Past Event

INET Seminar: Bill Ferguson "The Political Economy of Collective Action and Radical Reform: Outline for a Conceptual Framework"

The Political Economy of Collective Action and Radical Reform: Outline for a Conceptual Framework

Prepared for the INET Seminar, Martin School, Oxford University, 8 June 2016 William D. Ferguson
Gertrude B. Austin Professor of Economics
Grinnell College
ferguso1@grinnell.edu

ABSTRACT

This paper outlines a theoretical framework for analyzing processes of radical reform, with focus on a host of collective-action problems (CAPs) faced by reform activists. CAPs arise when the pursuit of individual self-interest generates undesirable outcomes for various groups. CAPs occur at two basic levels. First-order CAPs involve multiple manifestations of free-riding, and social conflict related to the provision of public goods, promotion of public externalities, avoidance of negative externalities, and limiting the use of common resources, all broadly defined (e.g., institutions are a type of public good). Resolving first-order CAPs requires negotiating agreements or arrangements for sharing associated costs and benefits. Second-order CAPs involve orchestrating sufficient coordination and enforcement to render such agreements credible, and thus implementable.

Radical reform displaces established social equilibria. To promote such dramatic change, activists must circumvent first-order CAPs of free-riding on others’ efforts and risks, as well as second-order CAPs of establishing mechanisms of large-scale coordination and enforcement of various participatory agreements. Second-order CAPs in particular possess both expectational and motivational dimensions. To address these issues, this paper incorporates the following concepts: social preferences, policy subsystems, sources of power, institutional stability, institutional change, and information cascades in social-networks. Furthermore, this paper locates these interactions within a partially endogenous punctuated-equilibrium dynamic—a dynamic within which incremental reforms sometimes sow the seeds for radical reform.

Discussion proceeds as follows. Relatively simple game models illustrate first-and second-order CAPs, whose severity and resolution respond to pressures for conformity that accompany reciprocal interactions and social norms. A punctuated-equilibrium dynamic, applicable to both meso-level policy subsystems and macro-level institutional systems, arises from economies of information- processing and asymmetric distributions of power. Long periods of stability incorporate incremental adjustments to institutional procedures (typical reforms). Yet, an accumulation of small adjustments—often combined with external developments—eventually undermines system stability. Discussion proceeds to relate specific types of gradual institutional change, categories of agents, and degrees of institutional specificity to specific dynamics that affect both the legitimacy of status quo arrangements and the relative power of dominant coalitions. When accumulated changes in key variables (e.g., resource distribution) cross certain critical-mass thresholds, expectations that underlie participants’ reform-related (strategic) decisions can shift dramatically. Endogenous punctuation follows. Punctuation, moreover, operates as an information cascade in a large social network, and power relationships (e.g. network betweenness) condition key interactions. A sufficient succession of incidents in which actual opposition activity exceeds prior expectations— often induced by a focusing event—may then shift expectations sufficiently to motivate widespread opposition: a window of opportunity for activists.

Ultimately, this paper provides conceptual foundations for examining how reformers can, on occasion, succeed in instigating or facilitating radical reform—and why they so often fail. This framework can then spawn a host of more targeted models and multiple empirical hypotheses. 

Details:

08 June 2016 11:00 -


Location

INET Oxford

Eagle House, Walton Well Road, Oxford, OX2 6ED