Policy Diffusion: Literature Review
The modern world has seen various kinds of public policy innovations, including tariff reduction, privatization, and women’s rights protection policies. At the same time, there has been a general wave of policy similarities between countries, with some borrowing policy ideas from each other in what may be seen as a character of globalization- the attempt towards uniform global standards. This spread of generally similar policies across the globe is what is known as policy diffusion. The central premise here is that- far from the conventional notions that policy choices are only influenced by domestic conditions; a country’s policy choices are influenced by those of other countries (Fennimore & Sikkink, 2001; True & Minstrom, 2001; Dobbin et al., 2007; Quinn & Toyoda, 2007).
However, policy diffusion is not just a character of the globalization age. It can be traced as far back as the signing of the Treaty of Westphalia in 1648, an event that saw the concept of territorially bound nation-states start to spread to other places. The nineteenth century saw an increasing prevalence of participatory democracy, especially in the aftermath of the American and French revolutions. Later global models of economic policies came to include mercantilism and Keynesianism, among other orthodox macroeconomic policies. Therefore, the most important character of policy diffusion since the late 20th century is the rapidity of the wave of liberalization, its wide geographic scope as well as its conjoining of both economic and political reforms, such as the notion that complete market liberalization can only work in a completely democratic society. Dobbin et al. (2007) attribute this liberal nature of recent political and economic reforms to broad historical forces, including: the economic expansion in the so-called American Century; the victory of the Allied side in the Second World War; the dwindling influences of the interventionist economic models of Germany and Japan; the silent death of communism; and the 1990s unprecedented economic growth in the United States, which was considered as the epitome of paradigmatic liberal state.
In the face of these events, sociologists, political scientists, and economists have sought to understand and explain not just the general phenomenon, but also the pattern of particular policies’ diffusion to certain countries at particular points in time.
Consequently, there are four theories that aim to explain the phenomenon of policy diffusion across countries. Constructivists generally attribute issues of policy to expert epistemic communities and international organizations who put economic progress and human rights together. Coercion has also been cited as one of the causes of policy diffusion, which includes powerful nation-states and international financial institutions (particularly the World Bank and the International Monetary Fund, IMF) use promises of aid and sanctions to ensure fiscal conservatism and free trade, etc. Another theory is that countries borrow policies from other countries as a matter of competition; that is, an attempt to attract investment by reducing the constraints (such as trade tariffs). Finally, another premise holds that countries learn from other countries’ policy experiments (Dobbin et al., 2007).
This literature review will explore the range of literatures on policy diffusion, particularly as they touch on the various theories.
- Policy Diffusion: Background
Policy diffusion as a discipline is believed to stem from social sciences. Francis Galton, a famous British social scientist and statistician, was the first to make attempts at finding similarities of norms and ideas between tribes and races. In an anthropology conference in 1889, Francis Galton urged the need to examine more extensively the extent to which the compared tribal and/or racial norms and ideas are independent. In the same conference, Galton suggested the premise that it could be possible different tribes were similar in norms and ideas because they derived from the same sources. Galton, therefore, introduced what he referred to as the ‘non-independence of units’ (Giraldi, 2012). For many years, many researchers treated this non-independence of units as a problem. Researchers were therefore expected to try to control this ‘problem’. In the end, though, this marked the beginning of the study of policy diffusion.
The earlier studies of policy diffusion- and which continued for many years- focused on sub-national comparisons, most especially within the context of American federalism. The earliest policy diffusion systematic analyses were motivated by what were called ‘policy laboratories’ where innovations were tested and spread across the country if successful. Over the years, these studies have focused from studies of geographic effects to more sophisticated analyses of the patterns of diffusion. These studies have taken a number of approaches. A dyadic approach involves the pairing of countries in relation to values and ideas as well as policy behaviors. This was one of the earliest approaches and was initially used to study diffusion across US states and later used to investigate diffusion between countries. It has, therefore, proved important in the study of transnational diffusion, such as how the EU has influenced the study of policy making between the member-states (Shipan & Volden, 2006; Fuglister, 2012). Another approach has- not necessarily- avoided this dyadic approach, focusing more on individual and organizational behavior (Rogers, 2003).
