Introduction: The OECD and Policy Transfer: Comparative Case Studies

Abstract

The six articles in this issue examine the role of the OECD in policy transfer. Two articles (Kudrle on international tax agreements, and Legrand and Vas on Australia’s vocational and educational training policy) conclude that the OECD has been influential, albeit in a grinding and lengthy way. Two others (Clifton on the OECD’s “enhanced engagement” policy with five G-20 countries, and Eccleston and Woodward on tax transparency) find the OECD’s influence either patchier or even dysfunctional. Carroll’s article provides a novel analysis of policy transfer through accession processes, while Alasuutari explores transfer in terms of a comparative analysis of policy rationalizations that refer to the OECD as a “standard.” A common theme of all six articles is the way in which policy transfer is driven by exogenous pressures and crises, and how international governmental organizations like the OECD exploit these pressures to protect and expand their global relevance.     

Explaining Australian Economic Success: Good Policy or Good Luck?

Australia and some European countries experienced economic “miracles” in the 1990s that reversed prior poor export, employment, and fiscal performance. The miracles might provide transferable lessons about economic governance if it were true that economic governance institutions are malleable, and that actors deliberately changed those institutions in ways that contributed to the miracles. This paper analyzes Australian policy responses to see whether remediation should be attributed to pluck (intentional, strategic remediation of dysfunctional institutions to make them conform with the external environment), luck (environmental change that makes formerly dysfunctional institutions suddenly functional), or just being stuck (endogenous or path‐dependent change that brings institutions into conformity with the environment). These distinctions help establish whether actors can consciously engineer institutional change that is “off‐path.” While pluck appears to explain more than either stuck or luck in the Australian case, the analysis suggests that both off‐path behavior and policy transfer are probably rare.     

Paradigms and Paradox: The Politics of Economic Ideas in Two Moments of Crisis

This article argues that there is a paradox at the heart of Hall's “Policy Paradigms” framework stemming from the desire to see both state and society as generative of social learning while employing two different logics to explain how such learning takes place: what I term the “Bayesian” and “constructivist” versions of the policy paradigms causal story. This creates a paradox as both logics cannot be simultaneously true. However, it is a generative paradox insofar as the power of the policy paradigms framework emerges, in part, from this attempt to straddle these distinct positions, producing an argument that is greater than the sum of its parts. In the second part of the article, I discuss the recent global financial crisis, an area where we should see third‐order change, but we do no not. That we do not strengthens the case for the constructivist causal story.     

Building European Union capacity to manage transboundary crises: Network or lead‐agency model?

In recent years, the European continent has witnessed a substantial number of “transboundary crises” – crises that cross geographical borders and affect multiple policy domains. Nation states find it hard to deal with such crises by themselves. International cooperation, thus, becomes increasingly important, but it is not clear what shape or form that cooperation should take. This article explores the growing role of the European Union (EU) in managing transboundary crises. More specifically, it reflects on the different ways in which the expanding contours of the EU's emerging crisis capacity can be organized. Using three “performative dimensions” – sense‐making, coordination, and legitimacy – the article discusses the possible advantages and disadvantages of a decentralized, network model and compares it with a more centralized, lead‐agency model. It concludes that the current network model is a logical outcome of the punctuated and fragmentary process through which EU crisis management capacities have been created. It also notes that the shortcomings of this model may necessitate elements of a lead‐agency model. Such “agencification” of networks for transboundary crisis management may well lead to a hybrid model that is uniquely suited for the peculiar organizational and political creature that the EU is.     

The IMF's Rethink of Global Banks: Critical in Theory,Orthodox in Practice

The International Monetary Fund's (IMF) new financial interconnectedness agenda, developed in response to postcrisis calls from G20 to better understand systemic financial institutions, deploys a critical approach that stresses the spatial, political, and institutional dimensions of cross‐border financial networks. It portrays global banks as key nodes in those networks, “super‐spreaders” of systemic risk through complex business models that involve yield search, regulatory and tax arbitrage. Yet this critical view does not translate into its policy advice at country level. In regular surveillance of developing countries, the IMF remains committed to a benign view of transnational banking, even when confronted with growing cross‐border fragilities. During crises of cross‐border banking, the IMF tailors its conditionality to minimize domestic regulatory challenges to cross‐border banking models and to propose crisis measures that create new profit opportunities for transnational banks.     

