An Analytical Framework for Evaluating Economic Policy

Abstract

In both the developed and the developing economies, economic policy interventions are central to determining the outcome in terms of growth, employment and welfare. Nevertheless, the problem of policy failures in many instances does not stem out of having poor objectives but out of poor and fragmented practices of evaluation that take a narrow look at single outcomes. It is with this backdrop that the current study makes an integrated analytical framework in terms of examining economic policy but at the same time optimizing effectiveness, efficiency, and equity. The analysis looks into the policy effects of the secondary macroeconomic and sector panel data of other regions across a ten-year period, partitioned into pre- and post policy periods. Descriptive analysis, welfare assessment, Difference-in-Differences estimation and panel data methods are all utilized in order to ensure the production of strong causal and policy-relevant information. The empirical results are that the evaluated policy intervention contributed to statistically significant increase in economic growth and employment, as well as improvement in the efficiency of the public resource utilisation and the achievable welfare gains. Noteworthedly, the findings also indicate that the growth-oriented policies may have inclusive outcomes when assessed and planned with the help of the analytic frameworks. The paper identifies the importance of evidence-based policy making to be of central concern and the relevance of the policy of linking the understanding of causality with analysis of welfare and efficiency. The suggested framework can provide a highly repeatable and organized method of enhancing accountability, transparency, and sound decision-making in economic governance.