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GRF · Policy Nexus

Causal inference for public policy

Causal inference and impact evaluation ask whether a policy changed outcomes, and by how much relative to what would have happened without it. In this field they separate the effect of laws, programmes and institutional reforms from everything else that changed, and state the assumptions each estimate depends on.

02Application

What causal inference and impact evaluation does here.

Causal inference and impact evaluation develop methods to determine whether and how interventions or exposures cause outcomes. They separate genuine effects from correlation. In policy, governance and institutions and risk management and systemic risk, causal inference shows which risk reduction measures actually work. It supports allocating resources toward interventions with demonstrated effect across connected risks. The canonical description is on the STEM Commons.

Staggered adoption of a reform

Where jurisdictions adopt a rule at different times, difference-in-differences designs with estimators robust to staggered timing compare adopters with those not yet treated, after testing for pre-existing trends.

Eligibility thresholds in programmes

Where a programme uses a score or population cut-off, regression discontinuity compares units just either side of the threshold, where they are otherwise similar.

Synthesis across evaluations

Systematic reviews collect evaluations of a policy type, appraise their designs and combine compatible estimates, reporting variation by context rather than a single average.

03Monitor

Impact evaluation.

The screen a team would use to follow this method: its measures, states and decisions. Names are examples and values are illustrative.

Impact evaluation

Policy · Causal inference for public policy · Run R-4547

Parallel trends holdGRF · Policy Nexus

Event study

Method card

Method
Causal inference and impact evaluation
Design
difference in differences
Units
291
Label
MODELLED

Robustness checks

Main specification0.13Yes
Drop early adopters0.23Yes
Synthetic control0.16Yes
Impact evaluation: the screen's structure, terms and states for Policy.Example names and illustrative values; a design, not a record or a live system.
04Data

What the method consumes.

Datasets and records used by causal inference and impact evaluation on this platform, with the role each plays and the label its values carry. Sources are listed in the source register.

DataRoleLabel
Administrative recordsOutcomes and timing of treatmentPublished statistics
Panel surveysHousehold and firm outcomesESTIMATED
Policy adoption databasesDates and design of reformsPublished statistics
Evaluation repositoriesPrior estimates for synthesisREPORTED
05Policy scenarios

Compare instruments: rules, incentives and information.

Three families of instruments side by side against the baseline, each with its own lag and adoption speed, under the coverage and compliance you set; effect sizes are teaching values to replace with evidence. Scenario: named assumptions about the future, not a forecast.

Controls

Baseline trend of the outcome
2.0% a year
Coverage of the instrument
70%
Compliance
75%
Effect size, against the teaching value
100%
Years ahead
20 years

Readouts

Largest reduction at the horizon
Regulation
Its reduction against the baseline
21%
Numbers, methods and sources
YearBaselineRegulationEconomic incentiveInformation and capacity
0100.099.598.899.1
1102.0101.2100.199.8
2104.0102.5101.199.9
3106.1103.5101.6100.0
4108.2103.7101.8100.7
5110.4103.2101.7102.1
6112.6102.0101.6103.9
7114.9100.4101.6105.9
8117.299.2102.1108.0
9119.598.6102.9110.1
10121.998.9104.2112.3
11124.399.7105.7114.5
12126.8101.1107.4116.8
13129.4102.7109.4119.2
14131.9104.5111.4121.6
15134.6106.5113.5124.0
16137.3108.5115.7126.5
17140.0110.7118.0129.0
18142.8112.9120.4131.6
19145.7115.1122.8134.2
20148.6117.4125.2136.9

Methods

  1. Tools of government Hood (1983), The Tools of Government, Macmillan
  2. Carrots, sticks and sermons Bemelmans-Videc, Rist and Vedung (1998), Transaction
  3. Diffusion of innovations Rogers (2003), Diffusion of Innovations, Free Press
  4. Uncertainty fan (parameter Monte Carlo) Spiegelhalter, Pearson and Short (2011), Visualising uncertainty about the future, Science 333
  5. One-at-a-time sensitivity (tornado) Saltelli and others (2008), Global Sensitivity Analysis: The Primer, Wiley

Data

The model runs on the teaching values set by the controls. To calibrate it for a place, read it against these admitted layers and series, which this page's map can draw:

  • Borders Natural Earth
  • Cities Natural Earth
Compare instruments: rules, incentives and information. Illustrative teaching model: it runs on the values set by the controls, not on measured data. Methods: Tools of government (Hood (1983), The Tools of Government, Macmillan); Carrots, sticks and sermons (Bemelmans-Videc, Rist and Vedung (1998), Transaction); Diffusion of innovations (Rogers (2003), Diffusion of Innovations, Free Press).
06Validation

How results are checked.