Why Have Policies Often Remained Symbolic? Understanding the Reasons for Decoupling between Policy and Practice

Why have policies that are unquestioningly accepted as appropriate remained symbolic? To answer the research question, I suggest two possible reasons for decoupling between policy and practice: the characteristics of normative pressure as “the weak enforcement mechanism of law” through the implementation stage and jurisdictions’ capacity to infuse the stories of success based on others’ use to their own day‐to‐day realities. In this article, I seek to reintroduce a seminal contribution of the early institutionalists by challenging the assumption that dimensions of adoption and implementation are synonymous or positively correlated. Empirical findings contribute to provide scholars and practitioners with a larger picture of policy diffusion and support the arguments by Nicholson‐Crotty and Carley that policy learning takes place based on policymakers’ assessment of both “policy actions” and “outcomes” in previously adopting jurisdictions.     

Look to Sweden: The Making of a New Renewable Energy Support Scheme in Norway

Two renewable energy support schemes have spread across Europe: green certificate schemes (GCSs) and feed‐in tariffs (FITs). After a decade‐long policy‐making process, Norwegian decision makers decided in 2011 to adopt a GCS compatible with the already existing one in Sweden and thereby establish a joint Norwegian‐Swedish GCS. The article explores this process of policy transfer, and asks to what extent competition and policy learning contributed to Norway's choice of a GCS. It finds that competition was a barrier to a joint Norwegian‐Swedish GCS rather than (as predicted by some scholars) a driver of policy transfer. In terms of policy learning, it finds that Norwegian bureaucrats systematically were searching for information about renewable energy policy instruments in a process characterised by rational learning. However, this information was not taken into account by elected policy makers, whose learning was unsystematic and almost exclusively influenced by Sweden – making it a process of bounded learning. Finally, domestic factors that facilitated and constrained the policy transfer process are identified in the article. A reluctant bureaucracy defending the status quo policies constrained the policy transfer process. GCS as a market‐based instrument independent of yearly allocations over the annual national budgets facilitated the process by securing strong support in a broad coalition of stakeholder groups and thereby cross‐partisan support. The latter finding may contribute to the literature by underscoring the importance of domestic political factors.     

The scissors crisis in public finance

The late 1970s saw the beginnings of a “scissors crisis” in public finance, i.e., a growing divergence between the expansion of government revenues and the increase in government expenditures. Unless strong measures are taken, the 1980s threaten to become the age of mega-deficits. The sluggish growth of public receipts and the buoyant development of public outlays are linked to a number of structural tendencies in the economies of the industrialized world. Efforts to close the gap have included both tax increases and expenditure cuts, but as more and more governments gain experience with the phenomenon of “fiscal cannibalism,” i.e., that taxes eat up each other, the main thrust of the counter-offensive has come to be directed against the growth of public spending. Current strategies to reinforce expenditures control include such elements as global norms, new indexing techniques, new methods of decentralizing hard choices, better methods of cash management, well-balanced policy packages, and incentives especially designed to stimulate cutbacks and policy termination.     

Financial industry groups' adaptation to the post‐crisis regulatory environment: Changing approaches to the policy cycle

This article explores the advocacy efforts of financial industry groups since the financial crisis. I describe key changes in the post‐crisis financial regulatory environment and argue that financial industry groups have adapted their advocacy strategies to these new conditions in innovative ways. Faced with a more challenging environment, financial industry groups have shifted their emphasis along the different stages of the policy cycle. Specifically, increased issue salience and a strained policy network have weakened financial industry groups' capacity to veto regulatory proposals at the stage of actual policy formulation. Focusing on the advocacy strategies of the global banking and derivatives industries, I show evidence that the response has been to invest in more subtle advocacy strategies which focus on other stages of the policymaking cycle. Self‐regulatory moves attempt to affect the agenda setting stage of policymaking, and a strong focus on the timing, rather than the content of new regulations, has attempted to affect the implementation stage. Such a transformation of advocacy strategies differs sharply from most depictions of financial industry groups simply “blocking” regulatory change since the global financial crisis.     

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.     

Carbon Taxation and Policy Labeling: Experience from American States and Canadian Provinces

A vast economics literature embraces taxation of the carbon content of fossil fuels as the superior policy approach for reducing greenhouse gas emissions. However, experience around the world suggests that carbon taxes face exceedingly difficult political hurdles. Federal experience in the United States and in Canada confirms this pattern. This article reviews sub‐federal policy development among American states and Canadian provinces, a great many of which have pursued climate policy development. With one major exception, explicit carbon taxation appears to remain a political nonstarter. At the same time, states and provinces have been placing indirect carbon prices on fossil fuel use through a wide range of policies. These tend to strategically alter labeling, avoiding the terms of “tax” and “carbon” in imposing costs. The article offers a framework for considering such strategies and examines common design features, including direct linkage between cost imposition and fund usage to build political support.     

