Policy

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A policy is a deliberate plan of action to guide decisions and achieve rational outcome(s). The term may apply to government, private sector organizations and groups, and individuals. Executive order (United States), privacy policy, and parliamentary rules of order are all examples of policy.

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, management, financial, and administrative mechanisms arranged to reach explicit goals.

Definitions of policy Definitions of policy and research done into the area of policy is frequently performed from the perspective of policies created by national governments, or public policy. Several definitions and key characteristics of policy have been identified within the framework of government policy. While many of these are broadly applicable to other organizations such as private companies or non-profit organizations, the government-focused origin of this work should be kept in mind.

According to William Jenkins in Policy Analysis: A Political and Organizational Perspective (1978), a policy is ‘a set of interrelated decisions taken by a political actor or group of actors concerning the selection of goals and the means of achieving them within a specified situation where those decisions should, in principle, be within the power of those actors to achieve’. Thus, Jenkins understands policy making to be a process, and not simply a choice.

According to Thomas Birkland in An Introduction to the Policy Process (2001), there is a lack of a consensus on the definition of policy. Birkland outlines a few definitions of policy (Table 1.3 on p. 21):

"The term public policy always refers to the actions of government and the intentions that determine those actions". -Clarke E. Cochran, et al.
"Public policy is the outcome of the struggle in government over who gets what". -Clarke E. Cochran, et al.
Public policy is "Whatever governments choose to do or not do". -Thomas Dye
"Public policy consists of political decisions for implementing programs to achieve societal goals". -Charles L. Cochran and Eloise F. Malone
"Stated most simply, public policy is the sum of government activities, whether acting directly or through agents, as it has an influence on the life of citizens". -B. Guy Peters

On the history of policy, Birkland wrote this:

{{quote|While the study of politics has a long history, the systematic study of public policy, on the other hand, can be said to be a twentieth century creation. It dates, according to Daniel McCool, to 1922, when political scientist Charles Merriam sought to connect the theory and practices of politics to understanding the actual activities of government, that is public policy.|(p.4) (see McCool, Daniel C. Public Policy Theories, Models, and Concepts: An Anthology. Englewood Cliffs, N.J.: Prentice Hall, 1995.)-->

Impact of policy Intended Effects The goals of policy may vary widely according to the organization and the context in which they are made. Broadly, policies are typically instituted in order to avoid some negative effect that has been noticed in the organization, or to seek some positive benefit.

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 provides an example of benefit-seeking policy. In recent years, the numbers of hybrid vehicles in California has increased dramatically, in part because of policy changes that provide USD $1,500 in tax credits as well as the use of HOV lanes to hybrid owners. In this case, the organization (state and/or federal government) created a positive effect (increased ownership and use of hybrid cars) through policy (tax breaks, benefits).

Unintended Effects Policies frequently have side effects or unintended consequences. 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, citizens are disincentivized to earn the money that is taxed. (See the Laffer curve)

The policy formulation process typically 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. Because of the nature of some complex adaptive systems such as societies and governments, it may not be possible to assess all possible impacts of a given policy.

Policy cycle In political science the policy cycle is a tool used for the analysing of the development of a policy item. It can also be referred to as a "stagist approach". One standardised version includes the following stages:

Agenda setting (Problem identification)

Policy formation

Decision-making

Policy implementation

Policy analysis and evaluation (continue or terminate)

An eight step policy cycle is developed in detail in The Australian Policy Handbook by Peter Bridgman and Glyn Davis:

Issue identification

Policy analysis

Policy instrument development

Consultation (which permeates the entire process)

Coordination

Decision

Implementation

Evaluation

The Bridgman & Davis model is heuristic and iterative.

Policy content Policies are typically promulgation through official written documents. Such documents have standard formats that are particular to the organization issuing the policy. While such formats differ in terms of their 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 is.
A 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
An effective date which indicates when the policy comes into force. Ex post facto law are rare, but can be found.
A responsibilities section, indicating which parties and organizations are responsible for carrying out individual policy statements. These responsibilities may include identification of oversight and/or governance structures.
Policy statements indicating the specific regulations, requirements, or modifications to organizational behavior that the policy is creating.

Some policies may contain additional sections, including

Background indicating the reasons and history that led to the creation of the policy, which may be listed as motivating factors
Definitions, providing clear and unambiguous definitions for terms and concepts found in the policy document.

Policy typology 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 policies 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 (financial aid), public education, highways, and public safety, or a professional organization's policy on membership training.

Regulatory policies 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 in situations where 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 Dana Leigh that of a speed limit.

Constituent policies Constituent policies create executive power entities, or deal with laws.

Miscellaneous policies 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.

There is often a gulf between stated policy (i.e. which actions the organization intends to take) and the actions the organization actually takes. 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 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 for example you could have a stationary-memoryless-index policy.

Types of policy

Communications and Information Policy
Domestic policy
Education policy
Economic policy
Energy policy
Environmental Policy
Foreign policy
Health policy
Housing policy
Human resource policies
Macroeconomic policy
Monetary policy
National defense policy
Population policy
Public policy (law)
Social policy
Transportation policy
Urban planning
Water policy

Other uses of the term policy

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.
In insurance, policies are contracts between insurer and insured used to Indemnity (protect) against potential loss from specified perils. While these documents are referred to as policies, they are in actuality a form of contract - see insurance contract.
In gambling, policy is a form of an unsanctioned lottery, where players purport to purchase insurance against a chosen number being picked by a legitimate lottery. Or can refer to an ordinary Numbers game
In artificial intelligence planning and reinforcement learning, a policy prescribes a non-empty deliberation (sequence of actions) given a non-empty sequence of states.