Episode 1: The Structure of Policy Change with Derek Epp

Hello and welcome to the inaugural episode of the Policy Agendas podcast, a podcast

by the Policy Agendas Project, which has a lot of peas and a lot of alliteration. My name is E.J. Fagan

and the project manager of the Policy Agendas Project. Today, I am joined by Katy Middle Middle

matto. I’m sorry. Okay. I’m sorry. I’m terrible. Pronouncing names as Katy, another graduate student here. Introduce

yourself. My name’s Katie Matal. I study public policy specifically. I’m interested in political

communication, education policy and gender politics. Yeah. And so we’re gonna have a bit of a revolving

cast here on this podcast. Mostly graduate students from the project, but also faculty members here at University, Texas

at Austin. The goal is to interview political scientists doing

new work in the realm of public policy and defining public policy broadly. We want to

talk about the discipline. We want to talk about the work. We want to talk about it, the implications of the work, et cetera.

Being at the policy Dennis project, we’re always very interested in data here, which will what we’ll talk about, we’ll do that. We’ll

be mixing together people who are with the University of Texas, of people who can come in here and talk

with us in studio and also their political scientists from around the country for this first episode.

Katie. Q Tell us what is on the agenda. We’ll be talking to Dr. Derek EPP, who is an

assistant professor here at the University of Texas on his 2018 book,

The Structure of Policy Change. So what’s what’s this book about? It’s got a big title, but that title can mean a lot of

things. Derek focuses on the differences between collective decision making and deliberative

decision making. It’s a fascinating book. It’s almost like. It’s like a psychology book. In addition to be a public policy

punctuated equilibrium book. Yeah. He uses a lot of budget data to

look at how these decisions are made. Yeah. It’s really great. I’m excited to play the episode and that’s

going to follow this. But first, we just I have a couple of quick announcements. So this is our first episode. We’re

really excited to hear what you think about this episode. If you’ve any feedback, there’s eight people you think we should be interviewing, if there’s questions

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Please share it with your colleagues and friends. We really think this podcast has potential. We think that the discipline

has a hole for people discussing new work and we think it’s a lot of fun and so we’re really excited to share it with you.

And with that note, next up is our interview with Professor Derek EPP on the structure of policy

change. We are now joined by Derek App, Derek is a assistant professor of

government here at the University of Texas at Austin. He is author of the book. We are going to discuss today the structure

of Policy Change. Derek, welcome to the podcast. Thanks so much. It’s wonderful to be here. Katie

and E.J., I really appreciate being the first guest on your very exciting podcast. Thank

you. Thank you. Derek is also heavily involved in the Party Agendas Project here at U.T. And sadly, he’s

a familiar face, is the perfect person to get this started. And we’re going to start talking about the structure of

policy change. So, Derek, I’d like you to be a first for the listeners who haven’t haven’t read

this maybe or or or you know, that to pick it up. Can you summarize this book? What what what

is the argument you make in the structure of policy change? Salud. So this is a book that

is first of all, I had to write a dissertation when I was a graduate student at USC. And so this is the

final culmination of that dissertation project. But the book looks at how governments

process information and what the consequences are for how policies

change over time. And so pretty much from the from the get-go studying the genocide in

studying policy process, people been interested in how do policies change over time. And there’s been a lot

of developments in that area. So if you talk about famous studies, for example, you Schnyder

conflict expansion, the three streams approach by Kingdon, you have garbage can model.

