Policy Foresight Research Articles

Unconventional monetary policy and policy foresight

What are the effects of unconventional monetary policy interventions on the economy? Empirical studies utilizing traditional SVAR models consistently report expansionary effects on output and prices while considering only a small number of variables. This paper is the first to present both narrative and empirical evidence indicating that these models are susceptible to policy foresight, as central banks frequently announce their unconventional policies months in advance. To address policy foresight, we estimate a Bayesian FAVAR model with an extended set of information for the Euro Area. Consistent with the existing literature, we find that an unconventional monetary policy shock boosts economic activity by increasing industrial production and reducing the unemployment rate. Notably, our estimated effects are both larger and more persistent compared to previous findings. Furthermore, the shock decreases interest rates, interest rate spreads, and government bond yields, leading to an improvement in financial conditions. In a noteworthy departure from previous research, we find significant uncertainty regarding the impacts on consumer and producer prices, highlighting the need for further research.

Transforming the European Union's phosphorus governance through holistic and intersectoral framings

This review paper presents a critical perspective on the transformation of phosphorus governance in the European Union to support food and environmental security, which are subject to systemic shocks. It presents three major limitations that act as constraints to this process: (1) the predominance of technical studies, which produce isolated meanings that fail to address the socio-political aspect of phosphorus management and cannot be translated into policy foresight; (2) approaches to change dominated by the linear resource efficiency paradigm narrowly confined within sectoral responses to system shocks; and (3) the constrained policy understanding of the circular economy, which hampers system change as phosphorus reuse is seen primarily as part of the biological cycle of the circular economy and does not advance critical perspectives. We argue that the siloed and heavy regulatory load related to phosphorus produces technocratic and incremental policy revisions, singular state-level approaches and reductionist prisms that exclude extraterritoriality. These exacerbate the inability of institutions to translate technical studies into policy foresight and counter the pervasiveness of linearity. Phosphorus requires instead a holistic and intersectoral governance object that is integrated with the multiple transition instruments on the policy-making agenda of the European Union. To achieve phosphorus sustainability and avoid the dependence on shocks for its self-renewal, phosphorus governance needs to overcome the technocratic incrementalism of individual sectors and adapt to alternative discursive framings that transcend the existing compartmentalization of its meanings. This would require disentangling phosphorus as a contested arena of controversial stakeholder priorities and selectively amplifying the discursive framings that can politicize and enhance its ubiquitous importance. While phosphorus has its unique properties, such an approach can be of relevance to other elements.

Exploring knowledge creation, capabilities, and relations in a distributed policy foresight system: Case Finland

In an uncertain and increasingly interdependent world, cross-sectoral policy foresight is needed to tackle complex phenomena. However, most existing foresight studies have focused on a single sector or domain. This article adopts a systems perspective and explores knowledge creation, capabilities, and relations in a distributed policy foresight system cutting across government sectors and national, regional, and local administrative levels. The article is based on empirical material collected in Finland in 2019, describing the Finnish policy foresight system's existing organizational and systemic foresight capacities. Our results indicate that policy foresight considers relatively narrow future horizons relying heavily on futures knowledge that is accessible in the immediate operating environment. The full potential of foresight is not utilized. Distributed foresight collaboration at the systems level is hindered by lack of coherence, coordination, and collaboration structures. We propose ways to improve the foresight system's performance and point to ecosystem literature as a productive direction for foresight research to further the paradigm of distributed foresight systems.

A Fiscal Policy Foresight Tax Model, Shadow Economy Reduction, and E-Payment Institutionalization as a Result of Knowledge Management

Foresight is the key for the economy, the business environment, and by extension society and politics to face various risks under conditions of uncertainty, which is becoming the norm as we progress through the 21st century. This paper proposes a wealth-based income tax model with an obligatory electronic transaction legal framework to advance fiscal knowledge management in Greek government. The research was conducted using an online questionnaire that was distributed to Greek tax payers via the snowball method. Linear regression was used to examine the associations between the variables. The research results provide insight into the factors driving the enhancement of tax revenue collection via artificial intelligence software after the widespread adoption of e-transactions. A fiscal tax e-payment reform policy based on an artificially intelligent tax foresight model succeeds in reducing income disparities caused by overtaxing honest taxpayers, thereby shrinking the shadow economy. With the widespread adoption of e-payments and complete digitization of financial transactions, the results of this study can serve as a foundation for the advancement of fiscal knowledge management and compliance with tax behavior. This study emphasizes the importance of planning ahead for taxes and coordinating information in order to reform fiscal policy for the better.

