Rational planning model

Verifying, defining & detailing the problem (problem definition, goal definition, information gathering). This step includes recognizing the problem, defining an initial solution, and starting primary analysis. Examples of this are creative devising, creative ideas, inspirations, breakthroughs, and brainstorms.

The very first step which is normally overlooked by the top level management is defining the exact problem. Though we think that the problem identification is obvious, many times it is not. When defining the problem situation, framing is essential part of the process. With correct framing, the situation is identified and possible previous experience with same kind of situation can be utilized. The rational decision making model is a group-based decision making process. If the problem is not identified properly then we may face a problem as each and every member of the group might have a different definition of the problem.

This step encloses two to three final solutions to the problem and preliminary implementation to the site. In planning, examples of this are Planned Units of Development and downtown revitalizations.

This activity is best done in groups, as different people may contribute different ideas or alternative solutions to the problem. Without alternative solutions, there is a chance of arriving at a non-optimal or a rational decision. For exploring the alternatives it is necessary to gather information. Technology may help with gathering this information.

Evaluative criteria are measurements to determine success and failure of alternatives. This step contains secondary and final analysis along with secondary solutions to the problem. Examples of this are site suitability and site sensitivity analysis. After going thoroughly through the process of defining the problem, exploring for all the possible alternatives for that problem and gathering information this step says evaluate the information and the possible options to anticipate the consequences of each and every possible alternative that is thought of. At this point optional criteria for measuring the success or failure of the decision taken needs to be considered. The rational model of planning rest largely on objective assessment.

This step comprises a final solution and secondary implementation to the site. At this point the process has developed into different strategies of how to apply the solutions to the site.

Based on the criteria of assessment and the analysis done in previous steps, choose the best solution generated. These four steps form the core of the Rational Decision Making Model.

This step includes final implementation to the site and preliminary monitoring of the outcome and results of the site. This step is the building/renovations part of the process.

Modify future decisions and actions taken based on the above evaluation of outcomes.[3]

As illustrated in Figure 1, rational policy analysis can be broken into 6 distinct stages of analysis. Step 2 highlights the need to understand which factors should be considered as part of the decision making process. At this part of the process, all the economic, social, and environmental factors that are important to the policy decision need to be identified and then expressed as policy decision criteria. For example, the decision criteria used in the analysis of environmental policy is often a mix of —

• Ecological impacts — such as biodiversity, water quality, air quality, habitat quality, species population, etc.
• Economic efficiency — commonly expressed as benefits and costs.
• Distributional equity — how policy impacts are distributed amongst different demographics. Factors that can affect the distribution of impacts include location, ethnicity, income, and occupation.
• Social/Cultural acceptability — the extent to which the policy action may be opposed by current social norms or cultural values.
• Operational practicality — the capacity required to actually operationalize the policy.
• Legality — the potential for the policy to be implemented under current legislation versus the need to pass new legislation that accommodates the policy.
• Uncertainty — the degree to which the level of policy impacts can be known.[11]

Some criteria, such as economic benefit, will be more easily measurable or definable, while others such as environmental quality will be harder to measure or express quantitatively. Ultimately though, the set of decision criteria needs to embody all of the policy goals, and overemphasising the more easily definable or measurable criteria, will have the undesirable impact of biasing the analysis towards a subset of the policy goals.[12]

The process of identifying a suitably comprehensive decision criteria set is also vulnerable to being skewed by pressures arising at the political interface. For example, decision makers may tend to give "more weight to policy impacts that are concentrated, tangible, certain, and immediate than to impacts that are diffuse, intangible, uncertain, and delayed."^8. For example, with a cap-and-trade system for carbon emissions the net financial cost in the first five years of policy implementation is a far easier impact to conceptualise than the more diffuse and uncertain impact of a country's improved position to influence global negotiations on climate change action.

Displaying the impacts of policy alternatives can be done using a policy analysis matrix (PAM) such that shown in Table 1. As shown, a PAM provides a summary of the policy impacts for the various alternatives and examination of the matrix can reveal the tradeoffs associated with the different alternatives.

