Bounded Rationality and Policy Diffusion: Social Sector by Kurt Weyland

By Kurt Weyland

Why do very assorted nations frequently emulate an analogous coverage version? years after Ronald Reagan's income-tax simplification of 1986, Brazil followed the same reform although it threatened to exacerbate source of revenue disparity and jeopardize kingdom sales. And Chile's pension privatization of the early Nineteen Eighties has unfold all through Latin the United States and past even supposing many terrible nations that experience privatized their social defense structures, together with Bolivia and El Salvador, lack the various preconditions essential to achieve this successfully.

In an enormous step past traditional rational-choice debts of coverage decision-making, this publication demonstrates that bounded--not full--rationality drives the unfold of techniques throughout nations. whilst looking recommendations to family difficulties, decision-makers usually give some thought to overseas versions, occasionally promoted by means of improvement associations just like the international financial institution. yet, as Kurt Weyland argues, policymakers practice inferential shortcuts on the threat of distortions and biases. via an in-depth research of pension and health and wellbeing reform in Bolivia, Brazil, Costa Rica, El Salvador, and Peru, Weyland demonstrates that decision-makers are captivated through neat, daring, cognitively to be had types. And instead of completely assessing the prices and merits of exterior versions, they draw excessively company conclusions from restricted facts and overextrapolate from spurts of luck or failure. symptoms of preliminary good fortune can hence set off an upsurge of coverage diffusion.

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Extra resources for Bounded Rationality and Policy Diffusion: Social Sector Reform in Latin America

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Innovations are developed in the center and pushed on the weak periphery. Powerful core actors promote an institutional or policy change and use “carrot and stick” to induce less developed countries to adopt this reform. While great powers impose changes directly in their sphere of influence, international organizations (IOs) are nowadays particularly well positioned to exercise forceful pressure on a worldwide scale. In fact, a few core countries, especially the United States, dominate the international financial institutions and use them to advance their agenda.

These experts take inspiration from the Chilean experiment with health privatization and advocate its emulation by other countries. By contrast, a majority of social sector specialists claim that the introduction or extension of the profit motive would further increase costs; it would also threaten social equity because the vast number of less well-off people could not afford to buy quality medical insurance in the market. And the “exit” of the middle and upper class from the public health system would hurt poorer sectors by depleting the state’s revenues for health care.

Neighborhood effects have also been significant. For instance, Chile’s partial health privatization had an impact primarily on other Latin American countries, such as Argentina, Colombia, and Peru. Similarly, Colombia’s health reform affected its neighbor Peru, which also learned from Bolivian innovations. Thus, geographical proximity stimulates emulation efforts in health care. Finally, while the absence of a singular outstanding model allows for less spread of similarity amid diversity in the health arena, basic policy principles, such as the introduction of private competition or the extension of primary care to the poor, did affect many dissimilar countries in similar ways.

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