And one of the important innovations in this field study is, is what has been known as the punctuated

equilibrium theory. And this was actually developed by one of our professors here at U.T., Brian Jones,

along with his colleague, Frank Baumgardner, who is who is at u._n._c. And they borrow the name

punctuated equilibrium from biology. And it’s this is the idea that change

can go through long periods of what is temporary equilibrium and then you’ll

have brief periods of very dramatic change. And so

what they observed is that policies when we looked at policies, whether we focus on a particular

policy area like nuclear energy, like pesticides, like NASA, whatever

the area was, or if we aggregated outwards and we looked at the entire federal government’s

budget, we would find what would they turn this punctuated equilibrium pattern, which is

to say a lot of Stacie’s, a lot of very low level changes and then a few really

dramatic overhauls where the government appears to dramatically rethink the way it’s going

to approach an issue. And so the question that they were interested in is why

do we observe this? And this is actually something that scholars of the policy process have

been struggling with for a long time. We had theories that the good job of explaining the punctuations

and that would be things like the policy windows again. Kingdon, we had theories that did a good job

of explaining the incrementalism and that would be like without Askey and his theory of incrementalism

punctuated equilibrium is the first to put them together in a really nice way. And what Jones and Baumgardner

told us is that it comes down to basically frictions or roadblocks that

act on the policy process. And they identified institutional roadblocks and also

cognitive ones. And these are simply things that disrupt how governments are going to process

information. So rather than sort of continuously and proportionally

updating to new information that happens in the world, governments become stuck on a

certain idea or certain dimension of a problem. They really overinvest in

that dimension. And then as time passes and the policy solutions to settle

on become further out of step with the world, when they do get around to

revising that policy, the changes can be really dramatic. So that’s sort of the jumping off point

for that before the book gets involved in. What I was curious in is what are some particular mechanisms within

government that affect how how institutions and policymakers can process

information? And what we would expect is some types of institutions allow for more

proportional processing of information and others it’s going to be more intermittent. And

so the words that is typically used in conjunction with this theory is disproportionate information processing.

And in the book, I decide that it really comes down to three different things. There’s that there’s the capacity

of governments to process information. And this is things like how much research capacity

there’s a government have, how professional is the legislature, how much support staff do

policymakers have, what is their ability to really engage with information and try to find solutions to

problems? And so all of that is capacity. And then I look at complexity. Some issues

are simply more complex than others. Shark attacks are very complex. We don’t know how to predict

when a shark is going to bite somebody. So that’s a complex issue if you’re going to try and solve that.

On the other hand, something like old age is is conceptually very simple. We know how old the population

is. We know how old it’s gonna be tomorrow. And so that would be you know, that’s complexity. Complex

issues. Simple issues. And then the third area that I focus on. And this

to me, I think is perhaps one of the more innovative areas of the book is to look at what I term

collective decision making. And so I draw a distinction between deliberative processes.

And these are what most of us are familiar with. So if you’re a member of a group and you have to figure out

how are we going to allocate our time or resources, you would engage in a deliberative process. And in fact,

most of the policymaking that we see is is done through this deliberative process where people

meet in a room. They debate. Maybe they vote. All of that I term deliberation.

And I draw a contrast with what could be discerned, collective or disaggregated decision making,

which is when you have a lot of semi-autonomous actors who all make their own decisions.

And then the final outcome that we might measure is, is the the collective output

of all those independent decisions. So the quintessential example of this would be a stock market.

And I make the case that these aggregation gains that you see in things like the stock market

allow those systems to process informationally much more efficiently than you might commonly observe

from the deliberative process is neither of them are perfect. There are still cognitive frictions that act on both

the collective and the deliberative decision making. But the collective decision making can

circumvent that to some extent. So your dependent variable here is instability or policy

punctuations however you want to say it. Why is this dependent variable that we should care about? What’s there? The

why does it matter that we can predict when some systems will be more stable and some will be more unstable?

Yeah. So I mean there’s there’s a couple of answers to that. One is is simply that’s what one of the things you’re

interested in and as political scientist and it actually tells us, I think a lot about sort of fundamentally

how do governments operate? Are they meticulously updating in response to new information

or are they surprised the lot? And when we observe a system that is producing a whole lot

of punctuations, a whole lot of Stacie’s, that would appear to be a system that is

surprise a lot, which is to say that problems are getting better or worse. But those

those changes in the problem streams are not being smoothly translated into policy outputs.

