^{STUDYING POLICY DELIVERY SYSTEMS}

^{Dr. Frances Sandiford and Dr. Ed Rossmiller}

^{Rome, Italy}

^{This summary is based on a paper presented at the Agricultural Economics Society Conference, University of Newcastle-upon-Tyne, 27-30 March 1996. It reflects only part of the original text as time constraints as well as the particular interests of the audience necessitated a sharper and different focus on the paper's policy implementation aspects.}

^{Agricultural policy implementation: the policy delivery system}

^{There has been much discussion about the new agricultural policies that the CEECs need to introduce as part of their move towards market economies, and perhaps also with a view to membership of the EU or a regional trading block. In contrast, no systematic attention has been given by policy advisers to the question of policy implementation, given that many of the institutions, linkages and rules that formerly constituted the implementation process have been dismantled or disrupted. Our paper is concerned with agricultural policy implementation, as distinct from policy analysis, policy advice or policy making.}

^{The unit for studying agricultural policy implementation is the policy delivery system, which we define as being the total modality of implementing a given policy. The first question to be addressed is what constitutes an agricultural policy delivery system. Our definition includes the unique set of institutions, individuals, processes and rules that together deliver the benefits of the policy to a target group and enable control to be exercised to ensure adherence to the rules of access.}

^{As such, policy delivery systems are almost infinitely variable. Consider a couple of examples. Assume a policy objective of increasing farm incomes, and that the instrument selected is an import tax. The policy delivery system consists of border controls and tax collection, and the domestic market, which acts as the mechanism for transmitting the price effect to the farm gate. The extent to which the policy delivery system succeeds in achieving the policy objective will depend, amongst other things, on the extent to which the border controls are policed and the degree of price transmission by the market to the price received by farmers.}

^{Now assume the same objective of increasing farm incomes but through the provision of technical advice to improve agricultural productivity. This could be provided through a government extension agency, or by in-house technical experts (as was common on the large state and collective farms), or through commercial organizations or public institutions such as universities. The government could fund the advice in whole or in part, or not at all, but it does not have to deliver the service itself. The way in which the service is provided to achieve defined policy objectives constitutes the delivery system for that policy.}

^{Our understanding of policy delivery systems therefore encompasses all types of agricultural policies be they pricing policies or service provision, whether they involve public goods, private goods, or something in between. By looking at policy implementation as a delivery system, we are able to cope with the complexity and sheer diversity of agricultural policy implementation schemes.}

^{Studying policy delivery systems: the structure-conduct-performance paradigm}

^{We are suggesting a framework for structured thinking about policy delivery systems that can assist those involved in policy implementation in making their advice or decisions more relevant, workable and reliable. In order to structure our thinking about policy delivery systems, we take as our point of departure some of the ideas from the structure-conduct-performance approach to analyzing markets developed since the 1930s in the industrial organization literature. At its simplest, the market structure-conduct-performance paradigm attempts to evaluate market performance in the form of output and prices in relation to firms' conduct (behaviour) and the market structure of the industry (which are themselves inter-related). Adaptation of the paradigm from a market focus to the analysis of policy delivery systems necessitates a rethinking of the concepts of structure, conduct and performance; we also introduce an exogenous reference point: the policy objective. Our framework must therefore allow for the definition of policy objectives, a description of system structure, an analysis of system conduct, and an assessment of the system's performance.}

^{Defining policy objectives}

^{The first stage in using the structure-conduct-performance framework to study a particular policy delivery system is to obtain a working and workable definition of the policy objective, and to obtain the government's agreement to that definition. Defining the policy objective is not a one-off act; rather it is an iterative and interactive process. The definition needs to be questioned throughout the analysis. If something does not fit, we need to think about it and retrace our steps - again and again if necessary.}

^{Describing structure}

^{The structure component of the analysis focuses on the system through which the policy is implemented to transfer the benefits from wheresoever they derive to the hands of the targeted recipients. It is both a description of the policy delivery system - institutions, instruments and processes - and an analysis of the functions that are apparently intended to be performed at each point and by each component of the system. We say "apparently intended" because one must take a skeptical approach given the potential for hidden agendas and private interests in the working of the system. The structure component of the analysis is heavily descriptive and should reflect the system as it is apparently intended to be, and to operate. On the basis of the findings, a flow diagram can be prepared.}