- Policy Diffusion versus Policy Convergence
Many mistake policy diffusion with policy convergence. In relation to the matter of interdependence, diffusion has also been characterized as a process rather than as an outcome (Elkins et al., 2006). In other words, diffusion is an interdependent process that favors the spread of policies rather than as a convergence that result from it. In this respect, diffusion has been presented as an S-curve. In this curve, the rate of diffusion increases up to a certain point where the curve starts to flatten as it approaches the ceiling. In this respect, diffusion is presented as the process that results in an adoption pattern and not that at the end of a certain period of time many countries have adopted a policy. It is in this respect that diffusion is not the same as convergence. Therefore, convergence does not necessarily have to result from diffusion, although it may. When it does, convergence becomes the outcome of diffusion and not the nature of the process itself. Indeed, it is of paramount importance to distinguish between diffusion and convergence. Moreover, this definition does not include hierarchical processes like conditionality as these are not characterized by horizontal interdependence (Elkins et al., 2006; Giraldi, 2012).
- From Traditional Sociological to Constructivist Studies of Policy Diffusion, and the Forces of Globalization
Dobbin and Dowd (2000) argue that the study of diffusion by individuals as well as social movements and institutions stems from sociology. Indeed, sociologists have studied policy diffusion since the 1970s, through the lens of social construction. For instance, Meyer adopted what he called a ‘world polity’ approach (Meyer et al., 1992). This model depicts a progressively global political culture that, first, involves a set of appropriate social actors, including individuals, organizations, city-states, nation states, and fiefdoms, among others. Second, this global culture entails appropriate goals for society, which increasingly sees territorial conquest and eternal salvation replaced by social justice and economic growth.
Next, there are existing and suggested strategies for achieving these new societal goals, which have also seen another change; plunder and incantation replaced by reduction of tariff and manipulation of interest rates. Both the legitimate outcomes and appropriate strategies are common social constructs that vary across periods (Dobbin et al., 2007). For instance, the roles of trade tariffs are socially constructed, and this construction evolves over time. Indeed, trade tariffs have not been understood the same way over the years (Weber et al., 1992). In line with Weber’s ‘world polity’ model, it has become vital to understand the meaning of social action and policy, as well as social actor and policy maker. It is in relation to these changes in conceptualization that we see another approach to the question of global social and political trends; that is, the rise of constructivism. In this regard, early sociological studies and accounts of diffusion were mainly concerned with the social network connections; constructivism has focused mainly on cultural theorization of policy practices (Dobbin et al., 2007).
Constructivism has also focused on policy diffusion as a part of the “role of international society in determining and maintaining order in an anarchical international setting” (Dobbin et al., 2007, p.467). Finnemore and Sikkink (2001) started by defining the nation-state as the first appropriate collective actor in policy diffusion. This premise has best manifested itself in national security policy and how it has diffused across the world. Finnemore and Sikkink (2001), for instance, examine how cultural meaning has historically shaped the reconfiguration and redefinition of national security theory and practice years after the end of Soviet communism. In more recent times, constructivists have been interested in how international agents and governments have actively constructed theories of action as well as corresponding behavior models (Finnemore & Sikkink, 2001).
The traditions of nation-states are socially constructed, following similar patterns as the conventions of families, religions and other social movements. Even as policy makers believe they are trying to divine best practices and, in this respect, believe they are working under teleological assumptions regarding the trajectory of policy, they are hardly ever able to determine whether and how an innovation impacts upon the status quo. Rather, policy choices are hardly ever based on solid evidence. Instead, policy choices may be more as a result of abstract theories as well as fads and revered exemplars (Dobbin et al., 2007).
The early studies by constructivists tracked the diffusion of policies on education and human rights from the developed nations to the developing world. These studies showed that the developing world did not change their policies to adopt these new policies because they were developmentally ready, but mostly- if not entirely- as a result of the influence from the developed world, largely believing that these developed nations knew better (Weber et al., 1992). Meyer et al.’s (1977) paper, The World Educational Revolution, 1950-1970, found that in the twenty years after the Second World War, educational enrollments increased significantly in all countries. This wave of enrollments, the document suggested, was driven by the premise that mass schooling was key to providing growth and democracy. Secondly, the study also found that social, political, and economic developments did not predict mass schooling in any of the countries. Diffusion happened everywhere across the world irrespective of local characteristics, including whether a country “a real economic need for an educated workforce or the economic infrastructure to support mass schooling” (Meyer et al., 1977, p.351). This supports the general view that education is an integral part of modernity.