And so I think it speaks directly to the kind of governance that we receive and what we can expect

from government. It doesn’t mean that government can’t solve problems, but we should be realistic

about government’s ability to to quickly adapt the problems. And there’s lots of examples. So there’s there’s

there’s tons of problems that we can identify and we say, why isn’t the government doing something about that?

And but but that to a large extent, is part of the system. And so that’s what the book is actually

looking at, is trying to understand under what conditions could the government perhaps respond more quickly to things

that we might identify as problems, things like climate change, things like immigration. These are issues that for a lot of people

are calling out for some attention and and they’re not getting them. And so this book tries to answer,

well, why might that be the case? So how does the discussion on

collective decision making coming to us? Right. So the collective decision making so this

is a literature on punctuated equilibrium that had focused on basically whatever type of governmental

system we would observe this same dichotomy between status and punctuation. And that

was it was such a reliable finding that I think they they published a bunch of people, published

an article called The General Empirical Law of Public Budgets, which was simply saying that that

budgets fall when no matter where you look at what level, what country they fall. This punctuated equilibrium pattern.

A lot of small level changes, a few really big ones. So that’s unusual. You don’t find a lot of political scientists published

an article called The General Empirical Law. We usually say that for, you know, the natural sciences.

And so there was this big question out there, what is there anything that can kind of get around this? Is there any area

where we see less of a dichotomy between spaces and punctuation? And I think that the collective

decision making offers us perhaps our best bet on on that regard. So when you look at

distributions of changes coming from these collective processes, you tend to find a much lower

level of punctuation than you do from your typical deliberative process. Now, that’s not to say the

punctuations never happen. And we know this from the stock market. I mean, the housing market collapse,

that’s a punctuations stock market, but that kind of thing is less common from your collective systems

than it is from your from your deliberative system. You have a whole chapter

testing different systems or situations with this collective decision making.

You summarize those a little bit, right? So so the first thing I wanted to do and this might actually be

the next chapter in the book, but then the one you’re talking about. But for someone to judge thinks in between. Oh,

a lot of people, when they hear sort of market systems of collective decision making, they think will private firms.

And so they think, Wilson, should we just privatize government services? But I want

to carefully make the point in the book that the decision making that takes place within a firm

I would consider deliberative. Those are decisions that are about how we are going to allocate resources that would

take place in a board room that’s going to that’s very different than the kind of decision making we would observe from a market,

which is a bunch of quasi independent investors trying to make some money. And so

I was trying to look at how can government integrate not so much privatization,

which I think is different by market systems. And so look at a few instances

of deregulation. So, for example, the deregulation of airlines, I spent quite a bit of time talking

about regional cap and trade programs, which is the government trying to sort of impose a market collective

on a policy output. And then the biggest example is is is monetary policy

and exchange rates. And this is this is obviously an important area of of of

policymaking. Exchange rates are important in some countries like like historically China

has been has sort of artificially held their exchange rate a certain level. And so they would decide

within the Chinese politburo what level they think is appropriate for their change rate to try and

achieve whatever economic goals they might have. And that is is different than a country like the

United States, which lets their exchange rate fluctuate freely on the market. And you observe a really

profound difference in the distribution of changes, depending on whether you’re looking at the free floating

currencies like the United States and a lot of the Western democracies versus the countries that are artificially

manipulating their exchange rates. So they thought this was an important

chapter because even having identified this collective decision making, it doesn’t necessarily mean there’s a huge

role for it in policymaking. And so I wanted to illustrate that there are some key areas where where

it can be a big part of the process in that Chapter 8. You

you also analyze the difference between the decision making a public firms versus private firms or

republic organizations versus private organizations and different types of those organizations. And what you show is that

in terms of expenditures for when you’re comparing, for example, private colleges versus public

colleges or you’re comparing the United States postal system vs. U.P.S. and FedEx.

There’s no difference between in the distribution of changes for those private firms.

