Institutional Inconsistency and Political Instability: Polity Duration, 1800–2000

This article examines how political institutional structures affect political instability. It classifies polities as autocracies or democracies based on three institutional dimensions: election of the executive, constraints on executive decision-making authority, and extent of political participation. It hypothesizes that strongly autocratic and democratic regimes will exhibit the greatest stability resulting from self-enforcing equilibria, whereby the maintenance of a polity's institutional structure is in the interest of political elites, whether through autocratic or democratic control. Institutionally inconsistent regimes (those exhibiting a mix of institutional characteristics of both democracy and autocracy) lack these self-enforcing characteristics and are expected to be shorter-lived. Using a log-logistic duration model, polity survival time ratios are estimated. Institutionally consistent polities are significantly more stable than institutionally inconsistent polities. The least stable political systems are dictatorships with high levels of political participation. The most unstable configuration for polities with an elected executive is one where the executive is highly constrained, but the electorate is very small.     

The politics of bank bailout in Japan: a cognitive capture and leadership view

Abstract

This article explores why the Japanese government did not decisively intervene on behalf of bank bailouts at the early stage of the banking crisis of 1997–98 and investigates the institutional and political context behind the use of fiscal money for bank bailouts in 1997–98, 1998–99, and 2001–05. In contrast with prevailing views, which emphasize the conflicts of interest or differences in policy preferences between politicians and bureaucrats and their captured nature either by bankers’ special interests or political/bureaucratic interests, this article argues that Japanese policymakers shared a congruent policy preference — that is, minimizing the disruptions in the existing institutional arrangement in government-bank-firm relations and this congruence in policy preference (or ‘cognitive capture’) compelled the government to take a creditor-centered approach to the banking problem — i.e., letting banks resolve their own problems. It also argues that a strong political leadership that can break with the ‘cognitive capture’ and sustain government's resolute commitment to solving the nonperforming loan problem is an essential factor for successful bank restructuring.     

Policy Entrepreneurship and Institutional Change: Multilevel Governance of Central Banking Reform

Recent studies on institutional theory and the public policy field called for efforts to pry open the black box of institutional and policy change. This article offers a response to this call. It demonstrates that historical and discursive institutionalist approaches are complementary to explain how and why institutional change occurs. In addition, it shows how these approaches can add value to and benefit from the public policy and administration fields that seek to explain policy change and success. In particular, it emphasizes the interactions between structure and agency that contribute to the change. The empirical finding is based on qualitative analysis of central banking reform in Turkey. It suggests that institutional and policy change is more likely to occur when policy entrepreneurs, with joint membership in domestic and transnational policy communities, mediate various ideas and discourse within and among these communities in a punctuated institutional equilibrium.     

Public Sector Reform in Australia: An Evaluation of the Corporatisation of Sydney Water, 1995 to 2002

The corporatisation of Sydney Water from 1995 onwards formed part of a much broader process of public sector reform in Australia. However, Sydney Water represents an unusual case study of corporatisation since it has embodied two distinct forms of corporate structure over the period 1995 to 2002; both the company model and the statutory model. This article seeks to evaluate the success or otherwise of this corporatisation process using ‘internal’ measures of the performance appraisals undertaken by ‘outside’ bodies in six main forums: The independent assessments against operating licence conditions; NSW government's annual assessments of government businesses performance; Sydney Water's own performance measurement against corporate business plans; water reform measures stipulated by the Council of Australian Governments; industry financial performance indicators as measured by the Water Services Association of Australia; and an international assessment conducted by the UK Office of Water Services.     

Regulating finance after the crisis: Unveiling the different dynamics of the regulatory process

It is now widely recognized that regulatory failures contributed to the onset of the global financial crisis. Redressing such failures has, thus, been a key policy priority in the post‐crisis reform agenda at both the domestic and international levels. This special issue investigates the process of post‐crisis financial regulatory reform in a number of crucial issue areas, including the rules and arrangements that govern financial supervision, offshore financial centers and shadow banking, the financial industry's involvement in global regulatory processes, and macroeconomic modeling. In so doing, the main purpose of this special issue is to shed light on an often understudied aspect in regulation literature: the variation in the dynamics of regulatory change. Contributors examine the different dynamics of regulatory change observed post‐crisis and explain variations by accounting for the interaction between institutional factors, on the one hand, and the activity of change agents and veto players involved in the regulatory reform process, on the other.     

