PICA
The Procedure for Institutional Compatibility Assessment (PICA)
SEAMLESS investigates the likely economic, environmental, and social impacts of agricultural and environmental policy options. The effectiveness of a policy depends to a large extent on the degree of compatibility between this policy option and the respective institutional context. Appropriate institutions - the formal and informal rules of a society - increase the likelihood that policy objectives are reached.
Because institutions usually relate to a great diversity of situations, the state of the art in institutional economics offers hardly any standardized procedure for institutional analysis that can easily be combined with environmental and agricultural models widely used for policy impact assessment. Within SEAMLESS we have developed the ‘Procedure for Institutional Compatibility Assessment (PICA)’ as a systematic procedure to use information from ex-post case studies, indicator databanks and theory based reasoning for making ex-ante predictions of the institutional feasibility of policies.
PICA comprises four distinct steps:
- Policy options are clustered according to the type of intervention (regulatory, economic, and advisory), the area of intervention (hierarchy/bureaucracy, market, and self-organised network), possibly involved property rights changes, and the attributes of the natural resource adressed. This classification allows identifying the generic structure of a policy option.
- Each policy cluster is linked to specific sets of crucial institutional aspects (CIA) that may constrain or foster policy implementation.
- Institutional indicators are used to evaluate the potential of a respective CIA.
- The information provided by the institutional indicators is used for a qualitative assessment of each identified CIA. Subsequently, the CIA and the related assessments are arranged in thematic categories of institutional compatibility leading to qualitative statements about the probable effectiveness of a policy option.
PICA allows for a systematic institutional ex-ante assessment of (agri-environmental) policies. This enables policy makers to identify at an early stage (potential) institutional incompatibilities between policy options and the various institutional contexts in different countries and regions. In addition, PICA provides hints for a better policy design in terms of effectiveness and cost-efficiency. This may include redesigning or adapting the policy options and the design of complementary policy measures.
For further information please see:
THEESFELD, I., SCHLEYER, C., AZNAR, O., 2010. The procedure for institutional compatibility assessment: ex-ante policy assessment from an institutional perspective, Journal of Institutional Economics. 6 (03) 377-399.