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Bounded Rationality and Policy Diffusion:
Social Sector Reform in Latin America
Kurt Weyland

Runner-Up in the Twelfth Annual Robert W. Hamilton Book Awards

Paperback | 2007 | $38.95 | £32.95 | ISBN: 9780691134710
312 pp. | 6 x 9 1/4 | 2 line illus.
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Why do very different countries often emulate the same policy model? Two years after Ronald Reagan's income-tax simplification of 1986, Brazil adopted a similar reform even though it threatened to exacerbate income disparity and jeopardize state revenues. And Chile's pension privatization of the early 1980s has spread throughout Latin America and beyond even though many poor countries that have privatized their social security systems, including Bolivia and El Salvador, lack some of the preconditions necessary to do so successfully.

In a major step beyond conventional rational-choice accounts of policy decision-making, this book demonstrates that bounded--not full--rationality drives the spread of innovations across countries. When seeking solutions to domestic problems, decision-makers often consider foreign models, sometimes promoted by development institutions like the World Bank. But, as Kurt Weyland argues, policymakers apply inferential shortcuts at the risk of distortions and biases. Through an in-depth analysis of pension and health reform in Bolivia, Brazil, Costa Rica, El Salvador, and Peru, Weyland demonstrates that decision-makers are captivated by neat, bold, cognitively available models. And rather than thoroughly assessing the costs and benefits of external models, they draw excessively firm conclusions from limited data and overextrapolate from spurts of success or failure. Indications of initial success can thus trigger an upsurge of policy diffusion.


"[An] important scholarly polemic...An advocate of in-depth case studies and cognitive psychology, Weyland examines the recent waves of reform of pension and public health-care systems in Latin America...As demands for social justice grow in Latin America, Weyland's formidable findings will take on particular urgency for both theorists and practitioners alike."--Richard Feinberg, Foreign Affairs

"The author's systematic comparison of four potential explanations of policy diffusion breaks fertile ground in its realistic treatment of policy making. Weyland convincingly parries fashionable explanations centered on external imposition and constructivism."--C.H. Blake, Choice

"This is an interesting and illuminating book, which will no doubt make an important contribution to our understanding of social sector reforms in the region and elsewhere. Some of its findings challenge widely held views. . . . The operationalisation of bounded rationality perspectives in a cross-national policy reform context will make an important addition to the toolbox available to researchers."--Latin American Studies


"Where do new policy ideas come from? In this important book, Kurt Weyland provides an answer that satisfies both theory and practice; his findings cross disciplinary boundaries with aplomb, insight, and superb analysis of policy decision-making."--Merilee S. Grindle, Harvard University

"This is a very innovative and fruitful work that accounts better than other approaches for the crucial economic policy decisions studied by Weyland."--Guillermo O'Donnell, University of Notre Dame

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Table of Contents:

Preface vii
Abbreviations xi
Chapter 1: The Puzzle of Policy Diffusion 1
Chapter 2: Toward a New Theory of Policy Diffusion 30
Chapter 3: External Pressures and International Norms in Pension Reform 69
Chapter 4: Cognitive Heuristics in the Diffusion of Pension Reform 97
Chapter 5: External Pressures and International Norms in Health Reform 142
Chapter 6: Cognitive Heuristics in the Diffusion of Health Reform 181
Chapter 7: Bounded Rationality in the Era of Globalization 215
References and Interviews 239
Index 283

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