Varieties of Liberalism: Keynesian Responses to the Great Recession in France and Germany

This article argues that distinctive liberal traditions shaped France and Germany's Keynesian policy responses to the post‐2007 economic crisis. In France, “statist liberalism” privileges an activist state that favors macroeconomic intervention and investment. German “corporate liberalism,” by contrast, is more pluralist and emphasizes the powers and responsibilities of social and economic groups, who are viewed as the fundamental components of the social order. The article argues that these traditions shaped elite interpretations of the crisis and played central roles in defining policy trajectories. They informed a modest French response focused on macroeconomic stimulus that relied on existing income support and a larger German effort centered on a microeconomic strategy of group subsidization. It concludes that these outcomes are inconsistent with traditional institutional accounts and highlights the importance of research on the role of ideas in shaping national responses to economic crises.     

Explaining Swedish Corporatism: The Formative Moment

The question addressed in this article is how to explain major intentional changes in national political systems. The theoretical point of departure is that political systems are usually so tightly structured that the prospects of actors introducing such changes are very small. The argument put forward is that only under certain periods of crisis can such changes occur; it is only during such formative moments that political actors change the institutional parameters or the nature of the 'game'. Empirically, the article extends this argument in an attempt to explain why Sweden's political system became highly corporatist. It has been shown that from a rationalistic approach, collective action - e. g. why individuals join and support interest organizations - is difficult to explain. Instead, an institutional explanation is offered. The empirical analysis shows how centrally placed politicians in Sweden during the 1930s, by changing the payoffs, could solve the 'free-rider' problem for both farmers' and workers' interest organizations. Contrary to earlier studies, the analysis shows that the breakthrough of corporatist principles in Swedish politics took place under a Liberal government strongly supported by the Conservative Party. The traditional connection between the Swedish Social Democrats and the corporatist nature of Swedish politics is thus questioned and the alliance between the Social Democrats and the Farmers' League in 1933 is given a new explanation.     

The new institutionalism and the study of the European union: The case of the social dialogue

This article applies new institutionalist perspectives on institutional change to the inclusion in the Maastricht Treaty of social dialogue provisions giving the social partners the right to participate in social policy‐making. It concludes that the new institutionalism cannot explain institutional change. By relying on exogenous variables such as ‘critical junctures’, ‘leadership’ or ‘ideas’, new institutionalist analyses resort to a collection of explanations that proponents of almost any theoretical perspective could use. The new institutionalisin's failure to develop an institutionalist account of change is a serious weakness that brings into question its use as an analytical tool in EU studies.     

Tracing leadership: the ECB’s ‘whatever it takes’ and Germany in the Ukraine crisis

Abstract

Political scientists face problems when assessing a leader’s impact: how can we know that a policy outcome or institutional change is caused by leadership? This article argues that in addition to relying on comparisons and counterfactuals, we need to trace the causal mechanisms by which leadership affects outcomes. Therefore, the article proposes a way to trace leadership and applies it to two cases of EU crisis management: the European Central Bank’s role in announcing Outright Monetary Transactions in the eurozone crisis, and Germany’s role in shaping the EU’s response to the Ukraine crisis. Systematic process-tracing shows that both actors provided leadership ‘by default’. However, while the ECB had to combine the provision of knowledge with unilateral action in order to overcome the eurozone crisis, Germany could use manifold bargaining-based strategies and thus became the EU’s de facto agenda setter and main representative in managing the Ukraine crisis.     

Recalibrating Policy Orthodoxy: The IMF Since the Great Recession

This special issue reviews patterns of policy stability and change at the International Monetary Fund (IMF) since the Great Recession and attempts to explain their causes. The contributors show that the crisis ignited a reassessment regarding how the IMF would position itself as a pivotal player in global economic governance. Some new ideas and evidence definitely found their way into IMF decision making, but this process was often tempered by the nature of the institution and the powerful interests that control its governing structure. Where change did occur, its causal generators could be found in some combination between IMF staff politics, a string of innovations coming from academic and IMF economists, and the emerging economic powers' creative leveraging of institutional fora both within and inside the Fund.     