So this feels like a fairly profound and important finding. And I’m curious. I mean,

are you taking a shot at Adam Smith right here? Right. Is this used to saying that the invisible hand might not be that

that the information conveyed from the market to firms does not produce

efficient outcomes or more efficient outcomes, then allow the privatization

people, people who support privatization tend to I tend to believe no, definitely nothing. Not doing

anything as ambitious as taking shots at Smith. I actually I’m actually a big believer in the book with the

efficient market hypothesis. And I think that’s. I mean, the reason that you find fewer

punctuations from markets is because I think they are informationally efficient, that that fits pretty

directly with the distinction I’m trying to make between collective decision making in deliberative

ones. But the point is simply that the firms are firms maybe publicly traded on a market,

but that’s still the way that they’re going to allocate resources within the firm. That’s not necessarily a

collective process. That’s the same type of process. Whatever goes on in their boardroom, presumably some sort

of deliberation. And so the point I’m making in that in the book is that those conversations

that are happening in the boardroom are not necessarily any more informationally efficient

than what you would find. In the public service. And so when we compare

areas where there’s both areas of the economy, which is both a government service like mail delivery

and also private service like FedEx, we find that we find about the same level of punctuations in how

they’re spending their money. In both of these both of these areas. But it does imply that, for example,

I might not see many gains in efficiency if I decide to privatise a service. Oh, absolutely. Yeah.

And so that’s I think the book is pretty skeptical. And I want to be clear, I’m just talking about, you know,

this is a huge literature and I’m just talking here about informational efficiency. So there may be a major

argument for privatization that relies on on other areas. But I think there’s there’s no real

clear argument that that firms, at least for now, have shown the book that firms are going to be

inherently better at processing information than governments would be.

And and I think that’s because both of them are relying on this pretty deliberative way of allocating resources.

Now that, you know, it may be that if we look at the areas in which firms are involved,

that those tend to be less complicated areas. And that’s an argument that’s been made as a government. Maybe

it looks inefficient because we give government all the hard problems. That’s why we have government

in the first place. So I can’t rule that out. But I can’t say that when you compare something with the same industry

where both the government and the firm is involved, it doesn’t look like in terms of their ability

to process information, the private sector is doing any better. So higher education is a great example of that.

And you see, if you look at how private universities are allocating their budgets, you see

actually it’s an even more pronounced dichotomy between doing nothing and then making really radical

changes. Then you see at public universities, you do want to come back to this

public university and education example. First, though,

can you explain efficiency? Because I think that can mean a lot of things, right?

Yeah, that’s a good point. And so I’m pretty clear I want to be clear in the book early on that when I’m

talking about efficiency, I’m talking about informational efficiency. And this is a rather abstract

concept. But it basically what it means is, is how good is this system at processing

information? And so when people refer to things like the efficient market

hypothesis, what they mean is that markets are very good at translating relevant

information about buying and selling assets into actual values of those assets.

So it’s a pretty smooth translation of information and we think that that doesn’t really happen

in governmental systems to the same degree. And so that’s what we mean. When I when I say efficiency, I’m just simply

meaning that the informational efficiency, that translation of of informational inputs into

policy outputs and there’s no efficiency has nothing to do

with any normative arguments that good or bad policy. It’s simply about the

ability to process this information. Yeah. Insofar as I look in the book, I think it’s

not too much of a stretch to make a normative argument. I mean, I think given the choice between more

informationally as efficient systems and less informationally efficient systems, we would choose

greater efficiency. But there may be tradeoffs. I mean, governments do a lot of complicated.

Governments are concerned with things like justice and fairness. And and they’re not just China be the most efficient.

They’re also trying to be the most equitable and things like that. And so if there’s tradeoffs there, well, then we

would have to take those seriously. Yeah. This comes up a lot and studies are punctuated

equilibrium. And I think I’d almost take a stronger, stronger stance on it. So I look at the city of Austin.

