CHAPTER II

DISCUSSION

A. Public Policy

Public policy is the means by which a government maintains order or

addresses the needs of its citizens through actions defined by its constitution. If

this definition sounds vague or confusing, it's likely because a public policy is

generally not a tangible thing but rather is a term used to describe a collection

of laws, mandates, or regulations established through a political process.

for example, there have been recent changes to the health care system that

now require every citizen to have health insurance. After a series of debates,

evaluations, and analysis, the federal government arrived at the conclusion that

this would be in the best interest of citizens and began crafting bills, insurance

mandates, and other pieces of legislation to establish a system for how the

people receive health care treatment. Through this legal and political process,

they have created a new public policy, which contains several different parts in

order for it to serve its purpose. Policy analysis describes the investigations that

produce accurate and useful information for decisionmakers. The importance of

sound public policy analysis in achieving various goals related to the growth

and development of a nation and its citizens cannot be overemphasized.

A policy established and carried out by the government goes through several

stages from inception to conclusion. These are agenda building, formulation,

adoption, implementation, evaluation, and termination.

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a. Agenda

Before a policy can be created, a problem must exist that is

called to the attention of the government. Illegal immigration, for

example, has been going on for many years, but it was not until the

1990s that enough people considered it such a serious problem that

it required increased government action. Specific events can place a

problem on the agenda

b. Formulation and Adoption

Policy formulation means coming up with an approach to

solving a problem. Policy formulation has a tangible outcome. The

process continues with adoption

c. Impementation

The implementation or carrying out of policy is most often

accomplished by institutions other than those that formulated and

adopted it. A statute usually provides just a broad outline of a policy.

d. Evaluation and Termination

Evaluation means determining how well a policy is working,

and it is not an easy task. People inside and outside of government

typically use cost-benefit analysis to try to find the answer. In other

words, if the government is spending x billions of dollars on this

policy, are the benefits derived from it worth the expenditure? Cost-

benefit analysis is based on hard-to-come-by data that are subject to

different, and sometimes contradictory, interpretations.

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B. Implementation approaches from the public policy theories

The description of the public policy implementation approaches in

this study, as indicated earlier in this chapter, is envisaged to embody the

top-down approach, the bottom-up approach, the hybrid approach and, in

addition, four additional approaches that present new dimension to

implementation approaches. These are discussed here-under.

a. TOP-DOWN IMPLEMENTATION APPROACH

the top-down implementation approach puts the main emphasis on

the ability of the decision makers to produce unequivocal public

policy objectives and on controlling the implementation stage. Hill

and Hupe (2009:60) contend that the top-down approach takes a

prescriptive format that interprets public policy as an input and

public policy implementation as output factors.

Therefore, the top-down implementation approach implies

that adequate bureaucratic procedures should be established to

ensure that public policies are executed as accurately as possible. To

this end, public institutions should have sufficient resources,

established implementation system, clear responsibilities and

hierarchical control to supervise the actions of the implementers

(Pulz & Treib, 2010:91).

b. BOTTOM-UP IMPLEMENTATION APPROACH

Hill and Hupe (2009:61) argue that the bottom-up

implementation approach suggests that implementation should

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 entail the identification of networks of actors from all agencies

collaborating in public policy implementation. According to Pulz

and Treib (2010:94), in the bottom-up implementation approach,

implementers have a large amount of discretion making the

implementation process eminently political and consequently, the

public policies are shaped by a decisive extent at the

implementation level. This implies that the apolitical hierarchical

guidance in this approach is not considered, as the main actors in the

PPI process are implementers who negotiate the implementation

processes.

c. HYBRID IMPLEMENTATION APPROACH

According to Barret (2004:258), the hybrid implementation

approach seeks to overcome the divide between the other two

approaches by incorporating elements of top-down, bottom-up

approaches. Pulz and Treib (2010:90) further suggest that

transformation of public policy goals into actions depends upon the

interaction of a multitude of actors with separate interests and

strategies, thus giving more weight on public policy processes of co

ordination and collaboration. It can be inferred that the hybrid public

policy implementation approach embraces both the central steering

process, an attribute of a top-down approach, and local autonomy,

an attribute of the bottom-up approach. In light of this, a framework

for reconciled implementation is created between policymakers

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 (usually accustomed to top-down approach) and implementers (who

are proponents of bottom-up approach) (Chand, 2011:01).

