Use of Monte Carlo Simulation for the Public Sector
An Evidence-based Approach to Scenario Planning
Roberto FoaUniversity of Michigan at Ann Arbor
Melanie HowardThe Future Foundation
INTRODUCTION: THE CASE FOR MONTE CARLO METHODS
As a methodology for facilitating strategic decisions, scenario planning has risen to prominence in the last decade, as policy-makers struggle to prepare in advance of proven contingencies such as terrorism, sharp asset price adjustments or natural disasters like the hurricanes that have recently ravaged the US Gulf Coast (Schwartz 1996; van der Heijden 1996). Unlike linear attempts to forecast the future based on...