The same trend of policy diffusion from the developed to the developing world is evident in the human rights policies. According to Boyle and Preves (2000), countries in the developing world signed human rights treaties as a sign of their commitments to global norms. The irony is that, even as these countries were signing to the hums treaties, Amnesty International was chiding many of them for human rights abuses.
Generally, most constructionist studies have ignored the broader political ideals that influence policy choice. However, Quinn and Toyoda (2007) take interest in this, focusing on the trends of anti-capitalist sentiments that have accompanied policy liberalization. They associate global communist party voting with controls on capital account.
Constructivists are also very much interested in how public policies become socially accepted, believing that understanding these elements can provide vital insight how policies diffuse. In comparison to the premises of coercion theorists, constructivists believe that, while the US and World Bank may aims to promote models of policy, it is actually the typical willingness of followers that make these aims possible. In comparison to the learning theorists, constructionists argue that policy makers are confined by bounded rationality, the lack of information as well as cognitive capacity to assess and evaluate the costs and advantages of all possible alternatives (Dobbin et al., 2007).
Generally, the social acceptance of policies can happen in three main ways. First, there is influence from leading (often-developed) countries at as exemplars that other countries then follow. In this regard, policy makers mimic the countries that have adopted certain policies and shown evidence of success. Since it is hard to empirically isolate causal processes, followers may mimic the whole policy or just a part of it, which could be anything. Moreover, this copying may be ritualistic, which means that countries may mimic these elements of policy, particular the successful elements without necessarily understand the factors that made such success possible. For example, Walker (1969) found that ten US states had copied California’s fair trade policy that they experienced the same typographical errors that California experienced. Organizational constructivists developed the prediction that the leading groups that policymakers copy are mainly the largest and richest countries, and at time the fastest growing countries.
This has been the main trend in the adoption of democracy across the world. Indeed, many have criticized the promotion of the West’s model of democracy to countries in different regions across the world without considering the contextual factors and how these may impact upon the work of democratic institutions, such as elections and , ultimately, the implementation of democratic governance (Kirkova & Milosevki, 2014). One important factor in this regard is the concept of national psyche. In other words, the psyche of the people must be in such a way that the people can easily adjust to the pillars of democracy.
The second influence can come from expert individuals, think tanks and other institutions. These can theorize about the impacts of new policy, which then gives policy makers the rationale for adopting the policy. DiMaggio and Powell (1983) refer to this situation where experts advocate new norms of policy as normative isomorphism. In this regard, a policy spreads without necessarily there being an exemplar. This may imply originality. However, the experts do build on the experiences of the leader. The only originality, therefore, is not necessarily about the policy idea. Rather, unlike the unreserved copying cited in the first point, in this case the experts may look to fit the policy within the country’s unique circumstance, which may also involve looking for solution to the problems already experienced by the leader (Strang & Macy, 2001).
Relating to this point, there are often question on which expert groups to believe. Different management specialties, for instance, have been the focus for new organizational theories, including personnel and finance specialists. This question is inspired by the apparent tendencies of these interest groups to serve their own self-interests. For instance, different professional groups across various US states have been found to promote their own systems of licensing (Zhou, 1993). However, there is also the question of areas of interest for different groups, which may give them the superiority edge over other groups of experts. For example, domestic and international NGOs have been the main definers of the norms of human rights policy (True & Minstrom, 2001). National expert groups also matter, such as in the creation of corporate governance regulations. Indeed, over the years, the balance between national and global expert groups has shifted, with more effort toward collaboration. For example, according to Ramirez et al. (1997), “before 1930, the extension of suffrage to women hinged the number of national organizations promoting suffrage and after 1930 it hinged on a nation’s participation in a pro-suffrage international alliance” (p. 742). Indeed, over the years, global expert groups have grown in importance, which largely explains why public policies believed to be focused on development have increasingly spread across nation-states and allowed development at all levels (Ramirez et al., 1997).