Development of regional foresight studies between 2000 and 2019: an overview and co-citation analysis

Regional foresight is one of the regional planning approaches that increase the ability to deal with uncertainty and changes. This study aims to provide an overview of regional foresight studies and domain map to evaluate their merits and defects and direct future studies in this field. For this purpose, 111 papers related to regional foresight were identified at the “Web of Science” in the period 2000 to 2019 and used as the basis for further analysis. These papers have been reviewed in various aspects. In addition, the domain map of regional foresight and its intellectual bases was drawn based on co-citation analysis of these papers and their 4194 references. The domain map includes five main clusters of research areas or intellectual bases for regional foresight: normative forecasting, participation, foresight in policy and strategy, innovation systems, and multi-level governance. Finally, the merits and defects of regional foresight studies are evaluated based on research results and some suggestions are provided for future studies.

Science, technology and innovation policy in Russia and China – Mapping and comparisons in objectives, instruments and implementation

Science, Technology and Innovation (STI) policy of Russia and China is studied in this paper from a policy foresight perspective and with regard to policy instruments, policy objectives, and policy implementation. A structural analytical framework is developed in this study specifically for STI policy analysis in these dimensions. Analyzing a database of 418 STI policies issued in the two countries, 25 policy variables have been scrutinized for the two countries vis-à-vis the three policy dimensions. The paper then maps and compares the two countries in STI policy instruments, objectives and implementation, adopting a positivist epistemology stance. Estimating a binary logistic model, Russia has been differentiated from China in their choice of policy instruments, their devotion to policy objectives and their approaches to policy implementation, revealing the differences and similarities between the two countries in the three STI policy dimensions. Deriving observable and corroborated evidence for STI policy perspectives in Russia and China, the results and findings help gain legitimate knowledge in this field.

Implications of urban expansion on land use and land cover: towards sustainable development of Mega Manila, Philippines

Planning of land use and infrastructure in advance for a population that is projected to grow rapidly is highly important for its sustainable development. A correlative approach of land use shifts and infrastructure design is perhaps the best sustainable urban development option that can be made at present. This paper is aimed at suggesting policy foresight, in terms of infrastructure and land use management of Mega Manila. Using Land Change Modeller, this study assessed landscape pattern, change process and future scenario of land changes in the study area. The land use/landscape change pattern, with vulnerability analysis and predicting 2030 land use maps, enabled us to understand impacts of urban expansion on different land use sectors. Overall analysis of gains and losses in different land use categories across different sectors between 1989 and 2010 indicated that built-up area experienced the highest net gain of 90.96%. Two future scenario maps were projected to indicate the potential effects of urban expansion on forested areas near study area. Urban expansion was predicted to expand by 897.16 sq. km (36% gain) with protected area scenario. Contributions to this gain were projected to come from agricultural land of 274.94 sq. km, identified as one of the major contributors to urban expansion. Following the analysis, the paper argues that land use management plan should be revised in the Mega Manila city to reduce the loss of protected areas and anthropogenic impacts.

Systemic Design for Policy Foresight

In the last 15 years, tackling wicked problems have evolved into a process that requires multiple change-makers able to face with complexity. At the same time, it has generated an increasing interest and proficient relation among foresight and design, due to their shared interest in anticipation and future orientation. Such relationships are visible on similarities they both have on the mindset and methodology used when approaching future scenarios. This paper aims to delve into a better comprehension on how the combination of Systemic Design and foresight can think both creatively and systematically about the future and have a strategic role in a policy-making process. This example of collaborative foresight is illustrated by RETRACE Interreg Europe project (A Systemic Approach for Transition towards a Circular Economy funded by the Interreg Europe), demonstrating how Systemic Design with a foresight vision can play a leverage effect in the transition of the European regions towards Circular Economy in a long-term horizon.