Table 1. Policy analysis matrix (PAM) for SO2 emissions control.

Once policy alternatives have been evaluated, the next step is to decide which policy alternative should be implemented. This is shown as step 5 in Figure 1. At one extreme, comparing the policy alternatives can be relatively simple if all the policy goals can be measured using a single metric and given equal weighting. In this case, the decision method is an exercise in benefit cost analysis (BCA).

At the other extreme, the numerous goals will require the policy impacts to be expressed using a variety of metrics that are not readily comparable. In such cases, the policy analyst may draw on the concept of utility to aggregate the various goals into a single score. With the utility concept, each impact is given a weighting such that 1 unit of each weighted impact is considered to be equally valuable (or desirable) with regards to the collective well-being.

Weimer and Vining also suggest that the "go, no go" rule can be a useful method for deciding amongst policy alternatives^8. Under this decision making regime, some or all policy impacts can be assigned thresholds which are used to eliminate at least some of the policy alternatives. In their example, one criterion "is to minimize SO2 emissions" and so a threshold might be a reduction SO2 emissions "of at least 8.0 million tons per year". As such, any policy alternative that does not meet this threshold can be removed from consideration. If only a single policy alternative satisfies all the impact thresholds then it is the one that is considered a "go" for each impact. Otherwise it might be that all but a few policy alternatives are eliminated and those that remain need to be more closely examined in terms of their trade-offs so that a decision can be made.

To demonstrate the rational analysis process as described above, let’s examine the policy paper “Stimulating the use of biofuels in the European Union: Implications for climate change policy” by Lisa Ryan where the substitution of fossil fuels with biofuels has been proposed in the European Union (EU) between 2005–2010 as part of a strategy to mitigate greenhouse gas emissions from road transport, increase security of energy supply and support development of rural communities.

Considering the steps of Patton and Sawicki model as in Figure 1 above, this paper only follows components 1 to 5 of the rationalist policy analysis model:

1. Defining The Problem – the report identifies transportation fuels pose two important challenges for the European Union (EU). First, under the provisions of the Kyoto Protocol to the Climate Change Convention, the EU has agreed to an absolute cap on greenhouse gas emissions; while, at the same time increased consumption of transportation fuels has resulted in a trend of increasing greenhouse gas emissions from this source. Second, the dependence upon oil imports from the politically volatile Middle East generates concern over price fluctuations and possible interruptions in supply. Alternative fuel sources need to be used & substituted in place of fossil fuels to mitigate GHG emissions in the EU.
2. Determine the Evaluation Criteria – this policy sets Environmental impacts/benefits (reduction of GHG’s as a measure to reducing climate change effects) and Economical efficiency (the costs of converting to biofuels as alternative to fossil fuels & the costs of production of biofuels from its different potential sources) as its decision criteria. However, this paper does not exactly talk about the social impacts, this policy may have. It also does not compare the operational challenges involved between the different categories of biofuels considered.
3. Identifying Alternative Policies – The European Commission foresees that three alternative transport fuels: hydrogen, natural gas, and biofuels, will replace transport fossil fuels, each by 5% by 2020.
4. Evaluating Alternative Policies – Biofuels are an alternative motor vehicle fuel produced from biological material and are promoted as a transitional step until more advanced technologies have matured. By modelling the efficiency of the biofuel options the authors compute the economic and environmental costs of each biofuel option as per the evaluation criteria mentioned above.
5. Select The Preferred Policy – The authors suggest that the overall best biofuel comes from the sugarcane in Brazil after comparing the economic & the environmental costs. The current cost of subsidising the price difference between European biofuels and fossil fuels per tonne of CO₂ emissions saved is calculated to be €229–2000. If the production of European biofuels for transport is to be encouraged, exemption from excise duties is the instrument that incurs the least transactions costs, as no separate administrative or collection system needs to be established. A number of entrepreneurs are producing biofuels at the lower margin of the costs specified here profitably, once an excise duty rebate is given. It is likely that growth in the volume of the business will engender both economies of scale and innovation that will reduce costs substantially.[13]