The Global Diffusion of Public Policies: Social Construction, Coercion, Competition, or Learning?

Social scientists have sketched four distinct theories to explain a phenomenon that appears to have ramped up in recent years, the diffusion of policies across countries. Constructivists trace policy norms to expert epistemic communities and international organizations, who define economic progress and human rights. Coercion theorists point to powerful nation-states, and international financial institutions, that threaten sanctions or promise aid in return for fiscal conservatism, free trade, etc. Competition theorists argue that countries compete to attract investment and to sell exports by lowering the cost of doing business, reducing constraints on investment, or reducing tariff barriers in the hope of reciprocity. Learning theorists suggest that countries learn from their own experiences and, as well, from the policy experiments of their peers. We review the large body of research from sociologists and political scientists, as well as the growing body of work from economists and psychologists, pointing to the diverse mechanisms that are theorized and to promising avenues for distinguishing among causal mechanisms. 449 A nn u. R ev . S oc io l. 20 07 .3 3: 44 947 2. D ow nl oa de d fr om a rj ou rn al s. an nu al re vi ew s. or g by H A R V A R D U N IV E R SI T Y o n 09 /1 6/ 08 . F or p er so na l u se o nl y. ANRV316-SO33-21 ARI 24 May 2007 11:8 All sorts of public policy innovations, from women’s rights protections to tariff reductions to privatization, have spread around the globe in the last half century. Most of the new policies have been framed as part of a project of political and economic liberalization, but policy diffusion is nothing new. The signing of the Treaty of Westphalia in 1648 heralded the spread of the territorially bounded nation-state (Krasner 1993, Thomas et al. 1987). Participatory democracy became increasingly prevalent in the nineteenth century following the French and American revolutions (Boli 1987). Mercantilism, orthodox macroeconomic policies, and Keynesianism all enjoyed extended periods in the sun as global models for economic policy (Gourevitch 1986). What is distinctive about the late twentieth century wave of liberalization is its rapidity, its wide geographic reach, and its conjoining of political and economic reform. How can this latest wave of diffusion be understood? The liberal character of recent political and economic reforms can be traced to broad historical forces: the American Century of economic expansion, the victory of the Allies in World War II, the waning of the German and Japanese interventionist economic models, the unraveling of communism, and the unprecedented economic growth during the 1990s in the paradigmatic liberal state, the United States. The diffusion theories developed by sociologists, political scientists, and economists seek to explain not only the general phenomenon, but also the pattern of diffusion of particular policies to certain countries at specific points in time. Why does Brazil reduce tariffs, Britain privatize, or Taiwan expand women’s rights when they do? Most diffusion research utilizes quantitative data on the timing of policy shifts among countries to test hypotheses. Diffusion theorists of different stripes share the view that the policy choices of one country are shaped by the choices of others, whereas conventional accounts of policy choices point only to domestic conditions. The power of global models is increasingly taken for granted even in studies focusing on domestic economic and political conditions. Thus, scholars of Latin America take for granted that liberalism is on the march and try to explain how politics or state institutions condition adoption (Schneider 2004). A review of the contending theories of diffusion—constructivism, coercion, competition, and learning—is long past due. The paradigms have developed independently, with the result that two scholars may look at the diffusion of tariff reductions and draw entirely different conclusions about the cause. Our goal is to explicate the four prevailing theories of diffusion and to suggest ways to design empirical tests that help to distinguish among them. In practice the diffusion mechanisms we discuss are sometimes commingled, and sometimes the lines between them are blurred. But in many instances, it is possible to distinguish one mechanism from another empirically. The theories we survey trace policy diffusion either to changing ideas or to changing incentives. Constructivists and learning theorists agree that changes in ideas lead to changes in policy, although constructivists point to theory and rhetoric as the source of new ideas and learning theorists point to rational, observational deduction. Competition theorists clearly point to shifts in incentives, and so do most of the hard coercion theorists. The soft coercion theorists point as well to hegemonic ideas and policy leadership.