Steve Austin, we’ve we’ve had tremendous economic growth over the last 10 years or so. And as a result,

we have a transportation problem. We don’t have enough roads. And if 10 years when we started to see

that trend developing, the city of Austin had reacted, you know, with the distribution of changes available

to it and begun building roads, we wouldn’t have as much traffic as we have right now. And you can see this come up in

area after area. So, I mean, I think I think we can say that efficient, that there is a level of efficiency

here and maybe, maybe we shouldn’t expect a perfectly normal distribution changes. But, you know, we weren’t

some of the states you’re looking at are very, very far from normal in terms of their budget and their budgetary

changes at least. Yeah, that’s a great point. And I didn’t mean to suggest that there I think there really are major

consequences to these things. The question and you raise this is to what extent

can we be hopeful? I mean, how many reforms can government actually put in place that are going to allow them

to do better at this? Because really they do have even even a local government has a pretty difficult

job when you consider all the problems they could be attending to. And I think there is a certain degree of natural

complexity that makes it very difficult. Now, that said, I think

and this is one of the things I talk about in the book, you know, we do have to look at policies

or institutions like nonprofessional legislatures. And I think

we do have to seriously consider what does that mean for for a state like Texas? Our ability.

Ability of our state legislators to sort of anticipate problems and respond to them

maybe ahead of time where as they’re happening and one of the things I show in the books is that the states that have the

nonprofessional legislatures, you actually do tend to see more punctuations,

which would which appear to be sort of overcorrection. So let me ask you about that really quickly,

because one thing I think about with Texas is that although we have a nonprofessional legislature,

we also have an incredibly powerful executive branch. The executive branch’s power is not not nested

in the governor’s office. It’s nested in a series of elected officials. So he is there like a hidden tradeoff that that

that exists in some of these places where you the system is adjusted to to find that capacity

elsewhere. Yeah, that’s a good point. And so that’s that goes slightly beyond the scope of the book. But

I think that is the natural thing that happens is that there is a certain whether you have a

nonprofessional legislature or not. You know, the problems are the same. And you’ve got to figure out a way as a

responsible government to try to solve those problems. And so that may mean you put more power in the hands of the

executives. Another thing that it’s typically meant is that for the states with the nonprofessional legislatures

that you have more power with, with interest groups, or at least they have more control over the information

that is being received and processed by legislators, because it’s simply the legislature might not

have any independent research capacity which makes them quite rely on whatever interest groups

want to tell them. Tell you this in a slightly different direction.

One of the things in your. Chapter on pathologies

of decision making may not be exactly the title, but because

you actually have a you have a. You do a quick study

on presidential elections that. I thought I had some interesting

implications. Do you want to summarize? Sure, yeah. So what I do in

the chapters is I look at elections as being one of these types of political

decisions where you see where it may be. Here is closer to the collective decision making

model than the deliberative one in the sense that the electoral outcomes are the result

of millions of independent voters making their own semi-autonomous decisions. And then we aggregate all that together

to figure out who wins the election. And then now that’s not obviously exactly like the stock market, but it’s closer

to that than the type of deliberation that would typically take place within the legislative

session. And so what you see is that electoral changes and two party vote over

time, these tend to be relatively stable, normally distributed. And again, not not

a whole lot of punctuations, which would indicate that there is some degree of informational efficiency when we

aggregate out and look at election electoral systems.

I mean it, but your book seems to indicate that it’s not completely

normal, that presidential elections specifically do actually seem

to have some collective decision results,

which to me seems to imply that there’s actually a moderate

a moderating effect for the debate process.

