Wednesday, November 30, 2016

Decision making on complex public policy challenges

The demonetisation and its aftermath has raised questions about the haste associated with it and the lack of adequate planning to meet the contingencies. A friend asked whether it was possible at all to carry out such decisions in a planned and pre-announced manner. 

I would believe that there are broadly two ways of bringing about deep-seated changes involving decisions which are politically sensitive and have complex operational details (like shrink the informal sector, reform critical regulatory institutions, reshape urban governance structures, change primary health care systems, administrative reforms, electoral finance etc). 

1. Carry out extensive stakeholder consultations, mobilise support among them, prepare a comprehensive plan covering all dimensions, elaborate operational issues to the last detail, and then roll-out the changes in a predictable environment.

2. Identify an important element of the reform process (based on political and administrative expediencies) and bite the bullet. Hope that it would generate the momentum for change (create conditions or ripen the moment for wholesale change). In due course of time, intervene strategically and opportunistically with all the other elements of the comprehensive plan. 

The first is a neat, linear and logical approach, whereas the second is by definition messy, ad-hoc, and iterative. I am increasingly inclined to the view that, especially on deep-seated changes, the former would most likely overwhelm the political and bureaucratic systems (albeit for different but very compelling reasons) and lead to decision paralysis. It's just that there are too many bells and whistles associated with such comprehensive plans that they are most likely to run into the constraints of political acceptability, financial and other resources, administrative capacity, and mobilisation of entrenched interests. 

In the circumstances, I feel that a more prudent approach may be to identify a totemic element of the implementation plan that can rally the troops, wait for an opportunistic political moment, intervene in a manner that it creates a momentum, have a very committed and nimble team in place to respond swiftly to the emergent problems, and then chip in with all the other elements of the plan. 

The risk with the latter approach is that we identify the wrong elements, intervene at an inappropriate time, and fail to follow up with other elements. The risk with the failure to follow-up is, in particular, very high. If the intervention fails, everyone becomes risk-averse and would anyway be reluctant to follow-up with other elements. If it succeeds, the supporters are likely to be carried away by the success and lose focus on the job ahead. 

The demonetisation may have complied with all the first three parts of this approach, and now awaits  the response team to act swiftly and unveiling of the other elements of the comprehensive plan. Given the rising discontent, it may be necessary to unveil all the other elements without waiting too long.

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