The Sources of Policy Innovation: Sub-National Constraints on Negotiated Reform

This paper argues that the principal avenue of policy innovation in the areas of economic and social policy in the advanced industrial countries is a function of the sub-national capacity of interest organizations. In policy areas where these organizations exercise high deliberative capacity, they have access to private information which allows them to be the most likely authors of reforms which many of their members may oppose. They also enjoy a capacity to mobilize their members around policy proposals, using both grassroots organizational strength and considerations of legitimacy, to convince their members to support (or not to obstruct) the reform. In policy areas in which groups possess these organizational strengths, then, the groups themselves (rather than political parties or bureaucrats) will be the most likely source of policy innovation. Where groups lack this capacity, the political system rather than interest groups will be the most likely source of policy innovation. This argument is supported by evidence from recent episodes of pension reform in Italy and France and of vocational training finance reform in Germany and France.