“It is almost impossible to remove the effects of political institutions from [policy] success or failure” (Peters 2015, pp. 265)
This section explores the institutional literatures, then historical intuitionalism in more depth. These are used in developing and testing an analytical heuristic in paper 3 (chapter 7). The focus on
institutions acknowledges the fact that while policymaking processes and policy design are important, it is also important to consider the institutional setting in which policymaking processes take place.
6 The resource effects and interpretive effects give coalitions the incentives to mobilize
7 An acting coalition rarely has a blank slate allowing freedom to design a policy mix
Chapter 2. Theory and literature review – Data analysis Institutional literature and Historical Institutionalism
The general argument is that different institutional arrangements can affect the ability of policy mixes to produce feedback, and the impact that feedback mechanisms may have on the policy stability of the policy subsystem due to the institutional arrangements which make it up.
2.4.1. Overview institutional literature
"The beginning of wisdom in approaching institutional theory is to recognize that there is not one but several variants." Scott (1987: 493).
The examination of political institutions in structuring behaviour; and shaping incentives and normative values, dates back as far as Plato and Aristotle (Steinmo, 2008). Institutional literatures purport that behaviours are the product of ideas, values, and beliefs that originate in the institutional context (Meyer & Rowan, 1977; Meyer, Scott, & Deal, 1983; Zucker, 1983). Institutional theory therefore suggests that organisations must accommodate institutional expectations (D'Aunno, Sutton,
& Price, 1991; DiMaggio & Powell, 1991; Scott, 1987), and how organisational behaviours respond to institutional pressures (e.g., pressures from regulatory agencies, such as the state).
Institutionalist literature, at its core, raises the fundamental question ‘Do institutions matter?’ (Weaver
& Rockman, 1993). For the purpose of this thesis, and to understand the role of institutions in more detail, two further questions are of relevance: i) what do we mean by institutions?; and ii) how do institutions affect policymaking? In response to the first question, the most common definition for institutions is: rules (Steinmo, 2008). Some authors focus on formal rules and organizations (Streeck and Thelen 2005), while others address informal rules and norms (Marcussen 2000; Hall 1989).
Whether we mean formal institutions or informal rules and norms, they are important for politics because they shape who participates in a given decision and, simultaneously, their strategic behaviour.
The second question regards how institutions affect policymaking. Policy, in of itself, forms a component of institutions, as the formal arrangements that structure the activities of actors. Policy change in and of itself, the purposeful change to formal institutions (and sometimes informal institutions) by state actors, usually involves institutional change (Needham and Louw, 2006) and is overwhelmingly incremental (North, 1990). Policy change can therefore be considered as a form of institutional design (Alexander, 2005) and should be informed by an understanding of how
institutions and their constituent actors change and can be changed. Authors including McLeod (1997) and Payne (2013) have suggested that significant institutional change is likely to be the result of a sense of partnership and common enterprise between the state and market-based actors. Therefore, although institutions may be ‘sticky’ in nature, policy may achieve its intended aims if it
Chapter 2. Theory and literature review – Data analysis Institutional literature and Historical Institutionalism
acknowledges the presence of institutional pathways (Needham and Louw, 2006; Smith and Lewis, 2011). Therefore, a key question then to ask which is relevant for effective policy design is whether the policy failure is related to its own design or if the failure is a symptom of being embedded in a more systematic pattern of failure emerging from institutional arrangements (B. G. Peters, 2015).
2.4.2. Neo-institutionalist literature
This section will focus primarily on neo-institutionalist literature and briefly summarise and compare the main approaches within this discipline. Neo-institutionalist literatures are primarily concerned with how the interests of actors shape outcomes. While it is not the purpose of this thesis to discuss the relative merits of these different approached in detail, an important consideration when comparing and choosing which is most suited to the application here involves the model of the individual and how these disciplines bases its assumptions of people’s interests.
Of the three approaches the main distinction is that of structure vs. agency (B Guy Peters, 2012).
Functional approaches focus more on the interaction of individuals with institutions (Thelen, 1999).
