1 Implementing Complex Policy Initiatives: Layering, Drift, Conversion and Policy Design as Alternative Outcomes of System Reform Efforts in Transition.

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Implementing Complex Policy Initiatives:Layering, Drift, Conversion and Policy Design as Alternative Outcomes of System Reform Efforts in Transition Management

Implementing Complex Policy Initiatives:Layering, Drift, Conversion and Policy Design as Alternative Outcomes of System Reform Efforts in Transition Management

Socio-Technical System Workshop PaperPotsdam, September 21, 2007

M. Howlett, Institute for Governance Research (IGS)

Department of Political ScienceSimon Fraser University

Burnaby BC, Canada V5A [email protected]

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Overall Objectives

• Overview: Workshop and Paper Aims

– Workshop Proposal: “Is it politically possible to induce and shape sustainable socio-technical transitions, and, if so, how? (and) What kind of governance seems most appropriate for the innovation of sustainable production-consumption decisions? (and) How could adequate forms of governance be developed and introduced? (p.1)”

– This paper addresses several definitional and other conceptual questions related to transition management such as: how do policy studies typically understand socio-economic transformations and the role played in them by governments? What is involved in transition management from a governance perspective? And what can policy studies contribute to the understanding of these phenomena?

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Four Key Questions in the Analysis of Socio-Technical Transition Management from a Policy Perspective

• 1. What is a socio-technical system and how have policy studies dealt with them in the past?

• 2. How difficult is it to change socio-technical systems through government action?

• 3. What are the governance arrangements and policy tools available for transition management?

• 4. What are the likely outcomes of transition management activities utilizing these policy tools and governance strategies?

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Question #1 - What is a socio-technical system and how have policy studies dealt with them in the past?

• Socio-technical systems are large-scale arrangements of actors, institutions, ideas and practices that govern how human societies generate wealth and re-produce themselves:

– created out of traditional means and relations of production which are altered by various forms of production-related innovations

– useful to look at such processes as a system or network

• broader than just technological invention and is dependent on a host of socio-economic factors– the nature and operation of relevant institutions that pursue

innovation – the economic and social incentives that encourage or discourage

innovation– the capacity for diffusion of knowledge and innovation

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• Faults in socio-technical systems – such as weak incentives for innovation, social and economic instability, bad infrastructure and inadequate human capital - can reduce the capacity of the system to develop and apply knowledge innovatively.

• This holds out the promise that policies can also guide innovation and socio-technical system orientations and components towards new ends, such as “sustainability” by fostering changes in innovation system behaviour (such as new ‘green’ research or technical targets).

– Transition management is based on the notion that governments should be able to ‘steer’, ‘plan’ or ‘guide’ the direction of socio-technical transformation by varying or manipulating system parameters through the astute use of policy tools.

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• Contribution of Policy Studies

• Socio-technical systems seen as existing at the outermost layer of a funnel of causality; a model of policy determinants popularized in the 1970s in which a set of independent variables affecting policy outcomes exist within a `nested' relationship (Hofferbert 1974).

– Socio-technical systems seen as the ‘largest’ or most indirect background condition or independent variable affecting government policy-making, and not as a dependent variable affected by policy activity.

• Socio-technical conditions thus viewed as worthy of some attention but not detailed treatment, because in most cases they can be considered ‘a given’ or ‘constant’, only creating a constraint and opportunity structure for more proximate variables such as political ideas and power and decision-making behaviour.

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• Socio-Technical Systems can also be seen as a dependent variable

– Indirect and Direct Effects of Policy on Socio-technical systems

• (1) Indirect effects are diffused through other intervening variables, (leading to suggestions for ‘niche management’ strategies for socio-technical system transformation); and

• (2) More direct transition management efforts aimed specifically at large-scale, system-wide, change and targeted at specific aspects of the structure and operation of an existing socio-technical system.

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Question # 2 - How difficult is it to change socio-technical systems through government action?

• Socio-technical systems are self-reinforcing and have difficult-to-alter trajectories

• Trajectories are ‘path dependent’ in the sense that initial decisions affect later ones and hence later outcomes so that the sequencing of events is critical and innovations, for good or bad, once in place are difficult to change (Pierson 2000; Greener 2002; Howlett and Rayner 2006).

• Change can be thought of as linear/evolutionary and only subject to indirect government action or as tending to occurs in an irregular, non-linear or ‘punctuated equilibrium’ fashion and subject to direct government policy activity (Berkhout, 2002).

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• With direct action, governments must carefully calibrate their actions against their assessment of the ‘stage’ at which a trajectory may be.

– The role of government is different in each phase of the transition process. In the preparation phase it must play the catalyst and director… in the take-off phase, other actors must be mobilized in the direction of the transition objective. Here and in the acceleration phase, the government has to stimulate learning processes about possible solutions…In the stabilization phase the guidance is mainly oriented towards embedding, to prevent or contain backlashes and other negative effects: so a role as controller and consolidator (Rotman, Kemp and van Asselt (2001) p. 26)

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• There are four principles types of transformation (Smith, Stirling and Berkhout (2005):

– ‘endogenous renewal” - existing regime members make conscious efforts to adapt based on a common perception of external threats to existing systems;

– “re-orientation of trajectories” - clearly defined internal or external shocks lead to unco-ordinated responses;

– ‘emergent transformation” - poorly understood external processes promote long-term change and responses are unco-ordinated and poorly informed; and

– “purposive transitions” - governments and key actors develop and push forward new technologies and related changes in existing socio-technical systems in the absence of common perceptions of threats or opportunities arising from new developments and innovations (pp. 1500-1502).

