Analytical tools suited to transformative change
This page outlines some analytical tools that have been identified in the literature as relevant to transformative change.
On this page
Goal-oriented (including unintended consequences)
Multi-criteria decision analysis
Ranks options based on how well they satisfy stated criteria.
Relevance to transformative change:
Appraise policy options where impacts are hard-to-quantify/monetise. For example, climate change policy.
Cost-effectiveness analysis
Identifies least-cost options for achieving a defined benefit/goal.
Relevance to transformative change:
Appraise policy options where there is a pre-defined goal. For example, reducing greenhouse gas emissions.
Cost-benefit analysis (CBA)
Quantifies the benefits and costs of a policy.
Relevance to transformative change:
Appraise policy options, especially where impacts are quantifiable/monetisable.
Long-term and future-focused
Scenario analysis
Describes alternative ways the future might unfold.
Relevance to transformative change:
Understand the future policy context.
Systemic/Innovation
System dynamics
Models complex dynamic systems.
Relevance to transformative change:
Understand complex systems.
Risk and uncertainty/Innovation
Real options analysis
Per CBA but incorporates risk/uncertainty.
Relevance to transformative change:
Appraise policy options in the face of risk/uncertainty. For example, large infrastructure projects.
Portfolio analysis
Analyses portfolios based on risk/return or other objectives.
Relevance to transformative change:
Appraise a range of policy options in combination in the face of risk and uncertainty.
Robust decision making
Analyses multiple strategies over multiple future scenarios.
Relevance to transformative change:
Appraise policy options in the face of risk/uncertainty.
Risk-opportunity analysis
Assesses the risks and opportunities of a policy.
Relevance to transformative change:
Appraise policy options in the face of risk/uncertainty.
Path dependence
Behavioural insights
Uses insights about human behaviour to assess/influence individual choices.
Relevance to transformative change:
Fine-tune and improve policy implementation and compliance, plus could be used for problem definition.
Source: Author based on a range of studies including: Browne and Ryan (2011), 'Comparative analysis of evaluation techniques for transport policies'; Watkiss, Hunt, Blyth and Dyszynski (2014), 'The use of new economic decision support tools for adaptation assessment: A review of methods and applications, towards guidance on applicability.'
About these tools
These analytical tools respond to the features of transformative change discussed in:
What is transformative change?
When considering which analytical tools to use for policy about transformative change, it is important to note that there is no silver bullet. Each analytical tool has strengths and weaknesses. For example, multi-criteria decision analysis is often seen as a useful tool for option appraisal when impacts are not easily quantifiable. But multi-criteria decision analysis is often criticised for being subjective, lacking transparency and suffering from arbitrary weights. Similarly, robust decision making is a tool which at first blush seems highly suited to transformative change, but this tool tends to be very time consuming and costly. Risk-opportunity analysis is attracting attention but is new and unproven.
Also important is recognising the risks, uncertainties and complexities inherent in transformative change. In such a context, it is challenging to assess the impacts of policy options in advance. Multiple tools, and ‘triangulation’ across a range of evidence and data sources, are probably needed to gain as full a picture as possible. Also important is a consideration of who has standing in the analysis. As well as the features of transformative change, tools should reflect Te Tiriti.
Partly in recognition of these challenges, some argue that particular attention should be paid to the strategic aspects of the policy process, such as the problem definition and intervention logic, case for change, and anticipated process of change. This reflects that a lack of clear problem definition at the strategic stage of the policy process means that any subsequent appraisal of policy options is likely to fail.