMEs to successfully attract Government procurement Cost of doing business is high Capability and global supply chain mapping/gap analysis Key competitive advantage = proximity to decision makers
- 22. Education Digital Clean Tech Knowledge Production Knowledge Application Knowledge Diffusion Services toGovt Creative Entrepreneurialism Productivity/Jobs Supporting Business Investment Accelerating Business Innovation The Right Business Environment Business Development Strategy Jobs, Growth and Diversification
- 25. Key informants Multi- disciplinaryteams Program policy connections
- 26. Key characteristicsof policy leaders: ◦ Don’t panic ◦ Don’t be overwhelmed ◦ Practice de-confusion - write it down!! ◦ Look for the next step ◦ Practice creative listening ◦ What is the right thing to do? ◦ Keep thinking – that’s what policy people do!
Editor's Notes
- #2 For me working in the ACT Government is my vocation. I am called to serve my community by developing policies and systems that help solve people’s problems and make this community a better place. I believe that good policy makes a difference for and resonates with people. People often know the solutions to their problems and when they hear a government policy that is right there is general agreement with it. I believe that good policy needs to be made with good evidence and with stakeholder consultation – these inputs must mould any policy and its implementation. I believe that good policy will drive itself and require minimal regulation because it incentivises behavioural change – often when it is the ‘right’ thing to do the policy is self-enforcing and doesn’t need to be driven.
- #3 In the twenty years I have worked in government I have had the opportunity to work on many different policies – I’ve listed a few. What seems to be a increasing trend...or at least it seems to me that the policy cycle is getting quicker and I and my teams are being asked to turn around projects and advise at an ever increasing pace. I love running – but policy on the run is challenging. Our public sector operating environment provides a unique challenge. How we work within our operating and authorising environment to get the right outcomes is my area of expertise and also my passion. So often we are not lacking good ideas but rather our issue is how to implement them in a complex system and channel resources towards policy objectives and outcomes that the evidence shows will make a difference. Delivering solutions to complex problems is never straightforward. My aim today is to share with you what I do as a policy analyst, as a problem solver and talk about some real pieces of work that I have the privilege to work on.
- #5 Problem solving is an art form. One way I like to think about public policy is that it is solving problems in order to achieve a different behaviour in the community. It might be that we what a healthier community so we use various design interventions to help people be more active. We might want to minimise the impact of problem gambling so we restrict access to poker machines. As problem solvers we have many different tools and interventions that can be used to achieve more or less of a behaviour. If I speak like an economist for we use interventions to decrease negative externalities or to increase positive externalities. One of the funniest examples of an intervention I have read about is a school principal who was trying to modified student behaviour. The female students had taken a liking testing their pouts on the bathroom mirrors and the janitors, who were sick and tired of trying to clean the greasy lipstick off were about to walk off the job. The Principal threatened to smash the mirrors with a hammer, threatened detention, punishment, wrote to parents. Eventually the solution to the problem came from a janitor with a bright idea. During the recess break she positioned herself in the bathroom and proceeded to demonstrate to the girls how she cleaned the mirrors....by first dipping the squeegee into the toilet bowl and then vigorously cleaning the mirror.....needless to say there was an immediate behavioural change. One of the things I say to may teams is policy that can’t be implemented isn’t policy... Public policy problem solving is complex and subtle. It is a professional skill, which can take many years to master. There are a plethora of policy frameworks and tools all aimed at helping policy analysts with the problem-solving art.
- #6 These are not even the tip of the ice berg of the tools which are most of which would be familiar to many of you. What do we do with these theories, methods and tools in the fast paced policy environment in which we operate??
- #7 I love this quote. As practitioners how do we bring the theories and frameworks together on a daily basis to deliver outcomes that actually work, that actually change behaviour that actually have a positive impact on our community?
- #8 I’ve handed out two different briefs. In your table groups have a look at the task and in two minutes tell me how you would approach it – I’m not looking for content or solution but how you would approach the task.
