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Policy is a deliberate system of guidelines to guide decisions and achieve rational outcomes. A policy is a statement of intent and is implemented as a procedure or protocol. Policies are generally adopted by a
governance Governance is the process of interactions through the laws, norms, power or language of an organized society over a social system ( family, tribe, formal or informal organization, a territory or across territories). It is done by the ...
body within an organization. Policies can assist in both ''subjective'' and ''objective''
decision making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either ra ...
. Policies used in subjective decision-making usually assist senior management with decisions that must be based on the relative merits of a number of factors, and as a result, are often hard to test objectively, e.g. work–life balance policy... Moreover, Governments and other institutions have policies in the form of laws, regulations, procedures, administrative actions, incentives and voluntary practices. Frequently, resource allocations mirror policy decisions. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. In contrast, policies to assist in objective decision-making are usually operational in nature and can be objectively tested, e.g. password policy. The term may apply to government, public sector organizations and groups, as well as individuals, Presidential executive orders, corporate privacy policies, and parliamentary rules of order are all examples of policy. Policy differs from
rules Rule or ruling may refer to: Education * Royal University of Law and Economics (RULE), a university in Cambodia Human activity * The exercise of political or personal control by someone with authority or power * Business rule, a rule pert ...
or law. While the law can compel or prohibit behaviors (e.g. a law requiring the payment of taxes on income), policy merely guides actions toward those that are most likely to achieve the desired outcome. Policy or policy study may also refer to the process of making important organizational decisions, including the identification of different alternatives such as programs or spending priorities, and choosing among them on the basis of the impact they will have. Policies can be understood as political,
managerial Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities ...
, financial, and administrative mechanisms arranged to reach explicit goals. In public corporate finance, a critical accounting policy is a policy for a firm/company or an industry that is considered to have a notably high subjective element, and that has a material impact on the
financial statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...
s.


Effects


Intended effects and policy-design

The intended effects of a policy vary widely according to the organization and the context in which they are made. Broadly, policies are typically instituted to avoid some negative effect that has been noticed in the organization, or to seek some positive benefit. A
meta-analysis A meta-analysis is a statistical analysis that combines the results of multiple scientific studies. Meta-analyses can be performed when there are multiple scientific studies addressing the same question, with each individual study reporting m ...
of
policy studies Policy studies is a subdisicipline of political science that includes the analysis of the process of policymaking (the policy process) and the contents of policy (policy analysis). Policy analysis includes substantive area research (such as health ...
concluded that international treaties that aim to foster global cooperation have mostly failed to produce their intended effects in addressing global challenges, and sometimes may have led to unintended harmful or net negative effects. The study suggests enforcement mechanisms are the "only modifiable treaty design choice" with the potential to improve the effectiveness. Corporate purchasing policies provide an example of how organizations attempt to avoid negative effects. Many large companies have policies that all purchases above a certain value must be performed through a purchasing process. By requiring this standard purchasing process through policy, the organization can limit waste and standardize the way purchasing is done. The State of
California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the ...
provides an example of benefit-seeking policy. In recent years, the numbers of
hybrid cars A hybrid vehicle is one that uses two or more distinct types of power, such as submarines that use diesel when surfaced and batteries when submerged. Other means to store energy include pressurized fluid in hydraulic hybrids. The basic princi ...
in California has increased dramatically, in part because of policy changes in
Federal law Federal law is the body of law created by the federal government of a country. A federal government is formed when a group of political units, such as states or provinces join in a federation, delegating their individual sovereignty and many ...
that provided USD $1,500 in tax credits (since phased out) as well as the use of high-occupancy vehicle lanes to hybrid owners (no loew hybrid vehicles). In this case, the organization (state and/or federal government) created an effect (increased ownership and use of hybrid vehicles) through policy (tax breaks, highway lanes).


