Towards a theory of policy bubbles

Earlier conceptual studies suggest that policy bubbles differ from the more common pattern of policy overreaction due to their sustained, self-reinforcing nature, which results in prolonged overinvestment. Although the best way to analyze this phenomenon is through rigorous empirical investigation, such future endeavors require a guiding theory. This article lays the groundwork for a potential theory of policy bubbles by differentiating between micro-level causes, such as cognitive, emotional, and social network factors influencing individual behavior (e.g., whether a person’s friends are connected to one another), and macro-level causes, including institutional and ideational factors, as well as social network dynamics at the aggregate level, such as links density or segregation patterns. A similar distinction is made here between micro- and macro-level positive feedback processes, which may evolve independently, interact with one another, and exhaust themselves during the emergence of policy bubbles and in the lock-in stage. This stage is conceived here as a prolonged conflict between policy entrepreneurs who advance distorted or accurate policy images. This conflict at times involves the use of sheer power in authoritarian regimes, while in democratic ones it often entails strategic action by policy entrepreneurs via mutual reinforcement between policy overproduction and various forms of capture—constitutional, technological, cultural, and informational. These mechanisms are used by policy entrepreneurs to block bureaucratic drift, coalition drift, and drift of accountability forums that may lead to a decline in policy overproduction. If this theory results in conclusions that offer sufficient generalizations, it may have a place alongside the major theories of the policy process.