You mean the presidential debates? Yeah. So if it’s deliberative. If

they kind of counter to this is deliberative decision making, which is everybody kind of

talking about it. I think it’s very I think the book is all about relative

the grids of informational efficiency. I don’t think any of our systems, any human system is going to reach perfect

information efficiency. The market isn’t it’s not the perfect efficiency market

hypothesis and even the market doesn’t get there. I think certainly presidential

elections don’t quite get there either. And the big problem we have there and to a somewhat lesser

degree with the market is that, of course, voters are not. Independent actors were

are highly influenced by by what our peers are doing, and that means that we are susceptible

to the type of herd mentality and this is the same type of mentality that may create a market bubble. Now, I don’t

know if anyone’s directly sort of used that analogy in terms of presidential races, but you could see the same type of phenomenon there.

So I don’t mean to imply that any of these processes are perfectly efficient, but it’s just that we see

fewer or less of this dichotomy between spaces and punctuation than we would when we’re looking

at government systems. So we can move on to talk about your conclusion in

case you got a few questions here. And I’ll just want to start off with that. Another just an overall question

here. Is deliberation bad? No deliberations. It’s not bad. It’s not. I think,

in fact, deliberation is is basically inevitable. I mean, there’s a lot of decisions

that we have to make that are not simply going to be solved. There’s just simply no collective mechanism

that we could impose over them. And so I think, you know, you lose some informational efficiency,

but it is fairly unavoidable. In the book, I talk a little bit about like, well, what would a system

of like budgeting that was based on collective decision making look like? And you could imagine that you

allow every member of Congress to allocate some certain amount of funds and then the total

budget is just all those allocations put together. And so then each member of Congress would have

to make very strategic decisions about how do I want to allocate my portion of this budget.

I don’t know. I don’t think the federal government is going to test that experiment anytime soon. But it be

interesting to look at what that kind of process would look like. But I do think realistically

the role for collective decision making, I think it’s important to recognize the informational

gains that can be made through this type of decision making. But I think its role in setting public policy

is is probably always going to be somewhat circumspect. Now, with that said, things like exchange rates,

I mean, that’s some serious policy. I mean, that’s an important chunk of the economy.

And so it’s not that it’s zero, but it’s not like we can replace all deliberative decision making with

with a more collective process. So this example you just gave on

the budget. Is it? Is that do you imagine? And this is, of course,

an experiment in a theoretical experiment at this point. But

do you think that would work with policy as well if all the members kind of separately

came to a conclusion? Celera’s is hard to envision what that would look like. I mean, the budget,

you can sort of imagine it because, you know, it’s it’s it’s dollars. It’s quantitative

as a policy. You have you cannot say abortion policy. It’s you couldn’t

you couldn’t use collective decision making because it’s all about, you know, what is what is fair, what is

just is right. And so I think you’re not going to replace

it. There’s there’s a major is obviously a major role for deliberation in the way policy is made.

So that’s I mean, that’s that’s one of the lessons of the book. And, in fact, not just the book, but sort of this this entire field of literature

is that to some degree that these, you know, respecting the system, these punctuations. And so we just have to sort

of recognize them for what they are and and realize that this is a limitation

of governance to some degree. I think the

one of the last questions that I kind of have for you is

what what is the most compelling question that formed for you as you were writing this book or

as you finished this research? Yeah, that is a good question.

Yeah. The most compelling question that form for me, I think

is it’s just this question of of how much do we want our governments

to engage in information and what the consequences are of

maybe turning away from information one. And this isn’t a trend to talk about in the book, but

it’s true is that we’ve seen sort of a decline in the analytic capacity of government

and a decrease in what might be called technocratic policymaking or

honest numbers policymaking and a rise of more ideological policymaking. And so I

think it’s interesting to consider what that kind of shift moving away from an information based model,

what that means for our policies, but substantively, normatively, but also

how our policy is going to change over time. And you imagine that we might end up with a government that is surprised

by sudden policy crises more often than than we might have had otherwise.

Derek, thank you for joining us, everybody. The book is The Structure of Policy Change. I highly recommend it.

And we will we’ll put all the links in the descriptions for this podcast to that book. Katie,

thank you for joining me as well. And this has been your Policy Agenda podcast. Thanks for having me. It’s

been great.