Unintended

Policies frequently have side effects or
unintended consequences In the social sciences, unintended consequences (sometimes unanticipated consequences or unforeseen consequences) are outcomes of a purposeful action that are not intended or foreseen. The term was popularised in the twentieth century by Ameri ...
. Because the environments that policies seek to influence or manipulate are typically complex adaptive systems (e.g. governments, societies, large companies), making a policy change can have counterintuitive results. For example, a government may make a policy decision to raise taxes, in hopes of increasing overall tax revenue. Depending on the size of the tax increase, this may have the overall effect of reducing tax revenue by causing capital flight or by creating a rate so high that citizens are deterred from earning the money that is taxed. (See the
Laffer curve In economics, the Laffer curve illustrates a theoretical relationship between tax rate, rates of taxation and the resulting levels of the government's tax revenue. The Laffer curve assumes that no tax revenue is raised at the extreme tax rates o ...
.) The policy formulation process theoretically includes an attempt to assess as many areas of potential policy impact as possible, to lessen the chances that a given policy will have unexpected or unintended consequences.


Cycle

In
political science Political science is the scientific study of politics. It is a social science dealing with systems of governance and power, and the analysis of political activities, political thought, political behavior, and associated constitutions and ...
, the policy cycle is a tool used for analyzing the development of a policy. It can also be referred to as a "stages model" or "stages heuristic". It is thus a rule of thumb rather than the actual reality of how policy is created, but has been influential in how political scientists looked at policy in general. It was developed as a theory from
Harold Lasswell Harold Dwight Lasswell (February 13, 1902December 18, 1978) was an American political scientist and communications theorist. He earned his bachelor's degree in philosophy and economics and was a PhD student at the University of Chicago. He wa ...
's work. It is called the policy cycle as the final stage (evaluation) often leads back to the first stage (problem definition), thus restarting the cycle.
Harold Lasswell Harold Dwight Lasswell (February 13, 1902December 18, 1978) was an American political scientist and communications theorist. He earned his bachelor's degree in philosophy and economics and was a PhD student at the University of Chicago. He wa ...
's popular model of the policy cycle divided the process into seven distinct stages, asking questions of both how and why public policies should be made. With the stages ranging from (1) intelligence, (2) promotion, (3) prescription, (4) invocation, (5) application, (6) termination and (7) appraisal, this process inherently attempts to combine policy implementation to formulated policy goals. One version by James E. Anderson, in his ''Public Policy-Making'' (1974) has the following stages: # Agenda setting (Problem identification) – The recognition of certain subject as a problem demanding further government attention. # Policy formulation – Involves exploring a variation of options or alternative courses of action available for addressing the problem. (appraisal, dialogue, formulation, and consolidation) # Decision-making – Government decides on an ultimate course of action, whether to perpetuate the policy status quo or alter it. (Decision could be 'positive', 'negative', or 'no-action') # Implementation – The ultimate decision made earlier will be put into practice. #
Evaluation Evaluation is a systematic determination and assessment of a subject's merit, worth and significance, using criteria governed by a set of standards. It can assist an organization, program, design, project or any other intervention or initiative ...
– Assesses the effectiveness of a public policy in terms of its perceived intentions and results. Policy actors attempt to determine whether the course of action is a success or failure by examining its impact and outcomes. Anderson's version of the stages model is the most common and widely recognised out of the models. However, it could also be seen as flawed. According to Paul A. Sabatier, the model has "outlived its usefulness" and should be replaced. The model's issues have led to a paradoxical situation in which current research and updated versions of the model continue to rely on the framework created by Anderson. But the very concept of the stages model has been discredited, which attacks the cycle's status as a heuristic. Due to these problems, alternative and newer versions of the model have aimed to create a more comprehensive view of the policy cycle. An eight step policy cycle is developed in detail in ''The Australian Policy Handbook'' by Peter Bridgman and
Glyn Davis Glyn Conrad Davis AC (born 25 July 1959) is an Australian academic who is the Secretary of the Department of Prime Minister and Cabinet, appointed by Prime Minister Anthony Albanese on 30 May 2022, and commenced on 6 June 2022. Davis was ...
: (now with Catherine Althaus in its 4th and 5th editions) # Issue identification #
Policy analysis Policy analysis is a technique used in the public administration sub-field of political science to enable civil servants, nonprofit organizations, and others to examine and evaluate the available options to implement the goals of laws and elected ...
# Consultation (which permeates the entire process) # Policy instrument development # Building coordination and coalitions # Program Design:
Decision Decision may refer to: Law and politics * Judgment (law), as the outcome of a legal case *Landmark decision, the outcome of a case that sets a legal precedent * ''Per curiam'' decision, by a court with multiple judges Books * ''Decision'' (nove ...
making # Policy Implementation # Policy
Evaluation Evaluation is a systematic determination and assessment of a subject's merit, worth and significance, using criteria governed by a set of standards. It can assist an organization, program, design, project or any other intervention or initiative ...
The Althaus, Bridgman & Davis model is
heuristic A heuristic (; ), or heuristic technique, is any approach to problem solving or self-discovery that employs a practical method that is not guaranteed to be optimal, perfect, or rational, but is nevertheless sufficient for reaching an immediat ...
and iterative. It is and not meant to be or
predictive A prediction ( Latin ''præ-'', "before," and ''dicere'', "to say"), or forecast, is a statement about a future event or data. They are often, but not always, based upon experience or knowledge. There is no universal agreement about the exa ...
. Policy cycles are typically characterized as adopting a classical approach, and tend to describe processes from the perspective of policy decision makers. Accordingly, some
postpositivist Postpositivism or postempiricism is a metatheoretical stance that critiques and amends positivism and has impacted theories and practices across philosophy, social sciences, and various models of scientific inquiry. While positivists emphasi ...
academics challenge cyclical models as unresponsive and unrealistic, preferring systemic and more complex models. They consider a broader range of actors involved in the policy space that includes civil society organisations, the
media Media may refer to: Communication * Media (communication), tools used to deliver information or data ** Advertising media, various media, content, buying and placement for advertising ** Broadcast media, communications delivered over mass el ...
, intellectuals, think tanks or policy research institutes, corporations, lobbyists, etc.


