How to confront tradeoffs in policy analysis

In public policy analysis, there is a concept called “dominance”—when one policy is better than all others and the status quo on the dimensions of effectiveness, efficiency, equity, and other relevant criteria. Unfortunately, dominance rarely occurs. 

This is why Eugene Bardach lists “confront the trade-offs” as his sixth step in his “eightfold path” of public policy analysis. 

What guidance does Bardach give an analyst for confronting tradeoffs? Analysts have a few tools they can use to help sort out seemingly incommensurable tradeoffs inherent in policymaking. 

Analysts must confront trade-offs by having a focus on outcomes, not on alternatives. It is not enough to say “we have a trade-off between establishing a carbon tax or putting a cap-and-trade program in place.” The policy analyst must focus on outcomes (such as carbon tons abated, dollars of economic impact, jobs created or lost) that give policymakers direction when crafting policy.

Ultimately, in order for a policy analyst to help a policymaker confront trade-offs, she needs to establish commensurability. This can be done by monetizing outcomes, which can utilize break-even analysis when the value of one outcome is unknown. The policymaker should be trying to reduce discrepancies, this means framing trade-offs “crisply”: trying to establish magnitudes of tradeoffs so policymakers understand what they are trading off against with one policy versus another.

A way to think about trade-offs in a way that helps a policymaker is to remember that trade-offs are about increments. This means understanding that if two criteria are quantified, that one can be put in terms of another. For instance, if a given policy option will abate 10,000 metric tons of carbon and cost 100 jobs and another policy option will abate 12,000 metric tons of carbon and cost 150 jobs, the former policy is better if you are looking for the most “efficient” policy in terms of job loss but the latter is more “effective” at reducing carbon emissions. The relative value of carbon abatement versus job retention would drive the policy choice for the policymaker.

This process can be made easier with an outcomes matrix. By allowing a policymaker to look at a table that shows what the different outcomes of a policy are across different dimensions, giving the policymaker a tool for conceptualizing tradeoffs inherent in making a given policy decision.

In a case in which outcomes are difficult to quantify, sometimes it is better to put them in terms of the better and the worse. This means ranking policy options rather than rating them. This can be a useful exercise when the budget constraint is uncertain and gives policymakers a general idea of which policy is better than the other.

Tradeoffs are inherent in public policymaking. Policymaking forces policymakers to confront tradeoffs between economic growth, equity, effectiveness, administrative capability, legal feasibility, and political feasibility. The policymaker can only illuminate so much of this policymaking process for the policymaker, but ultimately she has the tools to make the process of confronting trade-offs easier for a policymaker.