Six foresight frames: Classifying policy foresight processes in foresight systems according to perceived unpredictability and pursued change

Foresight is conducted in diverse ways drawing on particular sets of assumptions, and it increasingly takes place in networked foresight systems. We develop a typology of six foresight frames based on two dimensions: 1) level of perceived unpredictability and 2) level of pursued change. By frames, we mean the interpretive structures that underlie foresight actors’ work. The six foresight frames are the predictive, planning, scenaric, visionary, critical and transformative frames. The frames may be used to position phases of foresight, individual processes or, most usefully, interlinked foresight processes in a system. We develop the model based on futures literature and elaborate it in a study of comprehensive security foresight in Finland conducted during the Strategic Research Council project “From Failand to Winland”. Moreover, we test our typology with four additional foresight system cases: Singapore, United Kingdom, Wallonia and Russia. The six frames capture different sets of assumptions and different types of foresight which can be distributed to different actors in a foresight system. Thus we suggest that diversity of foresight frames is likely to be an element of successful foresight systems. However, this requires understanding the diversity of foresight frames and the competence to bridge different approaches.

China's organization and governance of innovation – A policy foresight perspective

We study China's organization and governance of innovation in this paper from a policy foresight perspective. With its experience of planning systems, China resorts to state intervention in economic and social activities, which profoundly includes research and innovation. The government organizes and governs a vast national science and technology system, most of which is in the state sector, demonstrating the importance and relevance of its research and innovation policy. In this study, 343 innovation policy items, collected in our sample for the period 1990 and 2013, have been scrutinized in a three dimension analytical framework for policy instruments, objectives and implementation. We then abstract and conceptualize the results and findings arrived at the study. Targeted and general purpose policy instruments are categorized. Patterns have emerged revealing the linkages between the targeted policy instruments and the policy objectives. The results and findings based conceptualization contributes to innovate the thinking in innovation policy configuration to advance national innovation constructs.

The anatomy of plausible futures in policy processes: Comparing the cases of data protection and comprehensive security

Due to rapid change and wicked policy problems, anticipatory policymaking is increasingly important. In addition to methods for producing foresight knowledge, tools are needed to make sense of the increasing amounts of future-oriented argumentation. This article presents a comparative analysis of anticipatory argumentation in two fields: the EU data protection reform and the Finnish concept for comprehensive security. A three-layer heuristic framework is presented for qualitative analysis of statements on plausible futures. The first layer consists of specific expectations regarding the future. The second layer is the generic anticipatory storyline. The third layer consists of the underlying futures consciousness. The data protection case presents an institutional reform narrative with short time perspective and relatively high agency, while the comprehensive security case presents a crisis narrative based on a contingency planning orientation with long time perspective, relatively developed systems perception and relatively low agency. In policy foresight with high uncertainty and high aspirations of agency, reflexivity and ethical responsibility are crucial components of foresight. This article promotes these by providing a tool for structuring anticipatory assumptions. The tool can be used for studying policy documents or during the policy process to craft more rigorous future-oriented policies.

Decision-Making Tools and Strategic Planning in Project Environments: The Overlap Of The Two Concepts

Decision-making is at the core of business strategy. This paper studies that role of economic decision-making in strategic planning. It discusses methods such as foresight and roadmapping, and the contributions they make to the strategic vision. The literature gathered provides information on the methods used to implement foresight in policy making, as well as the business organization environment. We begin by providing a background of decision-making and strategic planning. The importance of making quality decisions is explained in the literature review with the intent of creating a setting for the need of decision-making tools. The literature selected for this study discusses tools such as trend analysis, change driver identification, and the overall of assessment capacity levels. The finding of this paper validates the assumption that decision-making tools are used to identify areas of improvement, as well as business opportunities. Information on the use of specific analytical tools is provided, as well as a comparison of tools used public administrator and company managers. The results of the study demonstrate the intention of managers and decision-makers to make decisions that are in alignment with the company's strategic vision. Some of the barrier and implications of the study are discussed, as well as areas for future study.

Anticipating novel conservation risks of increased human access to remote regions with warming

The consequences for wildlife conservation of climate change facilitation of human access to currently remote areas are poorly considered but potentially significant. Focusing on species of cultural and conservation concern in the Arctic and Tropics, we advocate a re-evaluation of the process of assigning protected area status to account for such risks. We identify areas currently lacking protected status in both regions that are prone to loss of wildlife habitat due to increased human access and direct climate change, and outline measures for updating their conservation status. Policy foresight along these lines will help buffer wildlife against previously unanticipated consequences of climate change.