There is evidence that the norms of new policies lack power, with emergent signs that countries mostly take up such new policies when they have no much hope and/or plans to put the new policies into practice. For example, ample empirical research shows that most countries in the developing world often fail to implement these policies they adopt. For example, Strang and Chang (1993, cited in Ramirez et al., 1997) track the ratification and implementation of the welfare rights treaties of International Labor Organizations. They find that the treaties only do have an impact on the developed nations and not much on the developing countries. Moreover, a study by Cole (2005) finds that young (newly-established) states are more likely to agree to international human rights covenants as a symbol of the commitment, but are less likely to sign to optional protocols that would facilitate enforcement. Regardless of these limitations, though, the most important point in this paper is that these countries are attracted by the new ideals manifested in the new policies.
Thirdly, specialists can influence acceptance by their contingent arguments regarding the appropriateness of policy, deciding that the policy is right under some of the contextual circumstances. This dimension is based on the premise of the theorization of perceived similarities between different countries. Both experts and policy makers engage in deliberate building of theory on what kinds of states are supposed to adopt which kinds of policies. In this respect, women’s rights conventions have adopted two strategies: the form of liberal democracy; and the form of Islam (Wotipka & Ramirez, 2007).
According to DiMaggio and Powell (1983), policy is the base upon which countries can decide the relevant peers from which to learn. Others hold that socio-cultural relationships between countries can lead to psychological proximity among nations (Rose, 1993, cited in Elkin, 2006).
It is also possible that simple network connections may be at work here. For example, organizational studies cite the fact that firms learn new practices from other firms even through weak connections. Equally, countries may mimic their neighbors that they see in close range. Sikkink (1993) confirms this in his study in which he finds that issue networks play a significant role on public policy in Latin America. On the same note, Ramirez et al. (1997) finds the regional spread of women suffrage, such as the ability of regional neighbors with suffrage to influence holdouts between 1930 and 1990. Studies have mostly aimed to empirically distinguish whether the effect of neighbors is reflected in the flow of knowledge and trade contracts, among others (Simmons & Elkins, 2004; Lenschow et al., 2005; Beck et al., 2006).
This is the same pattern that Tolbert and Zucker (1983) find in municipal government and civil service reforms, where reforms spread to those that need them. This implied that policies do reach a certain adoption threshold and from them some start to take the policy for granted, and only those to whom the policy is necessary will adopt it. The underlying premise here is that policy diffusion is driven by changes in ideas. Policy makers, therefore, draw inspiration about how to achieve political justice and economic growth from the environments in which they find themselves. Considering the changing norms and uncertainty that accompanies the most effective policies, policy makers are more pushed to copy the policies that experts seem to be promoting; that leading countries seem to embrace; and that their (regional) peers seems to prefer (Dobbin et al., 2007).
- Factors of Policy Diffusion
It can be said that the constructivists have a generally positivist view of policy diffusion. In this regard, constructivists seem to believe that the forces that help or deter policy diffusion are inherent within the nature of policy diffusion, including the premise that countries- for one reason or another- generally choose to copy policies from other countries. However, many other factors play a significant role in the initiation and process of policy diffusion. One such factor is coercion.
Unlike the constructivists’ underlying premise of liberalization, coercion theorists cite antiliberal factor in the process of policy diffusion. Governments, international organizations as well as domestic and international NGOs can use coercion to force governments to adopt certain policies. Coercion can be exercised through varies mechanisms: physical force; manipulation of economic benefits and costs; as well as monopolization of information and expertise (Owen, 2002. The parties most accused of coercion as a strategy for promoting policies include the US government, the European Union (EU), the World Bank and International Monetary Fund (IMF). The IMF, for instance, has historically used coercion to shape policies in countries that rely on the entities over which they have control for trade, aid, foreign direct investments (FDIs), loans, grants and security, among others. Others refute the premise that coercion is a force of policy diffusion since the change of policy is, consequently, no voluntary. Indeed, military coercion may not mechanism of policy diffusion. However, the use of the various forms of persuasion, unilateral policy choices as well as loan and aid conditionality has in many cases shaped various countries policy choices. Essentially, coercion refers to a change in incentives given to nations. A good example is when the US implies that reduction of trade tariffs will put a nation in its favor or when the World Bank uses the condition of financial aid on a country’s fiscal austerity. However, political scientists see hegemonic ideas and leadership on policy as the soft side of coercion (Owen, 2002; Gleditsch & Ward, 2006).
