Abstract
Policy assessment from an institutional perspective follows the concept of institutions for sustainability, which is defined as the necessary institutional structure capable of delivering economic, social, and environmental sustainability objectives. Thus, the effectiveness of a policy and the cost-effectiveness of its implementation depend to a large extent on the degree of compatibility between this policy option and the respective institutional context. However, not least because institutions usually relate to a great diversity of situations, the state-of-the-art in institutional economics offers hardly any standardised procedures for institutional analysis that can easily be linked to environmental and agricultural models widely used for policy impact assessment. To assess the compatibility between policy options and various institutional contexts a formalised methodology has been developed that provides for an institutional dimension in modelling: the ‘Procedure for Institutional Compatibility Assessment’ (PICA). PICA comprises four distinct steps: first, policy options are clustered according to the type of intervention (regulatory, economic, and advisory), the area of intervention (hierarchy/bureaucracy, market, and self-organised network), possibly induced property rights changes, and the attributes of the natural resource(s) addressed. This classification allows identifying the generic structure of a policy option. Second, each policy cluster is linked to specific sets of crucial institutional aspects (CIA) that may constrain or foster policy implementation. In the third step, institutional indicators are used to evaluate the potential of a respective CIA. Forth, combination of the identified CIA and assessment of their relative explanatory power leads to statements about the probable effectiveness of a policy option. The mainly qualitative PICA outputs are arranged in thematic categories of institutional compatibility. Following an overview about the state-of-the-art in approaches for policy assessment, this contribution will focus on the PICA methodology. In particular, the four distinct steps are elaborated on using a core element of the EU Nitrate Directive as a concrete policy example to illustrate the procedure. Finally, some ideas will be presented how PICA serves as a complementary tool for pre- and post-model analysis of environmental and agricultural models for policy impact assessment.
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Notes
- 1.
We conceive policy options as (sets of) policy instruments that a policy maker intends to implement to reach a (set of) policy objectives; i.e., the policy instruments are not implemented at the time of the assessment.
- 2.
Institutions do also define certain organisations, but these organisations are best thought of as not being institutions, but as being defined by institutions (Bromley 1989: 43).
- 3.
It should be noted that there is no single or universal institutional arrangement that is linked to a specific policy and that enables a specific policy option to become effective regardless where it is (supposed to be) implemented. Rather, the concrete set of institutions most conducive for policy implementation is likely to vary among countries and regions.
- 4.
Governance structures are the organisational solutions for making rules (institutions) effective, i.e., they are necessary for guaranteeing the rights and duties and their use in co-ordinating transactions (e.g., Ostrom 1990).
- 5.
An initial list of 40 crucial institutional aspects linked to common policy types in agriculture, environment, and rural development has been compiled in the frame of the SEAMLESS project. In this chapter only selected crucial institutional aspects will be introduced. The complete list can be found in Schleyer et al. (2007a).
- 6.
Institutional indicators are here defined as variables and proxies that are used as input to the institutional analysis within PICA. They do not represent the results and output of the institutional analysis.
- 7.
About 100 institutional indicators have been compiled in the frame of the SEAMLESS project (Schleyer et al. 2007a).
- 8.
The PICA expert team is part of the SEAMLESS expert team that is carrying out the policy assessment - on behalf of the policy maker - using SEAMLESS-IF.
- 9.
Please note that in general all types of intervention can be induced by public as well as private actors. However, while typical applications of PICA would rather address policy options to be induced by public actors, institutional compatibility assessments using PICA could also be carried out for policies induced by private actors.
- 10.
Of course, some economic policies, such as agri-environmental schemes, are also voluntary in character since farmers can choose to participate in those schemes, or not. In contrast, in this category, the term ‘voluntary’ refers to policies that motivate voluntary actions or behavioural changes of actors without direct financial incentives or regulations, i.e., for example, by convincing actors using various kinds of information materials.
- 11.
While in markets (repeated) economic exchange is based on voluntary bilateral agreements between individuals (e.g., auctions, stock markets, etc.), an authority on a higher level compulsorily selects economic action in hierarchies (e.g., state agencies, but also within private firms).
- 12.
The category complex resource system refers to resource systems with many externalities involved (e.g., wetlands). Here, a policy is targeting the ‘performance’ of the resource system as a whole, rather than single components or resources.
- 13.
However, national laws to implement the EU Nitrate Directive may be complemented with various forms of compensation schemes that ease the burden for some stakeholders in general, or in selected areas, for limitations in nitrate application that are beyond what is legally required.
- 14.
We do not claim that the CIA presented here are indeed the most relevant crucial institutional aspects related to the selected core element of the EU Nitrate Directive. Yet, we deem them to be reasonably relevant and sufficiently plausible since they are based on the extensive literature review mentioned above and on discussions within the PICA group.
- 15.
Please note that this column will contain specific assumptions on links between indicator, CIA, and policy option when actually running PICA. It will be filled by the PICA expert team after discussing the relevance and sufficiency of available indicators for evaluating the identified CIA with respect to the concrete policy option. This process is also likely to produce a restricted (smaller) list of those institutional indicators related to a respective CIA that can be linked meaningfully with the policy option under scrutiny.
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Theesfeld, I., Schleyer, C., Hagedorn, K., Callois, JM., Aznar, O., Olsson, J.A. (2010). The Institutional Dimension in Policy Assessment. In: Brouwer, F., Ittersum, M. (eds) Environmental and Agricultural Modelling. Springer, Dordrecht. https://doi.org/10.1007/978-90-481-3619-3_3
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