^{Analyzing conduct}

^{The conduct (or behaviour) component of the analysis covers how the institutions and individuals in the system operate to ensure and monitor compliance and effect delivery of the benefits to the targeted recipients. Or how they might be operating, given the opportunities, pressures and constraints, to deliver outcomes that are inconsistent with the original objectives of the policy. This is an analysis of the way the system works in practice - the actual as opposed to intended functions performed, where and how private or extraneous interests and activities affect the way the system works.}

^{The conduct component is strongly investigative and analytical. It covers the same points as the structure component, but from a different standpoint. The aim is to lay out how the system really works as opposed to how it is apparently intended to work - to pinpoint where in the system and how, with what consequences for outcomes, actual conduct or behaviour affects system operation. On the basis of the findings of the conduct component, a modified flow diagram can be prepared to illustrate how and where the apparent intentions and the real world diverge.}

^{Assessing performance}

^{Finally, the performance component of the analysis is an assessment of how well the policy delivery system meets the original objective of the policy in terms of delivering the scheduled benefits to the targeted recipients. We propose four criteria for this assessment of performance: effectiveness, efficiency, enforceability, and equity, each of which is elaborated below. A note of caution: these criteria are not tidy categories of mutual exclusivity; they overlap and interact. The points that need to be examined under each heading will differ from case to case, as will the relative importance of each criterion.}

^{¨ Effectiveness:}

^{Doing the right thing. This is the top-level criterion in that it is the overall measure of whether the policy objective is being achieved, which is why agreement about the policy objective is so vital. Effectiveness means that the system operates in such a way as to be successful in producing the desired result, i.e., it is capable of delivering the intended benefits to the targeted recipients and, indeed, does so. A necessary, but not sufficient, condition for effectiveness is that the system is capable of delivery. To be fully effective, the system must actually deliver. The other three performance criteria - efficiency, enforceability and equity - are second-level criteria that jointly contribute to overall effectiveness.}

^{¨¨ Efficiency:}

^{Doing the thing right. This criterion looks at the cost of delivering the policy to the targeted recipients. It is contingent upon effectiveness: what if the system spends the benefits but the targeted beneficiaries do not receive them? In this construct, efficiency has no real meaning if effectiveness is not fulfilled. In other words, does it mean anything if the wrong thing is done right?}

^{¨¨ Enforceability:}

^{The ability to make sure that the benefits reach the targeted beneficiaries, non-complying or unintended beneficiaries are excluded, and that benefits are not creamed off by intermediaries. Enforceability is not the same as enforcement, but is a pre-condition for it. Given enforceability, non-enforcement can take place for a number of reasons.}

^{¨¨ Equity:}

^{Ensuring consistent and impartial access under the rules to the benefits across the targeted recipients. Again, equity must be seen in the context of the objective of the policy itself. Equity is the assurance of equal opportunity to access to the benefits under the rules. If the potential beneficiary qualifies under the rules of the game access to the benefits is assured, if not, access is denied.}

^{This interpretation of equity is concerned with the impartiality and consistency of the policy deliverer. From the point of view of the intended beneficiary, there is another equity consideration: the costs of access.}

^{Assessing performance is obviously a complicated process, and will produce a great deal of information that needs to be assimilated purposively. We therefore need to be quite clear about what we want the process to lead to. This depends on the reason for the study being undertaken in the first place. One of the following three is probable:}

^{× There are grounds for believing that the effectiveness of the system is inadequate, and what is required are recommendations for improving the working of the system, assuming that we find it to be capable of improvement, or for setting up an alternative system.}

^{× The government wishes to change the policy instruments for reasons unconnected with the effectiveness of the delivery system, e.g., to comply with GATT/WTO commitments or to reduce the costs of the policy itself, and wants to know if an existing policy delivery system can be used.}

^{× For ideological or budgetary reasons, changes to an existing policy delivery system are under consideration, e.g., the privatization of a parastatal marketing organization or a reduction in the number of public sector personnel who provide extension services.}

^{Any of these reasons could be applicable in the CEECs. The extensive structural and institutional changes in the agricultural sectors of the transition economies - not just as result of agricultural policies - have caused serious problems for agricultural policy implementation. We have proposed a way of looking at the question systematically with a view to improving the performance of existing policy delivery systems, and to designing alternative systems.}