Conditionality is believed to be the hard side of coercion. It refers to when an entity, such as the EU or IMF, sets certain requirements for countries seeking aid and loans, among other considerations. Powerful nations have historical used conditionality, either directly or through other international institutions to have other countries- especially in the developing world- adopt certain policies that may help their intentions. Mosley et al. (1995) traced the use of conditionality by the World Bank, which culminated in the largely disastrous Structural Adjustment Program loans in the 1980s. The developing countries, particularly, often succumb to conditionality as they are in need of financial aid to, among other things; invest in infrastructure that they may not be able to fund through private markets (Vreeland, 2003). Using these financial needs to their advantage, donors and lenders choose to use condition support on political and economic reforms that they deem necessary.
It may be hard to understand why powerful actors may be interested in other countries’ policies and institutions. According to Owen (2002), political scientists believes that there is need – on the part of the actors- to enhance international stability and national security, regardless the high costs of such policy interventions. From the dimension of economists, these actors believe that such interventions can help curb moral hazard problems that may cause system-wide financial instability (Mishkin, 1999), such as by encouraging the repayment of sovereign debts and protection of lenders’ investments (Khan & Sharma, 2001).
Regardless of these efforts, many researchers observe that these efforts hardly ever have the intended effects. For instance, economists have noted that IMF’s conditions hardly ever have the impact for which they are intended, a case in point being the failure of IMF’s structural adjustment program (Svensson, 2000; Santiso, 2003). More other stories have exposed noncompliance among the conditioned countries with the IMF programs. One of the reasons for this the failure of the IMF to take into consideration the contextual factors (such as regulative frameworks and political stability) that may impact on the implementation of the policies, largely assuming the same efforts will succeed in one country as they did in another. For example, the requirements of structural adjustments program were uniform regardless of the adopting country, from Africa to Latin America despite these regions an countries being socially, economically and politically apart. Naturally, there was bound to be failure in some countries. Cordealla and Dell’Ariccia (2002) attribute this to not only the recipients’ lack of institutional capacity to change policy, but also the inability of the IMF to monitor the recipients and whether they are implementing the elements of the policies.
However, there is evidence showing that these efforts have been successful in other places. For example, the promotion of democracy in Latin America is attributed to- if only slightly- to a democracy clause that was contained in an EU’s free trade negotiation with the countries in the region. Such conditions are also said to have promoted human rights in some places (Hafner-Burton, 2005).
International interdependence is a major factor that influences domestic decision-making through the processes of transnational diffusion. In other words, the international context, including the norms, ideas and policies promoted by other countries and international organizations often influence the decisions that a country makes.
Indeed, the premise that international interdependence is a powerful driver of national change has been of major interest for academic research. Many studies seem to agree on a common denominator that diffusion results from interdependence. This premise is strongly implied in Dobbin et al.’s (2007) description of international policy diffusion as characterized by the systematic conditioning of policy decisions of one country’s government by other countries’ prior policy choices. This definition is broad and general, implying that diffusion does not just happen at the international level and covers more than just national governments and policies, but also specific standards, instruments and institutions, ideational frameworks, institutional settings and policy models, among others. Huntington (1991), for instance, attributes what he refers to as the “third wave of democratization” (p.14) to a possible process of interdependent diffusion. Moreover, many international typologies seem to strongly suggest that national policies have stemmed from the same models. For example, the similarities between the ‘Bismarckian’ and ‘Beveridgean’ welfare state models seem to confirm this premise.
According to Most and Starr (1990), diffusion processes are a logical fit within the set of questions that comparative politics and foreign policy analysts traditionally ask. Diffusion, therefore, stems from many theoretical and classic concepts. Rosenau’s ‘linkage politics’, for instance, is premised upon relationships of any recurring behavior sequence that originate in one system and provokes reaction in another.
Diffusion has been directly tied to disputes that have accompanied the definition, causes and impacts of globalization. The link between policy diffusion and globalization may have been spurred by Keohane and Milner (1996) in their definition of ‘internationalization’ as “the process generated underlying shifts in transaction costs that produce observable flows of goods, services and capital” (p.4). With this definition, Keohane and Milner (1996) set in motion the conceptualization of globalization as a matter of- although perhaps not limited to- economic openness as well as the extent to which countries embrace exchanges of international economics.
