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The Diffusion of Policy Innovations. An Experimental Investigation

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  • Jean-Robert Tyran

    ()

  • Rupert Sausgruber

    ()

Abstract

What causes a government to adopt a new program or policy? Despite a large number of empirical studies available to date, the relative importance of various determinants remains obscure because of difficulties of statistical identification. We present an experimental setting to study the diffusion of policy innovations in the laboratory. Our approach discriminates between experimentation, experience, and emulation as determinants of policy adoption. The policy innovation we study is an internalization tax to mitigate a local market externality. Our results demonstrate the importance of information about innovations in other states in the diffusion of policy innovations.

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Bibliographic Info

Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2003 with number 2003-14.

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Length: 26 pages
Date of creation: May 2003
Date of revision:
Handle: RePEc:usg:dp2003:2003-14

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Keywords: Policy emulation; policy experimentation; innovation;

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  1. Timothy Besley & Anne Case, 1992. "Incumbent Behavior: Vote Seeking, Tax Setting and Yardstick Competition," NBER Working Papers 4041, National Bureau of Economic Research, Inc.
  2. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December.
  3. Harrison, Glenn W, et al, 1987. "Coasian Solutions to the Externality Problem in Experimental Marke ts," Economic Journal, Royal Economic Society, vol. 97(386), pages 388-402, June.
  4. Heyndels, Bruno & Vuchelen, Jef, 1998. "Tax Mimicking Among Belgian Municipalities," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 89-101, March.
  5. Kollman, Ken & Miller, John H & Page, Scott E, 1997. "Political Institutions and Sorting in a Tiebout Model," American Economic Review, American Economic Association, vol. 87(5), pages 977-92, December.
  6. Kollman, Ken & Miller, John H & Page, Scott E, 2000. "Decentralization and the Search for Policy Solutions," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 102-28, April.
  7. Feld, Lars P., 1997. "Exit, voice and income taxes: The loyalty of voters," European Journal of Political Economy, Elsevier, vol. 13(3), pages 455-478, September.
  8. Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
  9. Smith, Vernon L, et al, 1982. "Competitive Market Institutions: Double Auctions vs. Sealed Bid-Offer Auctions," American Economic Review, American Economic Association, vol. 72(1), pages 58-77, March.
  10. Plott, Charles R, 1983. "Externalities and Corrective Policies in Experimental Markets," Economic Journal, Royal Economic Society, vol. 93(369), pages 106-27, March.
  11. Strumpf, Koleman S, 2002. " Does Government Decentralization Increase Policy Innovation?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(2), pages 207-41.
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Cited by:
  1. Tiezzi, Silvia & Xiao, Erte, 2013. "Time Delay and Support for Taxation," MPRA Paper 51233, University Library of Munich, Germany.

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