Understanding Public Policy: Theories and Issues 2nd edition Paul Cairney Chapter 4 Bounded Rationality and the Psychology of Policymaking Key themes of this chapter ‘Bounded rationality’ describes the limits to gathering and processing policy-relevant information. It suggests that ‘evidence based policymaking’ is a misleading ideal. Policymakers need to find ways to ignore most evidence. They use cognitive shortcuts to gather enough evidence and make what they believe to be ‘good enough’ choices. Classic debates examined if bounded rationality would, and should, produce incrementalism in political systems. Modern theories focus more on ‘fast thinking’ and its potential to produce radical policy change The Narrative Policy Framework (NPF) describes actors telling stories to set the agenda and influence policy change Social Construction and Policy Design (SCPD) shows how policymakers use emotion and social stereotypes to reward some populations and punish others Chapter 3 suggests that some actors are powerful because they can exploit the ways in which other people think. Therefore, studies of power link strongly to studies in psychology about the cognitive ‘biases’ on which all people rely. In a complex world beyond our understanding, we all have to rely on efficient ways of thinking, ignoring almost all information available to us, to allow us to make choices decisively (Gigerenzer, 2001). Cognitive shortcuts can be described provocatively as ‘rational’, when we seek systematic methods to identify the best information, and ‘irrational’, when we rely on gut instinct and emotion to act almost instantly (Cairney and Kwiatkowski, 2017). However, the use of emotion and morality to take care of one’s loved ones without weighing up the costs and benefits is perhaps the most reasonable action of all! A more relevant worry is that cognitive shortcuts leave us vulnerable to error and manipulation. Policymakers are no exception to this problem. 1 To understand policymaking, policy studies compare the classic concept ‘comprehensive rationality’ with bounded rationality in the real world. Comprehensive rationality is an ideal-type, or unrealistic simplification of reality that we can use to explore what really happens. For Comprehensive rationality – an ideal type of decision making in example, it is not realistic to expect which policymakers translate their policymakers to (a) possess the organizational values and aims into consistent and cognitive capacity to gather and process policy choices following a all information relevant to their decisions then comprehensive study of all choices (b) make clear, consistent, and well-ranked and their effects. choices. Rather, they face bounded rationality, Bounded rationality – a more in which their possession and grasp of realistic model which identifies the factors – such as uncertain aims and evidence, and their ability to make and limited information – that undermine implement consistent policy choices, is comprehensive rationality. limited. They have to rely on cognitive and organisational shortcuts. Even though it is an impossibility, comprehensive rationality also seems to be an ideal to which many people aspire. Many advocates of ‘evidence based policymaking’ seem to criticize the need for policymakers to ignore most information when they make decisions. Or, they display a passionate objection to any ‘irrational’ means to do so (Cairney, 2016a)! More broadly, comprehensive rationality sums up a common sense view of how democracies should operate: elected policymakers employ reason to identify problems and clarify their aims, produce and process evidence comprehensively to assess the societal costs and benefits of solutions, use this evidence to make and legitimize their choices, and evaluate policy success after a comprehensive search for evidence (Cairney, 2019a). This double-ideal is what makes policymaker psychology and the debate on ‘incrementalism’ (Box 4.2) so interesting. It prompts us to think about the effect of bounded rationality on system-wide policymaking and what we should do about it. Classic accounts described different ways to adjust to bounded rationality. Simon focuses on the need for policymaking organisations to ‘satisfice’, combining relatively systematic searches for information with efficient procedural shortcuts to reach an acceptable proximity to the comprehensive ideal. However, when discussing the nature of policymaking systems, Lindblom appears to promote the practical and normative value of departing from the ideal of comprehensive rationality. Incrementalism suggests that a good strategy for boundedly rational policymakers with limited policymaking resources is to make a succession of incremental changes to public policy based on the lessons of past decisions. In a pluralist political system, it makes sense to limit information searches only to politically feasible options, learn from trial-and-error, and not depart radically from decisions based on a previous consensus (compare with Chapter 3 on pluralism). Modern policy theories add two profound insights. First, many theories link major 2 policy change to bounded rationality (or they identify inertia that is not caused by pluralism). For example, punctuated equilibrium theory identifies incrementalism punctuated by rapid and profound shifts of policy (Chapter 9). Second, theories identify new normative issues that arise from the use and abuse of cognitive shortcuts. In this chapter, the Narrative Policy Framework identifies the ability of actors to tell stories to influence their audience. Further, Social Construction and Policy Design shows how policymakers draw on their own biases, and exploit social stereotypes, to make quick choices that reward some populations and punish others. Such responses to bounded rationality produce manipulative politics and ‘degenerative’ political systems, rather than consensus-driven incrementalism. Overall, modern theories suggest that advances in science and information technology have not solved the problem of bounded rationality. Instead, politics and power will always matter. Comprehensive and bounded rationality A focus on comprehensive rationality prompts us to question our assumptions about the power of the ‘centre’ to cause policy change: Do individual actors at the ‘top’ have the ability to research and articulate a series of consistent policy aims, then make sure that they are carried out? Can an organization act in the same manner as a ‘rational’ individual? Comprehensive rationality suggests that elected policymakers seek to translate their values into policy, aided by organizations which operate in a ‘logical, reasoned and neutral way’ (John, 1998: 33). The model includes a series of assumptions: 1 Organizations can separate values (required by policymakers to identify their aims) from facts (required by organizations to assess the best way to achieve those aims). 2 Organizations and policymakers can produce consistent policy preferences, and rank them, to help maximize societal gain (in the same way that an individual ranks preferences to help ‘maximize utility’). 3 Policy is made in a linear fashion, as in a policy cycle. First, policy aims are identified in terms of the values of the policymaker. Second, all means to achieve those aims are identified. Finally, the best means are selected. There are clear-cut stages to the process – such as between agenda-setting (identifying aims), formulation (identifying choices and making decisions) and implementation (carrying them out). 4 Analysis of the decision-making context is comprehensive. All relevant factors and possibilities have been explored, and all theories regarding how the policy process works have been considered (Simon, 1976; Lindblom, 1959; Jordan and Richardson, 1987: 9–10; John, 1998: 33; Hill, 2005: 146). 3 Since this is an idealized version of the policy process, the assumptions are deliberately unrealistic. Most approaches begin their analysis by identifying the limitations to comprehensive rationality and the presence of bounded rationality. First, it is impossible to separate facts from values in such an artificial way. Simon (1983: 8) argued that the best way to demonstrate this point is to read the alleged ‘facts’ in Hitler’s Mein Kampf (see also Brinkmann, 2008; Douglas, 2009; Etzioni, 1967: 386). More generally, the cause of policy problems is always subject to interpretation and debate, and there is no objective way to evaluate the success of a policy solution (McConnell, 2010). Second, policymakers have multiple, and often unclear, objectives which are difficult to rank in any meaningful way. Therefore, they tend to pursue a small number of those aims which command their attention at any one time. Policy aims can also be contradictory: choosing a policy to address aim A may mean undermining a policy to address aim B, producing clear winners and losers from the policy process. These problems are multiplied when extended to organizations. Governments contain a mass of organizations pursuing policy aims relatively independently of each other, with little regard to the idea of centralized and ranked preferences or the trade-offs in policy choices (there is no ‘holistic’ or ‘joined-up government’). Third, the policy process is not linear and it is difficult to separate the policy cycle into discrete stages. The ‘garbage can’ model and ‘multiple streams’ analysis (Chapter 11) present the most significant departure from an assumption of linearity, suggesting that three processes