- #10 Seek feedback from a few table groups Here is my blended flexible approach.....It can be remembered in an instant and scaled up or down depending on time, resources and the complexity of the problem......this is what I do and it is simply four questions and a triangle......
- #11 The question I begin with is ‘What’s the problem?’. Asking questions is the key to drawing out and teasing out what the real problem is. One of the tools that I particularly like for this process is a Triple Bottom Line Assessment tool. It asks a series of questions relating to economic, social and environmental and provides a neat framework for teasing apart what the policy problem you are trying to address – helps you to remember the questions to ask from multiple different angles and also means you don’t have to remember the questions.... In the process you will not doubt find that your idea of the problem changes, you might find multiple problems and you will need to undertake some scoping work. One of the greatest pitfalls is to be working on a solution to the wrong problem. There are a guzillion frameworks you could use – When problems are complex I like to keep it simple - What’s the problem? Good Chapter – The stages of Problem Solving in Malcolm Sparrow’s - The Regulatory Craft.
- #12 The next questions I like to ask deal with the qualitative, quantitative and research data that will help inform and refine the problem but also begin to tease out possible interventions and solutions: What is the literature/research/data telling us bout our problem? BDS – Spent time doing and Environment Scan, and getting to understand our data and programs. BPBS – scoping issues plus Hawke – pick a problem! This is also What are people telling us? Who would have something to say about this problem? The BDS involved three levels of consultation: 10 industry focus groups involving over 100 SMES; Discussion Paper and invitation to comment; and 30 key informant interviews that drilled down to deeper questions. What I found was that the key themes coming through the qualitative data were matching the research and the theory. So for example a stakeholder comment might be: Lack of venture capital funding makes it difficult to commercialise our ideas. Economic theory calls this a market failure (See essay) Likewise this more active government role is justified by the identification of market failures that hamper innovation. As Freiberg argues, ‘the existence of market failure is one of the principal rationales for government regulation,’ (2008:109). Sub-optimal innovation occurs when market mechanisms are unable to yield to the socially optimal level of investment in innovation either because the market is not getting or seeing the right signals, or, there are barriers to diffusion and adoption (De Rassenfosse et al, 2011). By its very nature innovation is steeped in risk and only a small number of entrepreneurs succeed. Nevertheless the successes more than compensate for the failures along the way. ‘Indeed in the innovation process, the failures are just as important….without [investor] willingness to experiment and risk their capital and the capital of others, there would be no innovation process,’ (Cutler, 2008:37). The role of government is to actively support this process by countering the market failures that discourage innovation investment.
- #13 What should we do? In undertaking this process the interventions and possible solutions to the problem begin to reveal themselves. Co-design Innovative Procurement – rethinking the delivery of public services This is of course and iterative process, where the problems and research may be refined. So I keep those four key questions in my head – they are easy to remember, they are scalable they can help you with a weeklong project or 2 year project.
- #14 Moore, M (1995) Creating Public Value: Strategic Management in Government, Cambridge, MA: University Press In considering ‘what should we do’ I have found Moore’s strategic triangle a very useful overlay or framework to test recommendations. The concept of public value has been around now for about twenty five years and Moore’s work about twenty. Public value is a well used policy term that focuses on: A wider range of value than public goods; More than outputs; What has meaning for people, rather than what a public-sector decision-maker might presume is best – this is where genuine consultation and engagement is absolutely critical for the process – not actively listening to and understanding stakeholders but assuming that data and reserach holds all the answers is one of the key mistakes I see repeated. While academics are still debating its efficacy I find Moore’s triangle very valuable in making sense of what we actually do. So when tested against the triangle recommendations must: Be aimed at creating something substantively value ie does it solve the problem?? Be legitimate and politically sustainable – ie will politicians and stakeholders support the approach, will it attract support and resources? Be operationally and administratively feasible - ie policy that can’t be implemented isn’t policy – is it doable with the avaiable organisational and external capabilities needed to produce it. When I look back over my policy successes and failures there is a correlation with whether or not the triangle is aligned or misaligned. A most recent example of Mis-alignment was the debacle in January in relation to note acceptors.....the headline read ‘Minister bypassed officials’ advice’. My team and I where asked to make quick legislative changes to facilitate the use of fifty dollar note acceptors. We provided advice that cash limits must also be implemented as we felt that this would align the authorising environment – Ministers and stakeholders. Minister disagreed with out advice and directed that we proceed without a cash limit....classic policy failure followed.
