Revisiting the contextual orientation
Theories of policy design and instrument choice have gone through several ‘generations’ (Goggin et al. 1990; O’Toole 2000) moving from the analysis of individual substantive instruments (Salamon 1981; 2002) to comparative studies of procedural instrument selection (Howlett 1991; Bemelmans-Videc 1998; Peters and Van Nispen, 1998; Varone 2000) to the study of policy mixes (Evers and Wintersberger 1990; Braathen 2005; Bode 2006; Howlett et al. 2006). While each generation has increased the complexity of the analysis, the central assumption of all these generations of theory is that the policy design process and its outcomes are ultimately shaped by contextual factors related to state capacity in the face of different levels of social complexity (Atkinson and Nigol 1989).
Example: Studies have noted how financial instruments should be used – indeed, can only be used effectively – when there is a high level of state fiscal capacity or ‘treasure’ resources and target groups are willing to respond to financial cues and change their behaviour accordingly. Similarly, when a state faces a large target it will be forced to utilize greater organizational, financial and/or treasure resources than would otherwise be the case (Tupper 1979; Laux and Molot 1988; Eisner 1994; Vogel 1996; Hall and Banting 2000).
However, more recent studies of policy design have attempted to move beyond these kinds of contextual statements to integrate instrument studies into studies of policy regime logics and especially governance modes. These studies suggest that, because arrangements like governance modes typically change only very slowly over time, patterns of government instrument choices tend to exhibit a surprising amount of similarity within policy sectors and over time (de Vries 1999; 2002; 2005).
A focus on relatively long-standing structural or institutional factors in the policy formulation process which affect state capacity and network complexity helps to explain why long-lasting patterns of instrument choice exist at both the sectoral and national levels. These studies have also underlined the key role played by policy experts at the policy formulation stage of the policy-making process who ensure policy alternatives are developed which accord with their conceptions of feasibility, focussing on governance norms and contextual dynamics. Policy experts, as guardians of knowledge and ideas about the appropriate relationships existing between policy tools and governance modes, occupy key positions in policy advice systems and play a key role in influencing policy formulation in such a way as, normally, outside of periods of turbulence in governance ideas and policy regimes, ensures continuity in favoured policy designs.