First- and Second-order Mechanisms in Policy Design
Edited by Giliberto Capano, Michael Howlett, M Ramesh and Altaf Virani
Chapter 5: How neglecting policy mechanisms can lead to policy failure: insights from public–private partnerships in Indias health sector
Altaf Virani and M Ramesh
Policy design involves deliberate decisions about the choice of policy instruments and their optimal configurations for producing desired policy outcomes. Understanding the causal logic through which instruments influence actors to behave in ways consistent with overarching policy goals is critical for success. public–private partnership (PPP) has emerged as a popular instrument due to its promise to combine the advantages of both the public and private sectors. However, PPPs can compound rather than overcome the shortcomings of both if not carefully designed. In this chapter, the authors review the experience of healthcare PPPs in India, and examine issues of policy coherence, contract design, policy capacity and regulation to identify common sources of failure. Based on the analysis, they highlight five levels of failure: goal definition, instrument selection, calibration, implementation and learning. We argue that policy failures are a result of failure to identify and leverage underlying causal mechanisms to design effective interventions.
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