- #15 This question is all about policy evaluation Best to build the reporting elements, metrics, individual program evaluations at the beginning. The nature of the policy problems and multiple influences makes measurement difficult. Internal audits and Auditor-General audits can be proactively used What is important is that we are able to account with some level of accuracy whether the public is getting a good return on its taxes from public services? Its difficult to do this at the best of times. Measuring public value is never easy.
- #16 So I keep those four key questions in my head – they are easy to remember, they are scalable they can help you with a weeklong project or 2 year project. So as we have a little more time lets see the approach applied to the development of phase 1 of the ACT Business Development strategy.
- #17 In 2011-2012 the ACT Government Priorities included the preparation of a ‘contemporary industry development strategy to support private sector growth in the ACT.’ This is where we started.
- #18 What is the literature/research/data telling us about our problem? BDS – Spent time doing and Environment Scan, and getting to understand our data and programs. BPBS – scoping issues plus Hawke – pick a problem! Economic regulation can involve ‘altering the costs and benefits of certain actions, thereby influencing a change in the economic, social or environmental behaviour of individuals and firms,’ (Freiberg, 2008:110). The Department of Innovation, Industry Science and Research has identified a range of possible regulation or policy interventions and actions that governments can take to address innovation market failures and support increased productivity through innovation. These include: Providing support in the form of grants and tax incentives to overcome market failures that discourage private investment in innovation; Providing support for structural changes; Building firms’ internal skills and capability to increase internal capacity to capitalise on growth potential; Funding vital research that would not or could not be undertaken by the private sector; and Improving connections and interactions between the different actors in the innovation system such as firms, universities and publically funded research organisations.
- #19 When the market is left on its own it may fail to allocate resources efficiently. ‘Market failure can arise in the case of externalities (where there are missing markets for positive and negative spill overs); ...of imperfect or asymmetric information (where for example participants are informed differently about goods in the market), or where information is incomplete or costly,’ (Freiberg, 2008:109). Knowledge is a public good. Based on the characteristics of public goods, market failure in innovation activities can be classified into four groups (De Rassenfosse et al, 2011): Non-excludability – once created knowledge can ‘spill over’ and be used by others for their benefit. However without regulation the market may not provide enough incentive for optimal investment in innovation. Spill overs provide the rationale for government intervention such as the provision of grants, matched funding schemes, subsidies and patents; Non-rivalry – this means that knowledge can be used by multiple people without impacting anyone’s ability to use it. It is no longer scarce and therefore the usual price setting signals of the market do not operate efficiently; Co-ordination – collaboration and networking are vital innovation ingredients. Linkages between universities, research and industry are the ‘lubricant’ in successful regional innovation systems. However coordination often fails due to the cost of time and disclosure and the lack of information about who to collaborate with; and Risk – commercialisation of innovation involves risk and uncertainty. One way governments can ‘de-risk’ blue sky innovations is through public procurement, (De Rassenfosse et al, 2011) and creating demand for innovation. These characteristics have complex economic implications in a knowledge economy and provide a clear market failure rationale for government intervention. In developing innovative products and services small firms are also faced with the need to undertake activities characterised by substantial economies of scale. Canberra’s business landscape is dominated by small enterprise (SMEs). In 2010-11 there were 25,632 businesses in the ACT (ABS, 2011). ‘Ample evidence shows that SMEs have difficulty attracting research and development investment funds,’ (De Rassenfosse et al, 2011:34). A range of programs and support is required to overcome the entry barriers faced by Canberra’s SMEs in developing and accessing innovation.