Assessing Public Procurement of Innovation as a Cross‐Domain Policy: A Framework and Application to the Chinese Context

Despite the fact that public procurement of innovation (PPI) has become an increasingly popular policy tool, there has been a lack of holistic approaches to assessing policies promoting PPI. This article attempts to address this gap by proposing a framework which links the multiple levels and aspects related to the design and implementation of PPI policies. By adopting a systemic understanding of “public procurement” as well as “innovation policies,” this article positions PPI as a cross‐domain policy which is inherently a mix of procurement and innovation‐related interventions. The article develops an assessment framework using “vertical coherence” and “horizontal coherence” as criteria. It then illustrates the use of the framework by applying it to PPI policies in China. The framework can aid the conduct of ex ante as well as ex post assessment of PPI policies, which can further inform policy design, implementation, and learning.     

Universities and State Policy Formation: Rationalizing a Nanotechnology Strategy in Pennsylvania

Technology‐based economic development programs have become a salient feature of the state policy landscape since the 1980s. While much research exists on the topic, little attention has been given to the processes of policy formation. State programs have moved towards high technology areas emphasized at the federal level over the past decades, and nanotechnology became one of the latest targets. This paper examines the eight‐year process through which Pennsylvania adopted a “state‐wide strategy,” culminating in the Pennsylvania Initiative for Nanotechnology. In this process, programs that responded to the interests of multiple agents came first, and a state policy was formulated after the fact. This pattern of “rationalized policy formation,” as opposed to rational policy formation, may be more common than suspected. Its strengths and weaknesses in this Pennsylvania case are discussed.     

Flatliners: Ideology and rational learning in the adoption of the flat tax

What factors explain the wave of adoption of the flat tax in Eastern Europe? It is argued in this article that, once the first few successes were underway, governments with liberal outlooks toward taxation adopted the reform through a process of rational learning: an often radically new government will tend to adopt the policy based on successful implementation of its neighbours. The issue of policy diffusion is approached by explicitly modeling the different mechanisms that might underlie the process. Little evidence is found for pure ‘bandwagoning’ in the adoption of the flat tax – the presence of other market‐minded reforms do not predict adoption of the flat tax, and contagion measures do not capture the dynamics of the adoption of the reform. Instead, rational learning, where economically right‐wing governments evaluated the success of the reform (as measured by their ability to attract foreign investment) in the medium term, plays the largest role. Rational emulation in a shorter time period contributes to the probability of adoption as well, as does a change to an economically liberal ideology.     

Policy Design and Nodal Governance: A Comparative Analysis of Determinants of Environmental Policy Change in a South African City

Abstract

This contribution focuses on a policy paradox, a failed attempt to introduce a Solar Water Heater bylaw in a South African city in spite of much initial support, both politically and professionally. The paper combines a policy design and a nodal governance perspective to explain why the law failed to materialise. It uses categories developed by the nodal governance approach to characterise the mentalities and technologies of the public agencies involved in the policy process, and explore how distinct policy cultures are nurtured by the networked relations and concomitant learning contexts of these agencies. The analysis shows how the agencies differ sharply on philosophical and practical grounds as to how they typically think about policy values and interventions. This tends to make the collaboration between them difficult as each of them experiences the other as seeking to frustrate rather to assist the policy process. The paper documents how “superstitious learning” became a predominant trait of the bylaw process, as each of the agencies tended to look for evidence in the actions of officials in the other department that confirmed their stereotypical view of them, and reinforced it during the process of interaction. Insufficient attention was given, early on in the bylaw process, to the fact that these departments would have to cooperate closely and that “buy-in” from both was a critical condition for success. Due to this, unfortunate policy design choices fed forward through the implementation process and disabled opportunities for co-learning and collective problem-solving.     

Federal Intervention in the Municipal Bond Market: The Effectiveness of the Build America Bond Program and Its Implications on Federal and Subnational Budgeting

The American Recovery and Reinvestment Act of 2009 (ARRA) included several new federal programs intended ostensibly to “unfreeze” the credit markets as a result of the global financial crisis. One such program, the Build America Bond (BAB) program, aimed to lower the borrowing costs for state and local governments by increasing their access to capital and providing a more generous federal subsidy than the traditional indirect tax exemption subsidy. BABs are taxable bonds sold by subnational governments, which carry a 35 percent direct federal payment subsidy to the borrower. In creating this program, the federal government hoped that the large direct federal subsidy along with greater potential investor interest in taxable securities would result in lower borrowing costs for state and local governments vis‐à‐vis traditional tax‐exempt bonds. This research study examines the relative effectiveness of the BAB program and details the various quantitative and qualitative implications on federal and subnational budgeting by moving from an indirect to a direct federal subsidy approach in facilitating state and local government capital raising.     