d. ADDITIONAL IMPLEMENTATION APPROACHES

Public policy is a dynamic process (Hill & Hupe, 2002:42). This

implies that the evolution of growth and concept development on

public policy and its surrogate processes, like implementation, are

inevitable. Barret (2004:259) argues that social scientists have

contributed a lot to facilitate the understanding of the

implementation process by explaining the gaps in the above-

mentioned approaches (i.e. the topdown, the bottom-up and hybrid

approaches). Consequently, other additional implementation

approaches evolve from studies of implementation of public

policies. Chand (2011:03) identifies and defines the following

additional approaches of the implementation process:

1) Structural approach which entails an organisational

structure that promotes feedback and continuous back

and forth interaction between the public policy design

and the implementation of public policy, thus featuring

implementation that is characterised by less emphasis on

hierarchy; more flexibility and adaptation to changing

environment.

2) Procedural approach which advocates for the

introduction of appropriate procedures in an

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 organisational structure to control; set pace; co-ordinate,

schedule timeline; monitor and manage the

implementation progress of public policies.

3) Behavioral approach states that organisational structures,

policy processes, techniques and managerial tools are as

good as underlined human beings executing them whose

behaviour, competency and attitude impact on

implementation process

4) Political approach emphasises the pattern of the use of

power within an organisation and its influence ensures

the success of the implementation of public policies is

reliant on the coherent willingness of dominant groups

and an ability of pursuit by coalition partners within the

organisation or with outside agencies.

C. Analysis of costs and benefits

Cost benefit analysis is carried out for find out the economic feasibility of

the existence of a food estate program. The main criteria used (Table 1) are

Net Present Value (NPV), Internal Rate of Return (IRR) and Net Benefit

Cost Ratio (Net BCR). If the NPV value > 0, Net BCR> 1, and IRR> i, then

the food project estate is considered feasible. Then as Further consideration

is assessed based on Pay Back Period value and analysis sensitivity to see

project sensitivity against changes in output prices and input.

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 Tabel. 2.1 Criteria of Feasibility Food Estate program

Indicator Formula Criteria

NPV 𝐵𝑡− 𝐶𝑡 NPV > 0
∑
(1 + 𝑟)𝑡
𝑛 𝐵𝑡
BCR 𝐸𝑡=0
(1+𝑟)𝑡
BCR > 1
BCR= 𝑛 𝐶𝑡
𝐸𝑡=0
(1+𝑟)𝑡
IRR 𝐵𝑡− 𝐶𝑡 IRR > i
∑ =0
(1 + 𝐼𝑅𝑅)𝑡
𝑡
Source : Belinger, 2007

Note : Bt = Acceptance in Year T, Ct = Cost in Year T, N = Project Length,

T = Production Period,

I = Interest Rate

D. Pay Back Period

The Food Estate Program is planned for 20 year and 5 year loan

period with assumption of cash flow per year in number different. Then the

formula used is as follows (Ibrahim 2003):

𝑎−𝑏
PBP = n + 𝑐−𝑏 x 1year

Note :

N = Last year where the amount of cash flow still not able to close the

investment first

a = Total initial investment

b = The cumulative amount of cash flows in the year to n

c = The cumulative amount of cash flows in the year to (n + 1)

Criteria :

The project will be carried out if the period return on investment faster than

long loan. PBP> 5 years, for Food Estate Program not feasible

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 PBP <5 years, for Food Estate Program worth to do

E. Sensitivity Analysis

Sensitivity analysis is done for see the feasibility of the project when it

happens changes in revenues and costs. According to Bahasoan (2005)

variables the limit is changed so that it changes It is known that the tolerance

for changing each variable which still results in a decision feasibility of the

project if the project is known it's feasible, this is important based on lots of

projections uncertainty about what will happen in the future. Then on this

study assumed variables what changes is the output price (rice), seed costs

and labor costs.

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