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Policy Innovation, Decentralised Experimentation, and Laboratory Federalism

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Abstract

Decentralised experimentation and mutual learning of public policies is seen as one of the important advantages of federal systems (Oates: laboratory federalism). Based upon Hayekian ideas of the advantages of decentralised experimentation (as a discovery procedure), we analyse the long-term benefits of parallel experimentation in a federal system from an evolutionary economics perspective. We present a simulation model in which the lower-level jurisdictions in a federal system experiment with randomly chosen policy innovations and can imitate the relatively best solutions. The simulations confirm our hypotheses that a higher degree of decentralisation has positive effects on the long-term accumulation of knowledge of suitable policy solutions and also limits risks through better protection against erroneous policies. Also problems of policy learning and trade offs with (static and dynamic) advantages of centralisation are taken into account.

Suggested Citation

  • Nicole J. Saam & Wolfgang Kerber, 2013. "Policy Innovation, Decentralised Experimentation, and Laboratory Federalism," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 16(1), pages 1-7.
  • Handle: RePEc:jas:jasssj:2012-63-2
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    File URL: http://jasss.soc.surrey.ac.uk/16/1/7/7.pdf
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    Citations

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    Cited by:

    1. Carsten Hefeker & Michael Neugart, 2017. "Non-cooperative and Cooperative Policy Reforms under Uncertainty and Spillovers," MAGKS Papers on Economics 201707, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. repec:eee:jcecon:v:46:y:2018:i:1:p:94-102 is not listed on IDEAS
    3. Ansell, Christopher K. & Bartenberger, Martin, 2016. "Varieties of experimentalism," Ecological Economics, Elsevier, vol. 130(C), pages 64-73.
    4. Josip Stepanic & Mirjana Pejic Bach & Josip Kasac, 2013. "Agent Based Model of Young Researchers in Higher Education Institutions," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 11(2), pages 209-216.
    5. Becker, Lasse & Bizer, Kilian, 2015. "Federalism and innovation support for small and medium-sized enterprises: Empirical evidence in Europe," Center for European, Governance and Economic Development Research Discussion Papers 245, University of Goettingen, Department of Economics.

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