Content

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


Types

The American political scientist Theodore J. Lowi proposed four types of policy, namely ''distributive'', ''redistributive'', ''regulatory'' and ''constituent'' in his article "Four Systems of Policy, Politics and Choice" and in "American Business, Public Policy, Case Studies and Political Theory". Policy addresses the intent of the organization, whether government, business, professional, or voluntary. Policy is intended to affect the "real" world, by guiding the decisions that are made. Whether they are formally written or not, most organizations have identified policies. Policies may be classified in many different ways. The following is a sample of several different types of policies broken down by their effect on members of the organization.


Distributive

Distributive policies extend goods and services to members of an organization, as well as distributing the costs of the goods/services amongst the members of the organization. Examples include government policies that impact spending for
welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
,
public education State schools (in England, Wales, Australia and New Zealand) or public schools (Scottish English and North American English) are generally primary or secondary schools that educate all students without charge. They are funded in whole or in pa ...
, highways, and public safety, or a professional organization's benefits plan.


Regulatory

Regulatory policies, or mandates, limit the discretion of individuals and agencies, or otherwise compel certain types of behavior. These policies are generally thought to be best applied when good behavior can be easily defined and bad behavior can be easily regulated and punished through fines or sanctions. An example of a fairly successful public regulatory policy is that of a highway speed limit.


Constituent

Constituent policies create executive power entities, or deal with laws. Constituent policies also deal with fiscal policy in some circumstances.