Do social policy reforms have different impacts on employment and welfare use as economic conditions change?

This paper uses March Current Population Survey data from 1985 to 2004 to explore whether social policy reforms implemented throughout the 1990s have different impacts on employment and welfare use depending on economic conditions, a topic with important policy implications but which has received little attention from researchers. I find evidence that many reforms operate differently as labor market conditions fluctuate. Although social policies increase employment during economic slowdowns, the largest effects are generated in favorable labor market conditions. The impact of time limits, mandatory job search, and cash diversion programs are particularly sensitive to the macroeconomy, while the earned income tax credit is associated with similar employment effects in most environments. The results vary substantially across policy “carrots” and “sticks,” levels of work intensity, and subsamples of single mothers, but a tentative conclusion is that a strong economy reinforces the positive incentives created by social policy reforms. © 2008 by the Association for Public Policy Analysis and Management.     

Capitalism,nature, socialism a theoretical introduction∗

This article expounds the traditional Marxist theory of the contradiction between forces and relations of production, over‐production of capital and economic crisis, and the process of crisis‐induced restructuring of productive forces and production relations into more transparently social, hence potentially socialist, forms. This exposition provides a point of departure for an “ecological Marxist”; theory of the contradiction between capitalist production relations and forces and the conditions of production, under‐production of capital and economic crisis, and the process of crisis‐induced restructuring of production conditions and the social relations thereof also into more transparently social, hence potentially socialist, forms. In short, there may be not one but two paths to socialism in late capitalist society.

While the two processes of capital over‐production and underproduction are by no means mutually exclusive, they may offset or compensate for one another in ways which create the appearance of relatively stable processes of capitalist development. Study of the combination of the two processes in the contemporary world may throw light on the decline of traditional labor and socialist movements and the rise of “new social movements”; as agencies of social transformation. In similar ways that traditional Marxism illuminates the practises of traditional labor movements, it may be that “ecological Marxism”; throws light on the practices of new social movements. Although ecology and nature; the politics of the body, feminism, and the family; and urban movements and related topics are usually discussed in post‐Marxist terms, the rhetoric deployed in this article is self‐consciously Marxist and designed to appeal to Marxist theorists and fellow travelers whose work remains within a “scientific”; discourse hence those who are least likely to be convinced by post‐Marxist discussions of the problem of capital's use and abuse of nature (including human nature) in the modern world. However, the emphasis in this article on a political economic “scientific”; discourse is tactical, not strategic. In reality, more or less autonomous social relationships, often non‐capitalist or anti‐capitalist, constitute “civil society,”; which needs to be addressed on its own practical and theoretical terms. In other words, social and collective action is not meant to be construed merely as derivative of systemic forces, as the last section of the article hopefully will make clear.     

打破政策“黑箱”的制度设计——基于广州政策兑现实践的研究

如何打破政策“黑箱”是学界和社会关注的重要议题。以广州市政策兑现改革实践为例,探讨如何从制度设计层面来打开公共政策过程中的政策“黑箱”。研究发现,虽然公共政策过程是一个动态且复杂的过程,但是通过统筹政策制定和政策落地两端、主观要素客观化、模糊标准明确化、重塑政府流程等,能够形成确定的决策环境,控制非理性因素,约束自由裁量权,并压缩权力寻租空间,从而可以从源头消除政策“黑箱”的形成土壤。广州市政府政策兑现改革过程中,通过“输入—转化—输出”的制度框架设计,形成了从政策制定到政策执行再到政策结果与评估的政策闭环,并对政策兑现的相关责任单位、流程和时限都进行了严格把控,进而实现对政策“黑箱”内部决策要素的控制。从政策“黑箱”本身入手,破解政策“黑箱”难题,实现政策的阳光承诺和给付,最终形成极具特色和借鉴意义的广州模式。     

Ripples Not Waves: A Policy Configuration Approach to Reform in the Wake of the 1998 Sydney Water Crisis

The aim of this article is to understand why, in the aftermath of the 1998 Sydney water contamination crisis, policy and institutional reform was comparatively minor—despite intense scrutiny and criticism of the framework of water policy in New South Wales (NSW). The article should be of serious interest to scholars interested in crisis and policy change, rather than simply those with a particular interest in water policy in Australia. It frames the Sydney case as a disconfirming one but finds that an understanding of the stability/change relationship in NSW water policy can only partially be understood through applying key contemporary institutional, actor, and interest‐centered explanations. Therefore, it probes the plausibility of an additional explanation and develops the rudiments of a new “policy configuration” approach to help explain policy stability and change. It concludes by suggesting that there is potential for a policy configuration perspective to be tested against other cases.