Author: Jason
According to Munger (2000), mainstream policy analysis is dominated by the welfare economics approach, which paradoxically claims value-neutral, objectivity while presuming market efficiency as the starting point of analysis. Munger also underscores how this efficiency approach does not reflect the real world as markets can be unpredictable, incoherent, unstable, and may encourage anti-social and exploitative behavior. Nevertheless, he concludes that alternative non-market based approaches to policy analysis are not politically feasible as long as the market system remains the central organizing principle of economies across the globe. Following this conclusion, it can be argued that climate change - which Porter notes has been driven by the reliance on fossil fuels for economic growth since the Industrial Revolution - cannot be reversed until real challenges and alternatives to the efficiency paradigm and dominant mode of production enter into the community of ideas.
In her thought-provoking lead précis, Porter underlines how the notion of path dependency can help explain how policymakers have failed to combat global climate change, yet she also states that it does not adequately describe when and how to intervene in order to reverse the path-dependent policies that have led to the destructive levels of carbon dioxide in the earth's atmosphere. Responding to her call for further discussion on how path dependence and positive feedback theory can be used by policymakers to manage the effects of climate change, I maintain that Pierson's (2000) version of path dependency does indeed have little value as a predictive tool.
Since the early 1990s, the related concepts of policy feedback and path dependency became prominent in public policy studies (Jacobs & Weaver, 2013). The idea of path dependence has been used across a variety of social science disciplines, including economics, political science, and sociology. As discussed by Porter, Pierson suggests that path dependency’s most important feature is increasing returns or positive feedback, which explains why a particular path is taken and “locked in.” Pierson’s main hypothesis is that since political life involves (1) collective action; (2) a high density of institutions; (3) political authority and asymmetries of power; and (4) complexity/opacity, it is likely to produce increasing returns to key players, leading to path dependency (Howlett & Session, 2009). Path dependency appears to be very similar to punctuated equilibrium theory because it also holds that periods of prolonged stability are separated by intense episodes of change. However, whereas punctuated equilibrium may help us better understand how rapid change comes about, Pierson's version of path dependency seems better suited to explain incremental policy change and institutional stability/continuity rather than how major structural change unfolds.
The limited predictive power of Pierson's version of path dependency is nicely illustrated through the Polya urn model whereby a large urn initially contains two balls - one black and one red - and one of those balls is removed at random and then returned along with another ball of the same color. This process is then repeated until the urn is entirely full. Ultimately, the Polya urn exercise demonstrates that it is impossible to predict the final number of black and red balls, and that the earlier rounds have a greater impact on the final composition of the balls in the urn than do the later rounds. Accordingly, this analogy for increasing returns reveals that small random events that occur earlier on have a larger impact on subsequent events, but since the earlier events are random, the final outcomes cannot be reliably predicted. Therefore, it can be said that one of the features that generates increasing returns in Pierson's path dependency theory – the complexity and opacity of political environments – also makes it nearly impossible to predict major institutional change or punctuated junctures over time (Malpass, 2011).
Pierson's path dependency model also has several other weaknesses, including but not limited to the following. First, it neglects negative effects and the fact that the majority of policies eventually fail. In other words, "the longer a policy is in operation the more time there is for its deficiencies to become obvious and for demands for change to accumulate and gather strength" (Malpass, 2011). Second, Pierson assumes that positive feedback enhances power asymmetries over time, but his model does not consider that stability could be disrupted should those in power pursue major change (Howlett & Session). Finally, the model does not consider that learning can come from exogenous sources such as new and attractive ideas from other subsystems that have the potential to undermine existing structures (Kay, 2005).
The concept of path dependency has also gained prominence in the economic geography literature. Krugman (1991) notably concluded, "if there is one single area of economics in which path dependence is unmistakable, it is in economic geography-the location of production in space." Nonetheless, after a review of the critiques of path dependency across multiple disciplines (such as those mentioned above), Martin (2010) pleads for a rethinking of path dependence in economic geography. Essentially, Martin contends that the core concept of “lock-in” is too narrow because it is tied to the "problematic underpinnings of equilibrist thinking," which stresses continuity over change as opposed to change over continuity. I believe that Martin's effort to re-conceptualize path dependency along with other many other contributions from economic geography – such as the critique of the Varieties of Capitalism approach and the argument to view modern capitalism in the singular, yet also as a "dynamic polymorphic process whose development is uneven and variegated" across political economies (Dixon, 2010) – show great promise for the development of new, multi-disciplinary ideas that could help transform our current destructive and obsolete paradigms of economic growth and policymaking.
External Sources
Dixon, A. D. (2011). Variegated capitalism and the geography of finance: towards a common agenda. Progress in Human Geography, 35(2), 193-210.
Krugman, P. (1991). History and Industry Location: The Case of
the Manufacturing Belt. American Economic Review. 81 (May):
80-3.
Howlett, M., & Session, P. (2009, May). Path Dependency and Punctuated Equilibrium as Generational Models of Policy Change: Evaluating Alternatives to the Homeostatic Orthodoxy in Policy Dynamics. In Bi-Annual Meeting of the International Political Science Association.
Jacobs, M. A., & Weaver, R. K. (2013). Negative Feedback, Policy Coalition, and Policy Change. Unpublished Working Paper. Retrieved from http://www.politics.ubc.ca/fileadmin/user_upload/webhome/users/364/Negative_feedback_Jacobs-Weaver_version_27_clean_identified.pdf.
Malpass, P. (2011). Path dependence and the measurement of change in housing policy. Housing, Theory and Society, 28(4), 305-319.
Martin, R. (2010). Roepke lecture in economic geography—rethinking regional path dependence: beyond lock-in to evolution. Economic geography, 86(1), 1-27.