Redistributive

Policies are dynamic; they are not just static lists of goals or laws. Policy blueprints have to be implemented, often with unexpected results. Social policies are what happens 'on the ground' when they are implemented, as well as what happens at the decision making or legislative stage. When the term policy is used, it may also refer to: * Official government policy (legislation or guidelines that govern how laws should be put into operation) * Broad ideas and goals in political manifestos and pamphlets * A company or organization's policy on a particular topic. For example, the equal opportunity policy of a company shows that the company aims to treat all its staff equally. The actions the organization actually takes may often vary significantly from stated policy. This difference is sometimes caused by political compromise over policy, while in other situations it is caused by lack of policy implementation and enforcement. Implementing policy may have unexpected results, stemming from a policy whose reach extends further than the problem it was originally crafted to address. Additionally, unpredictable results may arise from selective or idiosyncratic enforcement of policy. Types of
policy analysis Policy analysis is a technique used in the public administration sub-field of political science to enable civil servants, nonprofit organizations, and others to examine and evaluate the available options to implement the goals of laws and elected ...
include: * Causal (resp. non-causal) * Deterministic (resp. stochastic, randomized and sometimes non-deterministic) * Index * Memoryless (''e.g.'', non-stationary) * Opportunistic (resp. non-opportunistic) * Stationary (resp. non-stationary) These qualifiers can be combined, so one could, for example, have a stationary-memoryless-index policy.


Notable schools

* Balsillie School of International Affairs * Blavatnik School of Government * Goldman School of Public Policy at the University of California Berkeley *
London School of Economics , mottoeng = To understand the causes of things , established = , type = Public research university , endowment = £240.8 million (2021) , budget = £391.1 mill ...
* King's College London * The University of Chicago Harris School of Public Policy * Harvard Kennedy School of Government * Hertie School of Governance * Munk School of Global Affairs and Public Policy * Norman Paterson School of International Affairs * Paul H. Nitze School of Advanced International Studies * Princeton School of Public and International Affairs * Sciences Po Paris *
University of Cambridge , mottoeng = Literal: From here, light and sacred draughts. Non literal: From this place, we gain enlightenment and precious knowledge. , established = , other_name = The Chancellor, Masters and Schola ...
*
University of Glasgow , image = UofG Coat of Arms.png , image_size = 150px , caption = Coat of arms Flag , latin_name = Universitas Glasguensis , motto = la, Via, Veritas, Vita , ...
*
University of Warwick , mottoeng = Mind moves matter , established = , type = Public research university , endowment = £7.0 million (2021) , budget = £698.2 million (202 ...
* Paris Nanterre University


