Effective action can only be taken once the underlying cause of a problem has been diagnosed. The cause may be a market failure of some kind or a government failure in terms of planning.
The crucial substantive element at this stage is to understand cause and effect, i.e. to probe the causes or explanations behind the observed problem and to identify the causes rather than the symptoms of the problems. Assessing a problem in terms of its symptoms obscures the real cause and leads to symptomatic solutions that fail to correct the basic issues and condition.
Proponents should demonstrate an understanding of why the problem has or will occur, and directly link this understanding to the identification of potential solutions in the next stage of the framework.