Bounded Rationality and Policy Diffusion: Social Sector by Kurt Weyland PDF

By Kurt Weyland

ISBN-10: 0691129746

ISBN-13: 9780691129747

ISBN-10: 0691134715

ISBN-13: 9780691134710

Why do very varied nations frequently emulate a similar 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 country sales. And Chile's pension privatization of the early Nineteen Eighties has unfold all through Latin the US and past even if many bad international locations that experience privatized their social safeguard platforms, together with Bolivia and El Salvador, lack a number of the preconditions essential to accomplish that successfully.

In a tremendous step past traditional rational-choice money owed of coverage decision-making, this e-book demonstrates that bounded--not full--rationality drives the unfold of strategies throughout nations. whilst looking suggestions to family difficulties, decision-makers frequently think about overseas versions, occasionally promoted through improvement associations just like the international financial institution. yet, as Kurt Weyland argues, policymakers observe inferential shortcuts on the chance 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 by way of neat, daring, cognitively on hand versions. And instead of completely assessing the prices and advantages of exterior types, they draw excessively company conclusions from constrained information and overextrapolate from spurts of good fortune or failure. symptoms of preliminary good fortune can hence set off an upsurge of coverage diffusion.

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

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While IFIs cannot impose innovations on domestic decision-makers against their will, they may make them willing to adopt new models by reshaping their preferences. The normative appeal approach thus claims that the IFIs profoundly influence policy-makers—not from the outside, via carrots and sticks, but from the inside, by persuading them what they themselves should want.

Upon the account owner’s retirement, the amount of the accumulated funds and investment returns determined the value of each individual’s pension benefit. Thus, contrary to the intergenerational solidarity underlying the prereform systems, the Chilean model embodied purely individualistic principles: Every person would receive in old age what they had saved in the course of their own work life and what they had gained in the form of investment returns. While this new system made the value of the future benefit uncertain, it provided a clear incentive for people to contribute to their own pension funds.

Change has mostly been gradual, limited, and fragmented, affecting only specific aspects of this complicated issue area; a comprehensive restructuring like Colombia’s ambitious reform of 1993 has remained the exception (Nelson 1999). Contrary to the pension arena, no single, neat, compact model has emerged that has stimulated widespread emulation. Nevertheless, these disparate, not always cumulative reform efforts have followed two main tracks, which lead toward social equity and economic efficiency.

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Bounded Rationality and Policy Diffusion: Social Sector Reform in Latin America by Kurt Weyland

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