Exploring How Institutional Arrangements Shape Stakeholder Influence on Policy Decisions: A Comparative Analysis in the Energy Sector

In recent years, there has been an expansion of efforts to include stakeholders in administrative policy making. Despite significant potential to improve policy decisions, empirical evidence suggests that not all participatory processes provide meaningful opportunities for stakeholders to shape policy and may even give the most powerful stakeholder groups disproportionate influence over policy decisions. This article argues that the institutional arrangements for stakeholder engagement—the rules and norms that determine which stakeholders can participate and how—affect stakeholders’ influence on policy decisions. This article uses state energy efficiency policy making as a context in which to compare how different institutional arrangements shape the ways in which stakeholders engage in and influence the policy process across two states, Connecticut and Maryland. Findings highlight that institutional arrangements can be used to increase participation, mitigate undue influence of industrial stakeholders, and increase the influence of public interest stakeholder organizations.     

Legitimation as justification: Foregrounding public philosophies in explanations of gradual ideational change

In accounts of institutional change, discursive institutionalists point to the role of economic and political ideas in upending institutional stability and providing the raw material for the establishment of a new institutional setup. This approach has typically entailed a conceptualisation of ideas as coherent and monolithic and actors as almost automatically following the precepts of the ideas they hold and support. Recent theorising stresses how ideas are in fact composite and heterogeneous, and actors pragmatic and strategic in how they employ ideas in political struggles. However, this change of focus has, until recently, not included how foundational ideas of a polity, often referred to as ‘public philosophies’, are theorised to impact on institution-building. Drawing on French Pragmatic Sociology, and taking as a starting point recent efforts within discursive institutionalism to conceptualise the dynamic nature of public philosophies, this article seeks to foreground moral justification in accounts of ideational and institutional change. It suggests that public philosophies are reflexively used by actors in continual processes of normative justification that may produce significant policy shifts over time. The empirical relevance of the argument is demonstrated through an analysis of gradual ideational and institutional change in French labour market policy, specifically the development from the state-guaranteed minimum income scheme of 1988 to the neoliberal make-work-pay logic of the 2009 scheme, Revenu de solidarité active. The analysis shows that public and moral justifications have underpinned and gradually shaped these radical changes.     

Bread-and-Butter Agreement and High Politics Disagreement Some Reflections on the Contextual Impact on Agricultural Interests in EC Policy-Making*

In public policy literature a classical argument is that the scope and content of decisions shape both the structure of the policy-making process and the configuration of actors involved. Recent studies have strongly emphasized that the patterns of segmentation and specialization found in national policy-making are also found in EC policy-making. Against this background, the present article discusses the conditions and impact of agricultural interests in EC policy-making in light of the economic crisis of recent years and the increasing budgetary problems faced by the EC. The article illustrates, especially with reference to the Danish case, the special importance of the national interest organization-government relationship for the strategies pursued by national agricultural interest organizations in influencing EC/CAP policy-making. Furthermore, the article indicates how policy-making concerning the CAP has become more complicated as a consequence of the general economic crisis and recent sharp fall in farmers' incomes. National governments are the central actors in the Community policy-making process, and their impulse to promote exclusive national interests in the Community policy-making process has increased. In addition, agriculture has been integrated in the overall Community ‘crisis’ policy, and this development has weakened the segmentation in relation to the CAP. However, because of the general problems of the EC, the national agricultural organizations of the various member states have a growing interest in emphasizing joint activities and mutual agreement with regard to fundamental agricultural issues on Community level. This may affect the role of COPA leaving it primarily as a coordinator and mediator among the various national agricultural organizations, because pressures are more likely to succeed at the national level than at the EC level. This is where ‘bread-and-butter’ agreement really counts in the future. The alternative is that COPA will lose its credibility in EC policy-making.     

Functional regulatory spaces

This article develops the concept of “Functional Regulatory Space” (FRS) in order to analyze the new forms of State action addressing (super) wicked problems. A FRS simultaneously spans several policy sectors, institutional territories and levels of government. It suggests integrating previous policy theories that focused on “boundary-spanning regime,” “territorial institutionalism” or multi-level governance. The FRS concept is envisaged as a Weberian “ideal-type” of State action and is applied to the empirical study of two European cases of potential FRS: the integrated management of water basins and the regulation of the European sky through functional airspace blocks. It will be concluded that the current airspace regulation does match the ideal-type of FRS any better than the water resource regulation does. The next research step consists in analyzing the genesis and institutionalization of potential FRS addressing other (super) wicked problems such as climate change and economic, security, health and immigration issues in different institutional contexts as well as at various levels of governance.     