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• The careful planning and calibration of government activities requires a great deal of capacity and expertise on the part of a government, which it may not have in great supply.

– Governments must have a reasonably high level of policy analytical capacity in order to perform its tasks in the proper order and sequence and develop medium and long-term projections, proposals for, and evaluations of, future government activities and not simply react to short-term political, economic or ecological challenges and imperatives occurring in their policy environments (Fellegi 1996, Singleton 2001, Anderson 1996, Bakvis 2000).

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Question #3 - What are the governance arrangements and policy tools available for transition management?

• In its broadest sense, “governance” is a term used to describe the mode of government coordination exercised by state actors in their effort to solve familiar problems of collective action inherent to government and governing.

• ‘Governance’ is thus all about establishing, promoting and supporting a specific type of relationship between governmental and non-governmental actors in the governing process.

• Several common types of governance strategies or arrangements exist (Considine)

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•

Mode of Governance

Central Focus of Governance Activity

Form of State Control ofGovernance Relationships

Overall Governance Aim

Prime Service Delivery Mechanism

KeyProcedural Tool for Policy Implementation

Legal Governance

Legality - Promotion of law and order in social relationships

Legislation, Law and Rules

Legitimacy - Voluntary Compliance

Rights - Property, Civil, Human

Courts and Litigation

CorporateGovernance

Management - of Major Organized Social Actors

Plans Controlled and Balanced Rates of Socio-economic Development

Targets - Operational Objectives

Specialized and Privileged Advisory Committees

Market Governance

Competition - Promotion of Small and Medium sized Enterprises

Contracts and Regulations

Resource/Cost Efficiency and Control

Prices - Controlling for Externalities, Supply and Demand

Regulatory Boards, Tribunals and Commissions

Network Governance

Relationships- Promotion of Inter-actor organizational Activity

Collaboration Co-Optation of Dissent and Self-Organization of Social Actors

Networks of Governmental, and Non-Governmental Organizations

Subsides and Expenditures on Network Brokerage Activities

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• The types of governance strategies most suited to ‘direct’ socio-technical transformation are ‘corporate’ and ‘market’ since co-operation of affected parties is required for such action.

• Transition managers can affect governance goal-setting through the use of ‘procedural’ policy tools – such as provision of information to, the extension of funding to, and the appointment to advisory boards and commissions of members of interest groups and organizations supportive of sustainability, or the re-organization of government agencies and departments to emphasize particular sustainability goals or orientations

Principal Governing Resource Used

General Purpose of Instrument Use

Nodality Authority Treasure Organization

Procedural

Information provision/ withdrawal

Treaties Advisory committees/ commissions

Interest group funding/ creation

Conference Commissions of Inquiry Government Re-organizations

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• Other tools are also needed. Means-oriented policy components (“instruments”, “mechanisms” and “calibrations”), affect the implementation of governance goals, objectives and settings “on-the-ground” and are accomplished through the use of traditional ‘substantive tools’ which focus on the manner in which goods and services are produced and distributed in society.

Principal Governing Resource Used

General Purpose of Instrument Use

Nodality Authority Treasure Organization

Substantive

Advice Training Reporting Registration

Regulation Self-Regulation Licences Census-taking

Grants User Charges Loans Tax Credits Polling

Administration Public Enterprises Policing Consultants Record-Keeping

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• Ultimately a policy arrangement or mix is composed of many parts that must be integrated (I.e. co-ordinated and coherent)

Policy Content

High Level Abstraction Programme Level Operationalization

Specific On-the-Ground Measures

PolicyEnds or Aims

GOALS What General Types of Ideas Govern PolicyDevelopment?

(e.g. environmental protection, economic development)

OBJECTIVESWhat Does Policy Formally Aim to Address?

(e.g. saving wilderness or species habitat, increasing harvesting levels to create processing jobs)

SETTINGSWhat are the SpecificOn-the-ground Requirements of Policy(e.g. considerations about the optimal size of designated stream-bed riparian zones, or sustainable levels of harvesting)

Policy Focus

Policy Means or Tools

INSTRUMENT LOGICWhat General Norms Guide Implementation Preferences?(e.g. preferences for the use of coercive instruments, or moral suasion)

MECHANISMSWhat Specific Types ofInstruments are Utilized?(e.g. the use of different tools such as tax incentives, or public enterprises)

CALIBRATIONSWhat are the Specific Ways in Which the Instrument is used?(e.g. designations of higher levels of subsidies, the use of mandatory vs voluntary regulatory guidelines or standards)

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QUESTION #4 - What are the Likely Outcomes of Transition Management Utilizing these Policy Tools and Governance Strategies?