Subtypes


Induction of policies

In contemporary systems of market-oriented economics and of homogeneous voting of delegates and decisions, policy mixes are usually introduced depending on factors that include popularity in the public (influenced via
media Media may refer to: Communication * Media (communication), tools used to deliver information or data ** Advertising media, various media, content, buying and placement for advertising ** Broadcast media, communications delivered over mass el ...
and education as well as by
cultural identity Cultural identity is a part of a person's identity, or their self-conception and self-perception, and is related to nationality, ethnicity, religion, social class, generation, locality or any kind of social group that has its own distinct cu ...
), contemporary economics (such as what is beneficial or a burden in the long- and near-term within it) and a general state of international competition (often the focus of geopolitics). Broadly, considerations include political competition with other parties and social stability as well as national interests within the framework of global dynamics. Policies or policy-elements can be designed and proposed by a multitude of actors or collaborating actor-networks in various ways. Alternative options as well as organisations and decision-makers that would be responsible for enacting these policies – or explaining their rejection – can be identified. "Policy sequencing" is a concept that integrates mixes of existing or hypothetical policies and arranges them in a sequential order. The use of such frameworks may make complex polycentric governance for the achievement of goals such as
climate change mitigation Climate change mitigation is action to limit climate change by reducing emissions of greenhouse gases or removing those gases from the atmosphere. The recent rise in global average temperature is mostly caused by emissions from fossil fuels bu ...
and stoppage of
deforestation Deforestation or forest clearance is the removal of a forest or stand of trees from land that is then land conversion, converted to non-forest use. Deforestation can involve conversion of forest land to farms, ranches, or urban area, urban ...
more easily achievable or more effective, fair, efficient, legitimate and rapidly implemented. Contemporary ways of policy-making or
decision-making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either r ...
may depend on exogenously-driven shocks that "undermine institutionally entrenched policy equilibria" and may not always be functional in terms of sufficiently preventing and solving problems, especially when unpopular policies, regulation of influential entities with vested interests, international coordination and non-reactive strategic long-term thinking and management are needed. In that sense, "reactive sequencing" refers to "the notion that early events in a sequence set in motion a chain of causally linked reactions and counter-reactions which trigger subsequent development". This is a concept separate to policy sequencing in that the latter may require actions from a multitude of parties at different stages for progress of the sequence, rather than an initial "shock", force-exertion or catalysis of chains of events. In the modern highly interconnected world, polycentric governance has become ever more important – such "requires a complex combination of multiple levels and diverse types of organizations drawn from the public, private, and voluntary sectors that have overlapping realms of responsibility and functional capacities". Key components of policies include command-and-control measures, enabling measures, monitoring, incentives and disincentives. Science-based policy, related to the more narrow concept of
evidence-based policy Evidence-based policy is an idea in public policy proposing that policy decisions should be based on, or informed by, rigorously established objective evidence. The implied contrast is with policymaking based on ideology, 'common sense,' anecd ...
, may have also become more important. A review about worldwide
pollution Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, the ...
as a major cause of death – where it found little
progress Progress is the movement towards a refined, improved, or otherwise desired state. In the context of progressivism, it refers to the proposition that advancements in technology, science, and social organization have resulted, and by extension w ...
, suggests that successful control of conjoined threats such as pollution, climate change, and biodiversity loss requires a
global Global means of or referring to a globe and may also refer to: Entertainment * ''Global'' (Paul van Dyk album), 2003 * ''Global'' (Bunji Garlin album), 2007 * ''Global'' (Humanoid album), 1989 * ''Global'' (Todd Rundgren album), 2015 * Bruno ...
, "formal
science Science is a systematic endeavor that Scientific method, builds and organizes knowledge in the form of Testability, testable explanations and predictions about the universe. Science may be as old as the human species, and some of the earli ...
–policy interface", e.g. to " inform intervention, influence research, and guide funding". Broadly, science–policy interfaces include both science in policy and science for policy.


Other uses of the term

* In enterprise architecture for systems design, policy appliances are technical control and logging mechanisms to enforce or reconcile policy (systems use) rules and to ensure accountability in
information systems An information system (IS) is a formal, sociotechnical, organizational system designed to collect, process, store, and distribute information. From a sociotechnical perspective, information systems are composed by four components: task, people ...
. * In
insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
, policies are contracts between insurer and insured used to indemnify (protect) against potential loss from specified perils. While these documents are referred to as policies, they are in actuality a form of
contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to ...
– see
insurance contract In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known ...
. * In
gambling Gambling (also known as betting or gaming) is the wagering of something of Value (economics), value ("the stakes") on a Event (probability theory), random event with the intent of winning something else of value, where instances of strategy (ga ...
, policy is a form of an unsanctioned lottery, where players purport to purchase ''
insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
'' against a chosen number being picked by a legitimate lottery. Or can refer to an ordinary numbers game * In
artificial intelligence Artificial intelligence (AI) is intelligence—perceiving, synthesizing, and inferring information—demonstrated by machine A machine is a physical system using Power (physics), power to apply Force, forces and control Motion, moveme ...
planning and ''reinforcement learning'', a policy prescribes a non-empty deliberation (sequence of actions) given a non-empty sequence of states. * In
debate Debate is a process that involves formal discourse on a particular topic, often including a moderator and audience. In a debate, arguments are put forward for often opposing viewpoints. Debates have historically occurred in public meetings, ac ...
, the term "policy" is slang for policy or cross-examination debate.


See also


Notes


References

* * * * * * * * * * * * * * *


Further reading

* *


External links

* * {{Authority control Politics by issue Decision-making