Policy Change: Theories, Evidence, and Implications

THEORIZATIONS IN POLICY CHANGE are essentially about translating the vision and mission of governments into implementation through policy tools, models, paradigms, and techniques. Addressing societal challenges through policy requires governments to be more open and receptive to ideas from the private sector and civil society, but it is often hard to innovate in large bureaucracies. The policy diffusion process is slow; this explains why innovation concentration at the upper rung of the spectrum is a major driver of uneven growth in productivity and prosperity across industry sectors and regions. This has implications for the high levels of inequality in society. Varying social, political, economic, and cultural settings inform how policies are developed and implemented.

For complex policy problems that require unconventional nonlinear solutions, ill-defined problems can generate large inefficiencies along the policy value chain. Patton et al. (2012) in Basic Methods of Policy Analysis and Planning, describe a set of systematic procedures that can help address a wide range of policy problems. The authors’ six-step model of policy analysis summarizes the problems of modern society below:

• 1.

  They are not well defined.

• 2.

  Their solutions cannot usually be proven to be correct before application.

• 3.

  No problem solution is ever guaranteed to achieve the intended result.

• 4.

  Problem solutions are seldom both best and cheapest.

• 5.

  The adequacy of the solution is often difficult to measure against notions of the public good.

• 6.

  The fairness of solutions is impossible to measure objectively.

Following the rationalist model, they argue that policymaking is based on a rigid framework that follows some sequences like problem definition, possible outcomes, feasible alternatives, selection, and policy implementation. The policy process is essentially about policy actors interacting with public, private, academic, and civic stakeholders within existing institutional arrangements to influence policy outcomes. To the extent that citizens interpret the world around them through the lens of their beliefs, while also learning by combining systematic and scientific evidence with heuristics, policymakers must strike a right balance between evidence-informed policymaking and policy diffusion. Policy designs and implementations based partly on the experiences of the past, or other policies, can benefit from a wider range of examples.

Political economy scholarship is largely about devising a framework for understanding how policy choices emanate from the interactions between politicians and economic elites. In their 2006 book, Economic Origins of Dictatorship and Democracy, Daron Acemoglu and James Robinson argue that political power and resource allocation pattern influences how various social groups prefer different political institutions. Democracy, in their view, is preferred by most citizens and opposed by elites, but due to forces beyond their control, elites maintain social stability by credibly transferring political power to the citizens. They identify six channels: the strength of civil society, the structure of political institutions, the nature of political and economic crises, the level of economic inequality, the structure of the economy, and the form and extent of globalization.

Change is a constant feature of the capitalist mode of production, evidenced by the continuous churning that enables old firms, processes, paradigms, and products to pave the way for new ones, in alignment with Joseph Schumpeter’s submission that innovation happens through a “perennial gale of creative destruction” that reorganizes the economic structure from within by “incessantly destroying the old one, incessantly creating a new one” (Schumpeter, 1942; p. 83).