Stakeholder driven future scenarios as an element of interdisciplinary management tools; the case of future offshore aquaculture development and the potential effects on fishermen in Santa Barbara, California

The following article discusses how to elicit quantitative stakeholder driven scenarios as an output for use in interdisciplinary policy models using Systems Thinking and Bayesian Belief Network conjointly in a workshop setting. The usefulness of this joint method was tested on a core group of stakeholders that would likely be impacted if offshore aquaculture were to be developed in Santa Barbara, California, namely the commercial fishermen. The workshop elicited several scenarios describing stakeholder perceived notions of how offshore aquaculture could impact their industry. This joint method is a new method of developing future scenarios. These can in turn be used to develop more encompassing and interdisciplinary foresight models, early warning systems, for managers in different management areas. Models can thereby include human perception and comprehensive and quantitative scenarios by delimiting the variable paths toward each stakeholder driven scenario as additional elements in a comprehensive policy foresight recommendation tool.

News and Policy Foresight in a Macro-Finance Model of the U.S.

News and Policy Foresight in a Macro-Finance Model of the U.S.

Trade-offs between policy impacts of future-oriented analysis: experiences from the innovation policy foresight and strategy process of the City of Vienna

In 2006 the City of Vienna launched a foresight and strategy process to revisit its urban research and innovation policy. This process undoubtedly had a major impact on policy; in fact, several of the recommendations of the process were immediately translated into policy decisions, others are planned to be implemented in the years to come. In spite of this apparent success, a more critical and systematic assessment of the process shows that the apparent short-term success of the process seems to come at the cost of limited medium- to long-term impact, associated with a low degree of novelty and the avoidance of controversy. The impact assessment is based on a framework that focuses on three key functions of foresight in relation to policy making: informing, counselling, and facilitating policy making at short-, medium- and long-term. Obviously, only the short-term impact assessment can rely on empirical observations, but there are also several indications of likely shortcomings with respect to the medium- and long-term impacts. Moreover, evidence can be given of process mechanisms that have been conducive to the generation of rather conservative outcomes. After introducing the impact assessment framework and the general process design, objectives and results of the Viennese innovation policy foresight and strategy process and the different impact dimensions will be analysed and assessed for different time horizons. The reasons for success in terms of short-term policy impacts will be highlighted, but also the factors that seem to hamper medium- and long-term impacts from arising. Finally, some generic lessons learned from the Viennese experience will be discussed.

Energy efficiency, security of supply and the environment in South Africa: Moving beyond the strategy documents

Energy efficiency is one of the most potent and cost effective ways of meeting the demands of sustainable development. It has in fact been referred to as the best energy resource. Way back in 2005 the South African Department of Minerals and Energy (DME) published its Energy Efficiency Strategy in support of some of the objectives enlisted in the 1998 White Paper on Energy Policy. The Strategy set a national target for energy efficiency improvement of 12% by 2015 against the baseline year 2000. The document further predicted that, with a business as usual model of energy usage, at the projected rate of national economic development, there would be a need to invest in new power generating capacity by around 2007. Despite the policy foresight and seemingly enthusiastic efforts, though, the dawn of 2008 saw the country gripped in an electric power crisis, with a capacity shortfall of over 10%. This paper looks at what could have gone wrong, examines energy efficiency policies and measures in other countries and how these lessons could be adopted to the South African context.

Quantifying tax effects under policy foresight

Studies of tax effects make the conventional information assumption that changes in period- t taxes become known at t. Legislative lags, however, imply that news arrives before tax changes take place. Under policy foreknowledge, the conventional information structure is therefore misspecified. Simulations of a standard neoclassical growth model suggest that foresight of only one quarter can distort substantially the estimates of tax effects obtained under the no-foresight assumption. Also, it is crucial to model capital and labor taxes separately: anticipated changes in these two tax policies have opposite effects on consumption, investment, labor, and output before policy realization.

Agency Policy Making and Political Control: Modeling Away the Delegation Problem

Agency Policy Making and Political Control: Modeling Away the Delegation Problem