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Discuss the relevance of Neo-Institutional theory with reference to the institutions of Parliament and CabinetThis essay is concerned with the impact of institutions of the state on the policy process. Key influences in the Neo-Institutional approach to the study of policy have been the importation of ideas from organisational sociology and a growing recognition of the need to employ historical analysis to trace the evolution of policy over time. I intend, in this essay to examine Neo-Institutionalist theory, and discuss it?s relevance with reference to the institutions of Parliament and the Cabinet. Two points though that should be noted are that institutions are seen as central to one of the main policy theories, and that they are seen as ?makers and shapers? of policy.

Attempting though, to understand the relevance and impact institutions have on public policy without defining the terms ?public policy? and ?institutions? would be imprudent. Like so many concepts and ideas in politics, there are many competent definitions, but despite their variations they all agree on certain key aspects. They agree that polices result from decisions made by government and that decisions by governments to do nothing are just as much policy as are decisions to do something. William Jenkins? definition of public policy is as ?a set of interrelated decisions taken by a political actor or group of actors concerning the selection of goals and the means of achieving them within a specified situation where those decisions should, in principle, be within the power of those actors to achieve.? In this essay I will define institutions narrowly, like Howlett and Ramesh, as ?the structures and organisations of the state, society and the international system?

With these definitions we can go on to consider the role of institutions in influencing the policy process.

Unsurprisingly, there are a number of approaches to studying Public Policy. Howlett and Ramesh have created a two-dimensional framework, with one being a distinction between deductive and inductive approaches to the study of Public Policy, and the other asking whether the fundamental unit of analysis is the individual, the group, or the institution. Deductive theories begin from a relatively small number of basic postulates or assumptions accorded to universal status and then apply these assumptions to the study of specific phenomena. Inductive theories, on the other hand, begin with observations of specific phenomena and attempt to derive generalisations from these observations which can be combined into a more general theory.

The Neo-Institutional approach to policy is one of three major deductive theories, the others being Public Choice and Class Theories. Essentially, the approach recognises the limits of individual and group-based theory to deal with political phenomena. Neo-Institutionalism is a relatively new term, coined by March and Olsen in the mid-1980?s, used to distinguish the approach from traditional institutionalism, in legal-historical studies which merely described political institutions.

Guy Peters states that old Institutionalism was deceptive, while Neo-Institutionalism is;

?Characterised by an explicit concern with theory development? [It] seeks to explain [institutions]? as a ?dependent variable?, and more importantly, to explain other phenomena with institutions as the ?independent variables? shaping policy and administrative behaviour? Further, contemporary institutional analysis looks at actual behaviour rather than only as the formal, structural aspects of institutions.?

March and Olsen explain their view of the importance of the institutional approach as follows:

?Political democracy depends not only on economic and social conditions but also on the design of the political institutions. The bureaucratic agency, the legislative committee, and the appellate court are arenas for contending social forces, but they are also collections of standard operating procedures and structures that define and defend interests. They are political actors in their own right.”

It grew out of expressed concerns about the ability of existing deductive theories (Public Choice, Class Theories et cetera) to deal with the question of why political, economic, and social institutions like governments, firms or churches existed at all.

According to March and Olsen, Neo-Institutionalism emphasises the autonomy of political institutions from the society in which they exist; the organisation of governmental institutions and its effects on what the state does; the rules, norms and symbols governing political behaviour; and the unique patterns of historical development.

The Neo-Institutionalist approach, (also referred to as the New Economics of Organisation) applied to markets, asks why we have firms (instead of input suppliers simply contracting with one another on an individual basis), when would we see out-sourcing as opposed to in-house production of inputs, why are commercial contracts structured the way they are, and so on. In the political realm, in the perspective, institutions are significant because they constitute and legitimise political actors and provide them with consistent behaviourally rules, conceptions of reality, standards of assessment, affective ties, and endowments, and thereby with a capacity for purposeful action. While acknowledging the role of individuals and groups in the policy process, preferences and capacities are usually understood in the context of the society in which the state is embedded. It is not opposed to the public choice idea of self-interested individuals. But it asks how that self-interest leads to cooperation in institutional design. It places great emphasis on the transaction in economic and political life ? whether a commercial contract, an informal economic arrangement, vote-trading by politicians ? and the costs in arranging, monitoring, and enforcing these transactions.

Applied to government, it tries to explain the structure of constitutions, law, international treaties, and the structure of bureaucracy.

The Policy making process is one which usually involves elected politicians appointed civil servants and the representatives of pressure groups who are able to get in on the action. The purer forms of rational decision making theory seem to want civil servants to be dominant. The incrementalist critique attacks this perspective, which excludes democratically elected officials, as unrealistic and not necessarily productive of better decisions.

Howlett and Ramesh believe that both actors (individuals, groups, classes and states) and institutions play a crucial role on the policy process, even though one may be more important than the other in specific instances. ?Actors participating in the policy process no doubt have their own interests, but the manner in which they interpret and pursue their interests, and the outcomes of their efforts, are shaped by institutional factors?

The United Kingdom?s Parliament is one institution, like those I have been discussing in this essay. It is clear that the Parliament has fairly limited policy powers, rarely proposing policies, but as a body and institution it?s primary objective is to scrutinise policies and act as a check on government powers. Policy issues are debated in the House of Commons and House of Lords, and create an arena in which strengths and weaknesses of government policies can be highlighted and brought to the attention of first the media, then through them directly to the citizens. Following debate on policy governments may have to issue a White Paper on a particular issue presenting the policy which they would like to pursue, which again, needs to be approved and passed by the Parliament.

The Cabinet in the United Kingdom is another example of an institution, which affects policy. Although comprising of individuals, allocated different departments with perhaps differing interests, the principle of collective responsibility ensures decisions reached by the Cabinet are official, and that Cabinet members are duly bound to defend those decisions. The principle of collective responsibility is evident, as the institution as a whole, comprising each Cabinet member is responsible for all policy matters. Cabinet Ministers are well briefed in all fields, not just the specific areas of government with which they may be concerned, and are aware that a ?policy occasion? is anytime or place that a they or a member of their department mention any aspect of any government policy.

The Cabinet is rarely a point of policy formation ? this is normally done by the Civil Service, who propose a selection of options from which the Cabinet choose a preferred policy which they pursue. The Cabinet can then use the media attention to its benefit in an attempt to promote government policy.

In this essay I feel I have successfully discussed the theory of Neo-Institutionalism, and the role of two UK institutions in the policy making, and shaping process. It is clear through the work of all the cited authors, that Institutions play a very important role in the policy process, and as I mentioned in the opening paragraph are seen as the ?makers and shapers? of policy. With reference to Neo-Institutional theory, it is clear to me, that like so much in Politics, there is no one superior theoretical construct, and that for all the benefits of Neo-Institutionalism, an analytical framework, like that created by Howlett and Ramesh and mentioned earlier, is needed which permits the consideration of the entire range of factors shaping public policy.

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