Identification assumptions are probed through placebo tests, falsification checks and sensitivity analysis. Replication across settings tests external validity.

CheckHow it is done
Pre-trend and placebo testsOutcomes before adoption, and outcomes the policy cannot affect, are tested for spurious effects
Sensitivity to unobserved confoundingBounds show how strong a hidden confounder would need to be to remove the estimated effect
Pre-registrationHypotheses and analysis plans are registered before outcome data are examined, where feasible
External validity reviewContext, population and implementation are described so that transfer to another setting can be judged

Unobserved confounding and spillovers can bias estimates. Effects found in one context may not transfer to another.

07Implementation

From mandate to evaluation, by pillar.

The steps an instrument takes from mandate to evaluation, each with the pillar that runs it, and the decisions that stay with the authority. Teaching model with stated illustrative values, not a prediction.

  1. Mandate and problem framing Competent authority (outside the programme)
    A competent authority frames the problem and the mandate under its own rules. Howlett, Ramesh and Perl (2009)
  2. Evidence and system model Foundry
    The system is modelled with its feedbacks, data and stated limits. OECD (2014), principle 2
  3. Options appraised with scenarios Foundry
    Instruments are compared under scenarios, with uncertainty shown. Hood (1983)
  4. Exercise with stakeholders Universe
    The options are tested in an exercise with those who would implement and bear them. OECD (2014), principle 3
  5. Standard or guidance drafted Nexus Standards
    What works is codified as a standard or guidance, open to comment. Nexus Standards process
  6. Decision by the authority Competent authority (outside the programme)
    The authority decides, outside the programme, with the evidence on record. Howlett, Ramesh and Perl (2009)
  7. Capacity and training Risk Academy
    Those who implement are trained on the decided instrument and its data. Sendai Framework (2015), priority 2
  8. Monitoring and public report Reports
    Indicators are published with sources, limits and corrections. OECD (2014), principle 5
  9. Evaluation and revision Nexus Standards
    Results return to the standard and the model: the cycle closes. Howlett, Ramesh and Perl (2009)

Methods

  1. Policy cycle Howlett, Ramesh and Perl (2009), Studying Public Policy, Oxford University Press
  2. Governance of critical risks OECD (2014), Recommendation of the Council on the Governance of Critical Risks
  3. Layered drawing of directed graphs Sugiyama, Tagawa and Toda (1981), IEEE SMC 11
From mandate to evaluation, by pillar: the steps as recorded, each with its pillar; sources as cited on each step.
09Instruments and commitments

How causal inference for public policy is governed: instruments, mandates and commitments.

The instruments, mandates, actors and accountability arrangements a policymaker, diplomat or development agency works with, citing the agreements that set them. Structures follow the frameworks named. Any state or progress drawn is illustrative, not a record.

Policy instrument matrix

The kinds of instrument available on causal inference for public policy, by level of government and cooperation.

Instrument typeLocalNationalRegionalGlobal
RegulatoryZoning, building codesLaws, standards, licensingHarmonised rulesConventions and treaties
EconomicLocal levies, grantsBudget lines, taxes, insurance schemesRisk pools, regional fundsFinancing mechanisms
InformationLocal warningsDisclosure, early warning, statisticsData sharing arrangementsGlobal monitoring and reporting
InstitutionalLocal committeesLead agencies, coordination councilsRegional bodies and secretariatsMultilateral mandates
CooperativeCommunity agreementsPartnership compactsMemoranda and joint programmesAgreements and joint commitments
A typology after the OECD Recommendation on the Governance of Critical Risks; examples of instrument types, not an inventory of any country's measures.
Sendai Framework for Disaster Risk Reduction · UNDRRParis Agreement · UNFCCC2030 Agenda and the Sustainable Development Goals · United NationsInternational Health Regulations · WHO
10Stewardship

Who maintains the method.

Economic Development stewards causal inference and impact evaluation for the Consortium and reviews how it is applied across platforms.

11Connected

Where this page leads across the Consortium.

12Questions

Questions and answers.

What are the limits of causal inference and impact evaluation in this field?
Unobserved confounding and spillovers can bias estimates. Effects found in one context may not transfer to another.
How are results checked?
Identification assumptions are probed through placebo tests, falsification checks and sensitivity analysis. Replication across settings tests external validity.
Are the values on this page real?
The data names, roles and checks are real descriptions of practice. The canvas shows a design of the method's use, not a run; no result is reported here.
Where else is this method applied?
The canonical method page lists every platform that applies it.
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