Functional approaches are Rational Choice institutionalism, drawing on the work of North8 (1990) and (Williamson, 2000), and assumes that people are rational self-serving individuals, in a manner roughly synonymous to game theory. The main difference between this and the other functional approach, Sociological institutionalism (Scott, 1995), is in its assumption of the individual, which argues that individual choice is socially constructed. The third form of neo-institutionalism is Historical Institutionalism, considered as a structural approach (Thelen, 1999). This approach is agnostic in its model of the individual. Rather than ascribing a particular model of individual behaviour it assumes both rational choice and social constructivism are important. The approach is however, much more heavily orientated towards structure, and its comparatively downplayed attention to linking individuals to institutional change can be considered a weakness of the approach (B Guy Peters, 2012).
While institutions are a core concept in the transitions literature, the conceptualisation used has almost exclusively drawn on the work of Scott (1995). For example, transitions scholars have made use of institutional concepts like rules, culture or legitimacy in order to account for the embeddedness of actors or the persistence of systems (Geels and Verhees, 2011; Geels, 2004, 2010); and Geels and Schot (2007) point out that socio-technical systems are situated at the level of organizational fields.
8 Another institutional approach based up the work of Peter North is new institutional economics (for a review see Perry, 2019), but is considered here less useful for the study of politics and policymaking.
Chapter 2. Theory and literature review – Data analysis Institutional literature and Historical Institutionalism
In a recent review, Andrews-Speed (2016) suggests the potential value that drawing on the
institutional literatures could contribute to the transitions literature. Of these approaches HI is argued to be the most useful approach for understanding power distribution, which is most suited to
deepening our understanding of policymaking processes. This approach will be reviewed in more detail in the next section.
2.4.3. Historical institutionalism and transitions
The literature on historical institutionalism is concerned with how institutions re-enforce each other and reproduce similar outcomes, and the situations under which they may be susceptible to change.
This approach has recently been reviewed by authors in regard to their potential use in the context of transitions (Andrews-Speed, 2016; Lockwood, Kuzemko, et al., 2017). (Lockwood, Kuzemko, et al., 2017) propose criteria for helping explain energy transitions in terms of institutions. This sub-section focusses on four of these considerations, which are considered useful for the analysis of a single case study bounded at the national level. A summary of these is displayed in table 3.
Aggregation of values and interests through political systems
Primarily the institutional arrangements in a given context will shape which ideas and interests are given more precedence. A key consideration here is the role of partisan veto players, defined as
“individual or collective actors whose agreement is necessary for a change in the status quo”
(Tsebelis, 2002: 19). The role and influence of such veto players is affected by variations of political institutions, including the electoral system in a given setting. Lockwood et al., (2017) argue that countries with Proportional Representation (PR) electoral systems are more likely to adopt environmental policy measures than those with majoritarian systems, where majoritarian systems incentivise politicians to target the concerns of a relatively small group of swing voters in marginal constituencies, while PR incentivises parties to seek support from a broader spectrum of voters by providing public goods (Lizzeri and Persico, 2001). Second is that PR systems tend to result in centre-left governments which arguably are more proactive in pursuing transitions. Third is that PR systems accommodate smaller political parties, and are more likely to result in coalition government, which gives more influence to groups otherwise marginalised in majoritarian systems. Majoritarian systems instead provide more opportunities for NGOs as vehicles for change (Lockwood et al. 2017).
Another consideration is the role of ‘institutional veto players’, which relate to constitutional
agreements. Primarily, this is concerned with if the political system is presidential vs parliamentarian, and federalist vs. centralised. Fundamentally the argument is that where political power is
Chapter 2. Theory and literature review – Data analysis Institutional literature and Historical Institutionalism
concentrated within a government arrangement, it allows for greater influence of a small number of groups, and without the involvement of institutional veto players, can result in both inaction and inertia or conversely, allow for radical action resulting in either acceleration or reversal in the rate and direction of transition.