• Four common Outcomes of Efforts to Integrate Governance Arrangements

– Layering is a process whereby new goals and instruments are simply added to and existing regime without abandoning previous ones, typically leading to both incoherence amongst the goals and inconsistency with respect to instruments used.

– Drift occurs when the goals of the policy change without changing the instruments used to implement them, which then can become inconsistent with the new goals and most likely ineffective in achieving them (Tornvlied and Akkerman 2004).

– Conversion involves changes in instrument mixes while holding goals constant. If the goals are inconsistent, then changes in policy tools may reduce levels of implementation conflicts or enhance them, but are unlikely to succeed in matching means and ends of policy.

– Design occurs when there is a conscious effort made to create or fundamentally re-structure policies so that they are consistent and coherent in terms of their goals and means orientations (Eliadis, Hill and Howlett 2004; Gunningham and Sinclair 1999).

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• The existing evidence shows that many existing policy regimes or mixes have developed haphazardly through processes of policy layering, or repeated bouts of policy conversion or policy drift, in which new tools and objectives have been piled on top of older ones, creating a palimpsest-like mixture of inconsistent and incoherent policy elements.

• Recognizing the drawbacks of layering, conversion and drift, policy makers and critics have increasingly turning to the promotion of complex policy mixes that have been designed, rather than incrementally developed (Meijers 2004; Briassoulis 2005; Meijers and Stead 2004).

• The explicit goal of these new designs is optimization and the avoidance of contradictory or conflicting mixes of policy tools (Gunningham et al 1998, Gunningham and Sinclair 1999).

Regime Instruments Consistent Inconsistent

Coherent Design Conversion Regime Goals Incoherent Drift Layering

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• Notions of ‘smart’ or ‘optimal’ policy design (Gunningham, Grabosky and Sinclair 1998; Gunningham and Sinclair 1999; Eliadis, Hill and Howlett 2005) emphasize:

– 1. The importance of designing policies that employ a mix of policy instruments carefully chosen to create positive interactions with each other.

– 2. The importance of considering the full range of policy instruments when designing the mix.

– 3.The increased use of “alternative” tools such as, various forms of self-regulation by industry, and policies that can employ commercial and non-commercial third parties to achieve compliance, such as suppliers, customers and a growing cast of auditors and certifiers.

– 4. Finally, the importance of the search for new network-appropriate procedural policy instruments, and various techniques of network management (Howlett and Rayner 2004).

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• There is no guarantee, however, that an optimal policy mix will result from a (re)design effort - such as transition management. This would only occur if a government had enough capacity to be able to adopt a governance strategy and set of policy tools likely to lead to a sustainable socio-technical transition and avoid the pitfalls of policy layering while so doing.

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Conclusions

• Q1. What is a socio-technical system and how have policy studies dealt with them in the past?

– A1. Socio-technical systems are large-scale arrangements of actors, institutions, ideas and practices that govern how human societies generate wealth and re-produce themselves (Dosi et al, 1988). They are created out of traditional means and relations of production which are altered by various forms of production-related innovations. These systems have been seen as both the subject and object of policy activity, serving as a multiply-mediated ‘objective’ constraint on policy activity and as a subject both of an indirect and difficult-to-control process of government influence filtered through many intervening steps and variables, and also as a candidate for more direct government manipulation.

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Conclusions

• Q2. How difficult is it to change socio-technical systems through government action?

– A2. Socio-technical systems are path dependent and very difficult to change through government action (transition management). The need to carefully calibrate government actions with the degree to which a trajectory is institutionalized and with the attitude and behaviour of other actors to the planned transformation, in the context of whether or not changes are clearly recognized and/or ‘self-propelled’, raises the issue of the policy analytical capacity of the ‘transforming’ government to plan and operate the specific types of policy tools it has at its disposal to implement change. The careful planning and calibration of government activities requires a great deal of capacity and expertise on the part of a government, which it may not have in great supply.

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Conclusions

• Q3. What are the governance arrangements and policy tools available for transition management?

– A3. Transition management involves the use of multiple tools in policy instrument mixes established to operationalize a particular mode of governance or governance strategy. There is a set of eight basic types of instruments from which any policy mix is constructed; setting out the range of options which transition managers have at their disposal in attempting to design or alter an existing socio-technical paradigm. However, these tools are embedded in governance strategies and the types of strategies best suited to ‘purposive transitions’ in socio-technical systems are market and corporatist ones.

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Conclusions

• Q4. What are the likely outcomes of transition management utilizing these policy tools and Governance Strategies?

– A4. Overall, this analysis suggests that the likely result of government transition management efforts is a less than perfectly co-ordinated response to short-term challenges, rather than a long-term effort at optimal planning (Lee and Yoo, 2007). In such a context, the most likely outcome of transition management efforts is policy layering or policy drift/conversion, as events and occurrence overtake sustainability strategies and lead to a disjuncture between policy goals and means. Only when planning occurs in high capacity governments, is it likely to result in effective integrated design.

1 Implementing Complex Policy Initiatives: Layering, Drift, Conversion and Policy Design as Alternative Outcomes of System Reform Efforts in Transition.

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