However, the focus on interdependence has shifted attention from general openness towards specific interdependence patterns, which has significantly led to better conceptualization and analysis of not just the nature of globalization and internationalization, but also the consequences of these two. In this respect, the impact of financial institutions, such as the World Bank and the IMF, on domestic policy making, as well as the conditionality requirements of the European Union (EU) on its new member states can also be understood within the frame of transnational diffusion (Schimmelfennig, 2008; Mukherjee & Singer, 2010).
- Economic Competition
This premise stems from DiMaggio and Powell’s (1983) concept of ‘institutional isomorphism’, which held that organizations (and countries) competed for resources and customers as well as political power, institutional legitimacy and social and economic fitness. This concept has been applied to various policies, practices and organizations.
This premise is similar to constructivism in the sense that it expresses an intentional will on the part of governments to adopt new policies, so that taking from other countries is only as a strategy for the pursuit of the best options. In this respect, the main drive for policy diffusion is the effort of a country to realize the same benefits that have been enjoyed by other countries where such polities have been adopted. In other words, countries may adopt policies to help them compete for export and capital markets. In the modern world, for instance, many governments realize that market-friendly policies can significantly attract foreign direct investments (FDIs) and ensure their exports are competitive (Brueckner, 2000; Cai & Treisman, 2004; Simmons & Elkins, 2004). According o Meissner (2002), this takes after the gold standard framework of 1870 when countries trade intensively with other countries, with the key predictors of benefits being the share trade between one countries and its trade partners.
In today’s marketplace, countries are increasingly under pressure to emulate its competitors who simplify regulatory requirements, reduce trade tariffs (such as tax burdens) and ameliorate investment risks (Brueckner, 2000; Simmons & Elkins, 2004). There is significant evidence of this. For example, Brueckner (2000) cites how US states have always competed for investment by using investment incentives to industry (Cai & Treisman, 2004). This reflects the general trend of policy-related competition in the developed world, where parties adopt policies that boost market harmonization and market conformation (Sinn & Ochel, 2003). Other cited axes of policy-related competition for investment include corporate tax rate and capital account liberalization (Simmon and Elkins, 2004).
Indeed, competition has been found to be a significant influence on policy choices. In fact, completion may be said to have had the biggest impact on the developing world than eve, coercion. Governments in the developing world have increasingly sought to deregulate capital flows to win investors over these competitors (Simmons & Elkins, 2004). In Latin America, for instance, many countries chose to follow Chile’s liberalization efforts fearing that Chile would beat them as the region’s leading host for capital flow. Other governments have remodeled their legal systems to be similar to that of the US an effort to compete for capital (Twining, 2004).
In conclusion, this paper was a literature review on the phenomenon of policy diffusion. So far, as the literatures discussed show, policy diffusion can be traced back to the earliest traces of globalization, whose first signs can be traced back to the late 19th century, although the main evidence of policy diffusion can be found in the 1950s.
Essentially, policy diffusion is accompanied by the trend towards global uniformity of standards and national policies. In relations to globalization, these efforts are not necessarily driven by the need to be the same as other countries, but to copy the policy traits that earn other countries competitive edge in the global marketplace. For example, reduction of trade tariffs (such as tax burdens) encourages foreign direct investment, which can significantly boost national economies.
However, as the literatures also show, coercion can also play a major role in policy diffusion. This review focuses mainly on the aspect of coercion considered to have the most impact; that is, the use of conditionality. Indeed, conditionality has been used over the years to push come countries to adopt certain policies. For example, the World Bank- perhaps most famously- used financial conditionality (as well as sanctions) to force countries in the developing world to adopt the requirements of structural adjustment programs (SAP).
Regardless of what pushes a country to copy a policy, whether these policies become effective is another matter altogether. For example, these countries may only adopt these policies to win aid (in the case of coercion) rather than a true will to change. This becomes one of the biggest gaps; the lack of monitoring (by the adopting country and/or other interested parties). Monitoring is not just about the tracking of a policy to see whether it is implemented. Rather, there should also be an assessment of conditions to ensure that the adopting counties have what it takes to implement the polities. This is perhaps one of the reasons that the top-down approach to policy making is giving way to down-up approach, which takes into account the contextual circumstances that may help or hurt policy making within a country.
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