- #22 As I mentioned earlier – stakeholder engagement is critical. Designing qualitative research methods for a particular problem is just as important as the numbers – however it takes skill, can be subject and often is just not given the same weight as the numbers in out policy processes. The fundamental success of the BDS Phase I rested on the strength and depth of stakeholder consultation – it become as much about business confidence as it did about the programs. At the start of the consultation business groups in the ACT were hostile and cynical towards the Territory government. The BDS involved three levels of consultation: 10 industry focus groups involving over 100 SMES; Discussion Paper and invitation to comment; and 30 key informant interviews that drilled down to deeper questions Flowing from the 10 Industry groups a and the key informant interviews themes began to emerge. What I found fascinating was that the themes and the issues being articulated related to the various market failures – they weren’t being expressed in the terms of market failure and economic regulation – but they were aligned. What I found was that the key themes coming through the qualitative data were matching the research and the theory. So for example a stakeholder comment might be: Lack of venture capital funding makes it difficult to commercialise our ideas. Economic theory calls this a market failure and says it like this....... Likewise this more active government role is justified by the identification of market failures that hamper innovation. As Freiberg argues, ‘the existence of market failure is one of the principal rationales for government regulation,’ (2008:109). Sub-optimal innovation occurs when market mechanisms are unable to yield to the socially optimal level of investment in innovation either because the market is not getting or seeing the right signals, or, there are barriers to diffusion and adoption (De Rassenfosse et al, 2011). By its very nature innovation is steeped in risk and only a small number of entrepreneurs succeed. Nevertheless the successes more than compensate for the failures along the way. ‘Indeed in the innovation process, the failures are just as important….without [investor] willingness to experiment and risk their capital and the capital of others, there would be no innovation process,’ (Cutler, 2008:37). The role of government is to actively support this process by countering the market failures that discourage innovation investment. I remember briefing the Minister on the results of the consultation and before we knew whether we had program funding.....
- #23 Bringing it all together......
- #24 Through providing targeted enabling and support activities based on a market failure rationale, economic theory and anecdotal evidence suggests that Canberra businesses will be better positioned to run successful and profitable enterprises that provide a diversity of job opportunities and increased government revenues. ‘The system-wide returns to a diverse public portfolio of innovative research and development…..may well be sufficient to make a case for public support and investment,’ (Cutler, 2008:40). To grow the private sector the ACT Government needs to continue to develop and resource a comprehensive and complementary range of regulatory interventions targeting specific market failures at critical points in the innovation system. Building evidence capability to determine where to get the best value for tax payers remains a key challenge.
- #26 The role of key informants People’s stories identify the policy/program gaps => market failure =>role for government When consulting drop the rhetoric – stakeholders need the genuine you, not the spin from the Minister’s office Its important to hear the quite voices (example of two girls) squeaky wheels get attention but the quite voices can often articulate the underlying problems. When on the run the relationships that you have cultivated and maintain can often provide the fast sanity check thats needed! Multi-disciplinary teams Innovation happens at the intersection of disciplines. We tend to think and get locked into the frameworks of our qualifications, economist, lawyer, planner etc. Diversity in teams can be hard work but it is worthwhile. Seeking ‘help’ or running your recommendations, problems, research by teams with different skill sets can be revealing and rewarding. Program Policy Connections If front line implementers are involved in your journey then the risk of the policy not being implemented is high. Again it takes effort to talk to the front line to stakeholders....but it is critical and a must.
- #27 My focus is to do work that matters to our community that builds our economy and makes Canberra a better place. I am pleased to say that more often than I do go home and I think my team does also, with a sense of achievement, a sense of purpose and with a sense of having made a difference.