Credible commitment and political institutions
The credibility of political commitment in a given policy mix is related to the political and electoral system in a given context. Following from the arguments regarding the differences in political systems outlined above, these also affect the credibility of the political commitment and in turn the policy mix that results from the policymaking process. PR systems tend to give more credibility due to the number of different actors represented in government, meaning that generally once consensus is reached political commitment to a given policy mix tends to be more stable.
Delegation, regulatory inertia and regulatory activism.
Regulatory responsibilities may be delegated to a non-government agency. This may be because government lacks the technical expertise to implement and regulate policy, or may be in order to shield it from political contestation, provide more certainty, and reduce risk (Kuzemko, 2016;
Lockwood, Kuzemko, et al., 2017). This can lead to situations where the appointed regulator may favour approaches that are in their own interests, or align with the practices or norms currently followed. In such instances, inertia may occur if the regulator intentionally resists some policy initiatives and slows change in the direction of transition. This effect is amplified by the extent to which the regulator has influence/autonomy over regulatory (or even more broadly, policymaking) processes. Conversely, in some situations, the role of the regulator may be underplayed if they do not have statutory powers to instigate policy measures, rendering policymaking and regulatory processes more susceptible to political contestation and providing less stability(Lockwood, Kuzemko, et al., 2017).
Power and capture by incumbents
Commonly this phenomena is considered as regime resistance in transitions literature, but
mechanisms through which such incumbents can affect policymaking processes are often implicit or overlooked. Broadly speaking Lockwood et al. (2017) identifies the role of incumbents in such processes into three considerations: the power of incumbents, the interests of incumbents, and the openness of policy and regulatory processes to capture.
Chapter 2. Theory and literature review – Data analysis Institutional literature and Historical Institutionalism
Table 3 - Important institutional factors for sustainability transitions (adapted from Lockwood et al. 2017)
Institutional
- Electoral system – Proportional Representation (PR) vs. majoritarian - PR allows marginalised political powers to have more influence
- PR allows public opinion to influence politics more as politics appeals to a wider group of voters.
- In political systems concentrating power with few institutionalised veto players, both inaction and radical change are possible.
Credible commitment and
political institutions
- Lower credibility in majoritarian systems due to fewer veto players - Tendency for things to be re-politicised in times of crisis.
Delegation, regulatory inertia
and regulatory activism
- Delegation of regulatory decision-making.
- Used to reduce risk and shield from political interference, in potentially controversial areas.
- Strategy of creating new veto players, which can be used to increase credibility.
- Delegation could slow the rate of change if these actors have ideas that are inconsistent with transition.
Power and capture by incumbents
i)The power of incumbents
-How much leverage actors have over policymakers.
-Related to the level of centralisation/market share of the system.
ii)The interests of incumbents
-Ownership and corporate governance.
-Asset specificity
iii)The openness of policy and regulatory processes to capture
-Delegation of policy and regulatory decision making to private sector actors.
The power that incumbents have is related to their market share, the degree of
centralisation/oligopoly, and other factors such as ability to provide resources that government needs (Lockwood, Kuzemko, et al., 2017). The interests are typically assumed to be in opposition to transition, however this is not homogenous. One consideration is different forms/arrangements of corporate governance across different actors/groups will result in different outcomes, i.e. more cooperatively owned organisations may be more interested in pursuing transition. Also, asset
specificity, i.e. how well the proposed transition fits with existing infrastructure of incumbents – will influence the relative support or resistance from these actors. The final consideration is the
susceptibility of policy and regulatory processes to capture from such incumbents. Government may lack the technical expertise to design effective policy, which may be exacerbated in institutional arrangements like in the UK, where companies are not obligated to disclose data to government (Lockwood, Kuzemko, et al., 2017), or there are insufficient measurement or enforcement of regulations, making evidenced based decision making more difficult.
Chapter 2. Theory and literature review – Data analysis Institutional literature and Historical Institutionalism
Having introduced the theoretical basis of the thesis, and literature on which the thesis draws and builds upon, the next chapter introduces the empirical context the thesis.
Chapter 3. Empirical context: Low/zero carbon housing – Data analysis Context of the UK and the