“The use of scenario analysis – a mainstay of both foresight and forecasting – and a skill that is taught well at the School of International Futures — is a good example of how the identification of alternative outcomes and the application of probabilistic thinking can improve the understanding of the future and reduce the chances of policy failure.”
Harry Harding, University Professor and Professor of Public Policy, Frank Batten School of Leadership and Public Policy, University of Virginia
This year’s School of International Futures gave me a deeper appreciation of how important it is for policy makers to think about the future, and how they can learn to do so better. The best policymaking involves predicting the problems that a community will face and then designing and implementing the policies that can prevent, resolve, or mitigate them. In other words, successful policymaking involves the ability to anticipate the future and to reshape it to achieve better outcomes for a society. Although history matters, in that policy problems usually emerge from the past and policy solutions can be informed by the past, policymaking is ultimately all about anticipating and changing the future. This requires that policymakers and policy analysts be able to think about the future in systematic and insightful ways.
The SOIF program showed me that policymakers would benefit by applying two techniques for thinking about the future: foresight and forecasting.
Foresight helps leaders anticipate emerging challenges and opportunities by identifying the most powerful trends that are shaping their community. While describing the trends can be challenging in itself, drawing their implications for a society is particularly important, attempting to foresee how they may either facilitate solutions to existing problems or create new ones.
Moreover, while it is necessary and useful to examine important trends independently, assessing their intersection is also important – how, for example, generational change may interact with climate change in ways that may increase the prospects for managing global warming, or how the combination of new information and manufacturing technologies may produce opportunities and challenges for economies around the world. Without this kind of foresight, policymakers will always be behind the curve, dealing with problems only after they emerge, and trying to seize opportunities well after the time is ripe. Failure to engage in foresight thus carries both direct costs and opportunity costs for leaders and their communities.
Forecasting the results of policy is also an essential task for policymakers. The core analytic techniques used in in policymaking are cost-benefit and cost-effectiveness analysis: evaluating policies based on how successfully they manage the issues they were designed to address, the benefits they provide for their communities, and the costs they impose both inside and outside the community.
When evaluating ongoing programs, cost-benefit and cost-effectiveness analysis examine the past, drawing lessons about has worked and what hasn’t. But when assessing current policy options and selecting among them, those same techniques refocus on forecasting future costs and benefits of alternative policies, often in very different contexts than in the past. Much policy failure is rooted in policy makers’ inability to get those estimates right. What are most often called the “unintended” consequences of policy might better be called the “unanticipated” or “unpredicted” consequences of policy, since in most cases policy failures do not reflect policymakers’ intentions, but instead result from their failure to accurately forecast the effectiveness, benefits, and costs of the policies they have designed.
The common denominator linking foresight and forecasting is that they are both examples of probabilistic analysis. One of the most common reasons for predictive failure is overconfidence that we know what the future will bring, whether based on historical experience, academic theory, or gut instinct. But given the complexity of most social phenomena, the idea that we can know the future with certainty is a dangerous assumption. Better to think about the future in a probabilistic and contingent way: to estimate the probabilities that our predictions about the emergence of problems and the cost-effectiveness of solutions will be accurate, then to identify the conditions and contingencies under which our predictions either will be reinforced, or will need modification. The use of scenario analysis – a mainstay of both foresight and forecasting – and a skill that is taught well at the School of International Futures — is a good example of how the identification of alternative outcomes and the application of probabilistic thinking can improve the understanding of the future and reduce the chances of policy failure.