Streamline Training & Documentation: The Negociatrix Policy Game

Thursday, December 10, 2009

The Negociatrix Policy Game

The Project on Negotiation for Agriculture at FAO (Food and Agriculture Organization of the UN) has, with partners, developed a pair of simulations that illustrate judicious application of the simulation methodology.

Specifically, in working through the Negociatrix simulation (2005) or the Negotiatrix Policy Game (2007), participants get a good sense of what they need to know and do in order to effectively handle the complex process of managing agricultural policy in a global market environment.

The audience the FAO negotiation project targets consists of:

Main negotiators of agricultural policy related agreements, especially those from developing countries, a number of whom requested help from the FAO in beefing up their negotiating capacity.

Staff working on bilateral and multilateral negotiations from national administration or Regional Economic Organizations such as the West African Economic and Monetary Union (UEMOA) or the Arab Maghreb Union (AMU).

Civil society and professional organization representatives involved in bilateral or multilateral negotiations.

In this post, I will mostly talk about the Negociatrix Policy Game (ftp:pdf) since it has more day-to-day applicability than the Negociatrix simulation (ftp:pdf), which is designed to emulate participation in periodic World Trade Organization conferences.¹

The Negociatrix Policy Game aims to help participants improve both their negotiation skills² and their ability to analyze trade policy impacts on such social welfare variables as farm income and net exports (exports less imports).

The linkages between agricultural policies (e.g., tariffs, price supports, and subsidies) and the variables that measure social welfare are complex. Participants quickly become aware of the difficulty of pursuing multiple objectives simultaneously in a global agricultural and food market environment, especially when the objectives are not entirely compatible. They are also confronted with the need to manage both their relationships with other parties and the negotiation process itself in order to arrive at a more-than-satisfactory and reasonably stable outcome.

There are up to twelve countries in the Policy game:

Benglapal, modeled on Thailand and Vietnam

Esperantia, modeled on Brazil

Federatio, modeled on the US

Imperia, modeled on China

Ketanya, modeled on Tanzania and Kenya

Insula, modeled on Mauritius

Mabu-Fabe, modeled on Mali, Burkina Faso, and Benin

Neosaxy, modeled on Australia

Osterland, modeled on Japan

Pali, modeled on Haiti

Uniona, modeled on the EU

ROW, i.e., the rest of the world

Note that the game can be played with fewer countries if desired.

There are three agricultural commodities in the simulation:

a cash crop modeled on cotton

a basic food crop modeled on rice

a processed crop modeled on sugar and coffee

Each country is a producer and/or a consumer of at least two of these products and sometimes of all three.

For each country, the simulation designers have created a policy context (a set of current agriculture- and food-related policies) and a virtual economy (specifying such things as government expenditure and demand for and supply of food crops). All of this is modeled in a set of Excel worksheets.

An individual or, preferably, a team is assigned to each country. In what follows, let's assume that teams of two are used.

The team's job is to make policy choices for their country (e.g., by setting tariff levels) during each round of the game. Their objective is to raise the country's national welfare, as reflected in an index built from five components:

farm income

food consumption per capita

government spending on agriculture

agricultural trade balance

How much weight is given to each of these components is determined by a particular country's policy priorities. For instance, here are the weights for three of the countries:


    Goal        Federatio  Imperia   Pali
Incr
farm income        0.23     0.06     0.14          
 
Incr per capita
food consumption   0.21     0.12     0.22
 
Limit
govt spending      0.08     0.27     0.24
 
Improve ag
trade balance      0.41     0.51     0.35
 
Incr GDP           0.07     0.03     0.05

After each policy-setting round, the software displays the impacts on social welfare (farm income, food consumption, etc.) of the policy choices, impacts that reflect the interdependence of all the countries' economies. Because the participants can see the impacts for all countries, they can undertake an informed analysis of what happened during the round.

During any round, teams are free to enter into informal negotations with each other to try to improve results in a mutually beneficial way. I.e., teams can look for ways to increase the overall social value generated in the food and agricultural sector, and then negotiate how to share whatever increased value they've agreed it's feasible to achieve.

The outcome of the game will depend, to a large extent, on the negotiation strategy adopted by each team and on the quality of the team's analysis of the linkages between changes in national policy measures and changes in agricultural and food markets.

Because of the game's complexity (several countries, several policy instruments which must be balanced in order to achieve multiple goals), it's important that facilitators be ready to assist participants in understanding the impacts of policy choices on world and local markets.

__________
¹ The Negociatrix simulation includes issues to be addressed explicitly by participants that are approached informally or not at all in the Negociatrix Policy Game. Some of these issues are: managing the process of conducting complex international negotiations, dealing with power asymmetry among countries, building and using coalitions, overcoming deadlocks, and managing information and communication channels.

² FAO recommends that participants in the simulations first receive some training in these skills and concepts: active listening skills, the three tensions of negotiation (between cooperation and competition, between empathy and assertiveness, and between what principals want and what agents want), the process of creating and distributing value, preparation for negotiation, managing a mandate, handling difficult negotiations, handling multiparty negotiations, managing the negotiation process, team negotiation, relationship mapping, understanding the life of coalitions, dynamics of international trade, and trade policy instruments (e.g., tariffs).

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Labels: Negotiation, Simulation

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