According to Munger (2000), mainstream policy analysis is dominated by the welfare economics approach, which paradoxically claims value-neutral, objectivity while presuming market efficiency as the starting point of analysis. Munger also underscores how this efficiency approach does not reflect the real world as markets can be unpredictable, incoherent, unstable, and may encourage anti-social and exploitative behavior. Nevertheless, he concludes that alternative non-market based approaches to policy analysis are not politically feasible as long as the market system remains the central organizing principle of economies across the globe. Following this conclusion, it can be argued that climate change - which Porter notes has been driven by the reliance on fossil fuels for economic growth since the Industrial Revolution - cannot be reversed until real challenges and alternatives to the efficiency paradigm and dominant mode of production enter into the community of ideas.
In her thought-provoking lead précis, Porter underlines how the notion of path dependency can help explain how policymakers have failed to combat global climate change, yet she also states that it does not adequately describe when and how to intervene in order to reverse the path-dependent policies that have led to the destructive levels of carbon dioxide in the earth's atmosphere. Responding to her call for further discussion on how path dependence and positive feedback theory can be used by policymakers to manage the effects of climate change, I maintain that Pierson's (2000) version of path dependency does indeed have little value as a predictive tool.
Since the early 1990s, the related concepts of policy feedback and path dependency became prominent in public policy studies (Jacobs & Weaver, 2013). The idea of path dependence has been used across a variety of social science disciplines, including economics, political science, and sociology. As discussed by Porter, Pierson suggests that path dependency’s most important feature is increasing returns or positive feedback, which explains why a particular path is taken and “locked in.” Pierson’s main hypothesis is that since political life involves (1) collective action; (2) a high density of institutions; (3) political authority and asymmetries of power; and (4) complexity/opacity, it is likely to produce increasing returns to key players, leading to path dependency (Howlett & Session, 2009). Path dependency appears to be very similar to punctuated equilibrium theory because it also holds that periods of prolonged stability are separated by intense episodes of change. However, whereas punctuated equilibrium may help us better understand how rapid change comes about, Pierson's version of path dependency seems better suited to explain incremental policy change and institutional stability/continuity rather than how major structural change unfolds.
The limited predictive power of Pierson's version of path dependency is nicely illustrated through the Polya urn model whereby a large urn initially contains two balls - one black and one red - and one of those balls is removed at random and then returned along with another ball of the same color. This process is then repeated until the urn is entirely full. Ultimately, the Polya urn exercise demonstrates that it is impossible to predict the final number of black and red balls, and that the earlier rounds have a greater impact on the final composition of the balls in the urn than do the later rounds. Accordingly, this analogy for increasing returns reveals that small random events that occur earlier on have a larger impact on subsequent events, but since the earlier events are random, the final outcomes cannot be reliably predicted. Therefore, it can be said that one of the features that generates increasing returns in Pierson's path dependency theory – the complexity and opacity of political environments – also makes it nearly impossible to predict major institutional change or punctuated junctures over time (Malpass, 2011).
Pierson's path dependency model also has several other weaknesses, including but not limited to the following. First, it neglects negative effects and the fact that the majority of policies eventually fail. In other words, "the longer a policy is in operation the more time there is for its deficiencies to become obvious and for demands for change to accumulate and gather strength" (Malpass, 2011). Second, Pierson assumes that positive feedback enhances power asymmetries over time, but his model does not consider that stability could be disrupted should those in power pursue major change (Howlett & Session). Finally, the model does not consider that learning can come from exogenous sources such as new and attractive ideas from other subsystems that have the potential to undermine existing structures (Kay, 2005).
The concept of path dependency has also gained prominence in the economic geography literature. Krugman (1991) notably concluded, "if there is one single area of economics in which path dependence is unmistakable, it is in economic geography-the location of production in space." Nonetheless, after a review of the critiques of path dependency across multiple disciplines (such as those mentioned above), Martin (2010) pleads for a rethinking of path dependence in economic geography. Essentially, Martin contends that the core concept of “lock-in” is too narrow because it is tied to the "problematic underpinnings of equilibrist thinking," which stresses continuity over change as opposed to change over continuity. I believe that Martin's effort to re-conceptualize path dependency along with other many other contributions from economic geography – such as the critique of the Varieties of Capitalism approach and the argument to view modern capitalism in the singular, yet also as a "dynamic polymorphic process whose development is uneven and variegated" across political economies (Dixon, 2010) – show great promise for the development of new, multi-disciplinary ideas that could help transform our current destructive and obsolete paradigms of economic growth and policymaking.
External Sources
Dixon, A. D. (2011). Variegated capitalism and the geography of finance: towards a common agenda. Progress in Human Geography, 35(2), 193-210.
Krugman, P. (1991). History and Industry Location: The Case of
the Manufacturing Belt. American Economic Review. 81 (May):
80-3.
Howlett, M., & Session, P. (2009, May). Path Dependency and Punctuated Equilibrium as Generational Models of Policy Change: Evaluating Alternatives to the Homeostatic Orthodoxy in Policy Dynamics. In Bi-Annual Meeting of the International Political Science Association.
Jacobs, M. A., & Weaver, R. K. (2013). Negative Feedback, Policy Coalition, and Policy Change. Unpublished Working Paper. Retrieved from http://www.politics.ubc.ca/fileadmin/user_upload/webhome/users/364/Negative_feedback_Jacobs-Weaver_version_27_clean_identified.pdf.
Malpass, P. (2011). Path dependence and the measurement of change in housing policy. Housing, Theory and Society, 28(4), 305-319.
Martin, R. (2010). Roepke lecture in economic geography—rethinking regional path dependence: beyond lock-in to evolution. Economic geography, 86(1), 1-27.