Policy Design and the Calculation of Political Risk

Abstract

This thesis examines the concept of political risk. It explores how political actors determine whether something is politically risky and what implications this judgment holds for policy design. It establishes that calculations of political risk are a day-to-day occurrence in political life, that they uniquely and influentially structure the public policy process, and that political risk analysis is a valid and distinct conceptual framework. Surveying an extensive multidisciplinary literature, the thesis clarifies its definition of political risk and identifies a gap in the existing political science literature concerning the concept. It exposes a hiatus between the political science discipline and political practice in the recognition of political risk calculation as a central aspect of political judgment. Because the theory of political risk is underdeveloped in political science, the thesis pieces together the existing wisdom from other disciplines that might inform a definition of political risk. It then plots a set of hypotheses to assist in constructing a foundational appreciation of what political risk calculation might entail. The thesis tests the resulting hypotheses using empirical research. A survey of 111 Australian political actors is conducted in order to determine how political risk is understood and operationalised in political practice and to ascertain the consequences of political risk for decision making and policy design. Survey results are complemented by a comparative analysis of four policy issues. The case studies selected were the Citizen's Charter and Mad Cow crisis of the British Major Government and the Charter of Social and Fiscal Responsibility and Smart State policies initiated by the Queensland Beattie Government. The comparative analysis of these cases is designed to add rigour to the interview data. It also provides additional information concerning the policy design implications of political risk calculation by relating interview findings to substantive policy problems. Together, this multi-method research demonstrates that political risk provides a fresh analytical perspective on public policy. Political risk analysis describes a unique aspect of political reality and explains in new ways the decision making process underpinning policy design. Political risk analysis also defends political action against claims of irrationality and attacks that suggest that politics is based on sheer cynicism, because it shows that political risk calculation boasts a defensible logic of its own. In fact, the thesis concludes that political risk provides a conceptual tool that begins to unravel some of the 'mystery' of politics that confounds technocratic models of policy analysis. Awareness of political risk calculation re-establishes political decision making as an endeavour where investigation must proceed with an appreciation of the integrated nature of human judgment that utilises both 'rational' and 'extra-rational' capacities to confront uncertainty.