PESTEL Analysis.ppt of Public Policy, Public administration

PESTLE analysis is a tool to analyze public policy.

1. Ferdous Arfina Osman
Professor
Department of Public Administration
University of Dhaka

2. With policy tools/instruments (NATO) we develop policy options. Then we choose the best option
for taking policy decision
To analyze the options objectively, we do option analysis in both qualitative and quantitative way.
Qualitative:
-PESTLE Analysis
-Risk Analysis
-Multicriteria Analysis
Quantitative:
-Cost Benefit Analysis
-IRR

3. PESTEL analysis is a qualitative tool to analyze the broader macro-environmental factors that
have an impact on a policy. PESTLE stands for : political, economic, social, technological, legal and
environmental factors.
PESTLE analysis
--provides for a multidimensional understanding of the policy problem,
--helps to interrelate the problems with each other,
--provides a big picture of the problem but does not go into the detail of the causes of the
problem.
To do a PESTEL analysis , first we have to identify a problem and suggest some alternative
solutions to the problem.

4. To do a PESTEL analysis , first we have to identify a problem and suggest some alternative solutions to the
problem. For instance:
Problem: Poor quality of public health service in Bangladesh
Policy Options to solve the problem:
1. Increasing budgetary allocation for health
2. Ensuring adequate manpower (doctor and nurse) at the public facilities
3. Ensuring adequate medical equipment
4. Strong Monitoring
Now it needs to be analyzed which of the above options should be chosen for policy initiative as per the
policy context. The method to be used for such analysis is called the PESTEL analysis.

5. STEPS OF PESTLE ANALYSIS
Step1: Context Analysis: to understand the context of
the problem better from different perspectives including
political, Economic, social, Technological and environmental
aspects, PESTLE analysis is done.
Step2: Comparing policy options

6. Aspects Factors
PPolitical National Health Policy, 8
th
Five year Plan pronounce the commitments
to increase the quality of health services provided at public facilities
Poor budgetary allocation for health is indicative of lack of political
commitment to improve the quality of health services at the public
facilities
Alliance of doctors with ruling political parties has paved the way for
absenteeism of government employed doctors in the facilities , which is
one of the key factors causing poor quality service.
EEconomic Doctors spend their public time in private clinics for additional income
affects the quality of service of public facilities
Poor investment in health service (allocation of 5% of national budget
and 0.7% of GDP in 2024-25)
SSocial Lack of public confidence in public service lowers public demand,
which also leads to low quality service.
Better off section opts for private clinic or curative services
TTechnological digital health
Inadequate use of technology
LLegal Regulatory Framework including Private Practice Regulation Act, Drug
policy,
EEnvironmental N/A

7. EVALUATION OF THE POLICY OPTIONS
1. Ensuring adequate manpower (doctor and nurse) at the public facilities
2. Ensuring adequate medical equipments
3. Increasing budgetary allocation for health
4. Strong Monitoring

8. Policy Options Rationale/Benefits
Short Term Long Term
Option1: Ensuring adequate
manpower (doctor and nurse) at
the public facilities
Availability of providers will be
ensured
health service will be able to
respond to the needs of patients
Option2: Ensuring adequate
medical equipment
Patients will get the required
services
Facilities will be well equipped
Option 3: Increasing budgetary
allocation
Patients will get better service
Patients will be attracted to
public facilities
Health care cost (incurred for
pvt care) will be reduced
Access to and quality of service
will increase
Option4: Strong Monitoring  problems/weaknesses of
public facilities would be
identified and addressed timely
Better /worse performing
facilities would be identified
Management of health facilities
will be better
•Absenteeism of doctors and
other staff will be reduced

9. Criteria Option 1
Ensuring adequate manpower (doctor
and nurse) at the public facilities
Option 2
Ensuring adequate medical equipments
 
Option 3
Increasing budgetary allocation
Option 4
Strong Monitoring
Administrative Vacant posts to be fulfilled and if
necessary new posts to be created
 
Human resource policy needs to
overhauled in order to ensure appropriate
skill mix
Health facility management will be better
Medical equipment Policy needs to be
rationalized
 
Facilities will receive the required
equipments
 
Service quality would be better
 
Distribution of increased resources among
the priority areas of health services
Central Monitoring system needs to be
introduced.
Fiscal Additional investment might be necessary
if additional manpower is deployed
Additional investment is required Government has to arrange the increased
amount of budget from different sources.
Financial involvement is nominal if there is
any
Social Availability of providers will increase the
level of citizen trust and confidence
 
Citizen trust will be increased in the
treatment
Hassle for receiving service will be
reduced
People will get better treatment
increased investment might lead to
improved quality of service service
whereby citizen trust and confidence on
government service will increased
 
If the facilities and the providers are
monitored, citizen will get better service
Environmental N/A N/A N/A N/A
Economic People will take service form public
facilities and thereby their health care cost
burden will be minimized
If the facilities at different levels can be
made well equipped then patients from the
remote areas will not come to the capital
city for getting a simple investigation
done. Thus health care cost of patients will
be minimized.
 
Improved service at public facilities will
attract the poor people to the public
facilities whereby their cost for private
care will be saved.
Overlapping, wastage of resources,
weaknesses of the service provision will
be indentified in a timely manner. This will
help management avoiding any big
administrative expendiutre
Political High political commitment and policy
response
Politics has to be rational as politicisation
of recruitment has to be stopped
Political will is needed High Political commitment has to be there
for increasing budgetary allocation.
Policy response to introduce a central
monitoring system
Legal National Health Policy commitment to
provide quality service will be achieved
Will facilitate the achievement ofSDG 3
N/A No legal action is needed Legal framework will be required to
ensure smooth and effective monitoring
Facility management will be streamlined
and service would be better
Technological Advance technology to update the
manpower situation in different afcilities is
required
Advance technology to update the
availaity of functional equipments
prevalent in different afcilities is required
No new technology is needed New technology can be used to activate
the central monitoring system

10. At this stage impact of each option is analyzed. To be specific, how effective the option would be to
addressing the given problem. For a positive impact one plus (+) sign and for negative impact one minus (-)
sign will be added in the matrix.
Policy OptionsPolitical Eco Social Tech Legal Envtal Net score Rank
Status quo
(taking no step)
- - - - - - -6 0
Option 1
(Manpower)
++ - - -  + - ++ N/A 1  
Option 2
(Adequate
equipmnets)
--++ -+ +++ - --+   1 3rd
Option 3
(Increased
budget)
++- ++ ++ ++ --   5 1st
Option4
(Strong
monitoring)
-+ ++ + - -+   2 2nd