Rethinking corporatism and consensus: the dilemmas of German social-protection reform

This article explores the competing influences of institutional legacies and political negotiation in recent German social-protection reform. Long a paragon of consensus and gradual political change, the German political economy has adjusted poorly to the pressures of fiscal austerity and structural unemployment, creating pressures for an increasingly salient role for the federal government. The article provides a detailed analysis of recent German social-policy and labour-market reforms, arguing that existing literature is poorly equipped to account for this emerging policy-making paradigm. It also suggests that, while the German case illustrates the importance of institutional factors in shaping reform trajectories in advanced industrial democracies, careful attention must also be paid to élites' capacity for negotiating policy outcomes within these parameters.     

The construction of urgency discourse around mega-projects: the Israeli case

Various studies have pointed to urgency in decision-making as a major catalyst for policy change. Urgency evokes a crisis frame in which emotions and cognitive and institutional biases are more likely to be mobilised in support of the policy preferences of powerful actors. As a result, decision-makers tend to be driven by emotions and opportunity, often with detrimental results for the quality of the planning process. Although urgency has such a profound influence on the quality of decision-making, little is known about how, when and by whom urgency is constructed in the planning process of public infrastructure. By means of a discourse analysis, this study traces the timing, motives and ways actors discursively construct a sense of urgency in decision-making on the building of terminals for the reception and treatment of the natural gas that was recently found off the coast of Israel. The results of this study indicate that government regulators, but also private sector actors, deliberately constructed an urgency discourse at critical moments during the planning process. By evoking terms that resonated with the target audience, regulators employed urgency as an instrument to legitimise unorthodox planning practices whilst precluding the consideration of alternative planning solutions. Thus, urgency framing is a means of controlling both the discourse and the agenda—and is therefore an exercise in power maintenance—by entrenched interest groups.     

Centralization, Access, and Influence: The Reagan Administration and the Semiconductor Industry's Trade Complaints

This article explores how the relative centralization of decisionmaking authority can affect a societal group's ability to achieve its interests. It examines the US semiconductor industry's efforts to persuade the Reagan administration to press Japan on its import barriers and its firms' trade practices. I find that the industry's eventual success was facilitated by an institutional change that centralized the structure of decisionmaking authority. Centralization proved more favorable to the industry's influence in this case because it reduced the number of competing state interests involved in policymaking and concentrated authority in state units that shared the industry's preferences. To account for the change in this structure I focus on the interplay between government officials and policy windows. The analysis suggests that centralization may under some conditions be more conducive than decentralized structures to societal influence, and that modest institutional changes can have significant policy implications.     

Structural stress or deliberate decision? Government partisanship and the disempowerment of unions in Denmark

The role of government partisanship in the era of retrenchment is debated. It is argued in this article that partisanship matters for only some aspects of policy. Irrespective of ideological bending, governments accommodate structural pressure as well as short‐term electoral interests to keep the economy on track and implement austerity measures in labour market policy that, in effect, reduce union resources and capacity to mobilise. But only governments of the right exploit structural stress to pursue long‐term interest in curbing the institutional privileges of unions. Aligning short‐ and long‐term interests is easier for social democratic governments during economic expansion, whereas governments of the right have an easier time aligning interests in periods of structural pressure. By analysing a sample of Danish labour market reforms, this article shows that today social democratic governments still defend the institutional privileges of unions and discusses the comparative significance of the Danish case.     

Inside the Autonomous State: Programmatic Elites in the Reform of French Health Policy

This article combines the methods of institutionalist analysis and the sociology of elites to look inside the black box of the French state. We identify key groups of policymakers in the social policy sector and track both their policy preferences and the results of their efforts from the mid‐1980s through the late 1990s. Our conclusion is that budgetary and ideological challenges to existing policies led to the consolidation within the Ministry of Social Affairs of what we label a “programmatic elite,” whose influence derived less from the positions held by its members than from the coherence and applicability of its state‐centered policy model. The competition for legitimate authority between such programmatic elites, we conclude, is an important but often overlooked endogenous source of policy change in situations of institutional stability.