The evaluation criteria you use will depend on the policy area and the nature of the objectives. The most important criteria are those which are directly related to the objectives – in simple terms, the options should achieve the objectives, and do so with a minimum of undesirable side effects (such as compliance costs or administrative burdens).
In relation to the objectives, the most general criteria for evaluating the policy options are:
- effectiveness – the extent to which options achieve the objectives of the proposal
- efficiency – the extent to which objectives can be achieved for a given level of resources/at least cost (cost-effectiveness)
- coherence – the extent to which options are coherent with the overarching objectives of EU policy, and the extent to which they are likely to limit trade-offs across the economic, social, and environmental domain.
The IA process will in some cases lead to the conclusion that one option best achieves the objectives for the initiative in terms of effectiveness, efficiency and coherence. In other cases it may not be possible or desirable to provide such clear-cut conclusions; the IA should then serve to highlight the major trade-offs and basic choices involved, and how they have been valued.
While identifying a preferred option is not a strict requirement, you should nevertheless always rank the options on the basis of the evaluation criteria which have been used. This should allow decision-makers to examine the trade-offs between affected groups and/or between the impacts on the social, economic and environmental dimensions. It also allows the design of any proposal to be improved to help minimise trade-offs, to identify accompanying measures to mitigate any negative effects, and to maximise the opportunities for a ‘win-win’ outcome.
To rank the options, you should analyse:
- the performance of the different policy options in achieving the defined policy objective and present the results in form of a clear comparison table
- the balance of positive and negative impacts associated with the preferred option and possible alternatives
The first step will be to focus on the performance of the option, in terms of its effectiveness, efficiency and coherence with the defined policy objectives. You should start by ranking the option on the basis of the effectiveness criteria and so identify the option that scores best on effectiveness i.e. meets the defined objectives best. In the second step you should consider the efficiency of the various options, and look at the costs that are associated with implementation of the policy options. In many cases this may show trade-offs that are relevant for the political choices. For instance, you may find that the most effective option also implies higher costs or that a less effective option generates many positive side effects. How you weigh these efficiency aspects against the effectiveness aspects will determine the overall ranking of the options. To ensure full transparency of the process, you should report clearly on how the estimated impacts lead to the various scores, and also on the weights which you have used. In some cases you may consider reformulating your objectives or your options, or to develop sub-options/variants to identify the major trade-offs.
In the next step of the selection process, you should list the expected positive and negative impacts of the policy options, including unintended side-effects. This presentation should be made in quantitative terms for all variables for which this is feasible, expressed in deviations from the baseline scenario. It is often useful to illustrate this in a table or a graph. You may want to mention that there are non-quantified impacts to provide a complete picture.
The most effective and efficient policy option will usually also produce the highest net benefits, and any option that convincingly passes this dual test will be credible. However, you may need to discuss how the non-quantified items would affect the net benefit estimate which you have produced. If the differences in net benefits are not significant, or cannot be sufficiently quantified or supported by evidence, you may need to reconsider the design of the options. Proposed options that cannot be convincingly shown to produce net benefits should normally be discarded.