Does the institution actually change? An exploratory study on policy idea and policy competition

1. Introduction

The government continues to announce new and changed policies. Disasters and social problems often trigger new policies, and these issues are included in policy reports as issues to be resolved annually. These policies change depending on the political and economic, environment and policy change while the government is in the process of correcting their errors. But is this real change? For example, in the case of an entirely self-contained vehicle, the performance design of the car may be changed, but some functions may be only included temporarily or disappear in later model. Could policy change be similar? However, studies that have analyzed policy changes have been approaching the premise that they viewed narrative as case studies or as intermittent events and change. This study investigates whether there is actually policy change.

Annually, the Korean government announces “economic policy directions”, which cover the macroeconomic conditions (including economic growth, prices, employment, domestic demand, imports, and exports) and policy issues to be pursued during the year. These economic policy directions should be the result of the rational efforts of policy elites who intend to review the domestic and foreign policy environments comprehensively and improve the efficiency and raise public interest in the entire national economy. However, in reality, the policy elites are faced with innovation pressure to make the economic policy direction report look new and different from previous report, and if unsuccessful, they must endure criticism from the press for ‘rehashing’. Despite the absence of rapid changes in the economic policy environment, it is necessary to reproduce an economic policy direction that sufficiently differs from the policy packages that were built up in previous years. In other words, policy elites are not competing with other economic entities, but with their own ideas from the past.

This study starts from the question of how economic policy direction changes regularly and intentionally every year in a stable macroeconomic environment, and then asks how these changes can be explained. According to classical institutionalism, without a strong external economic shock, policy elites will not be tempted to change policy packages by going beyond institutional channels. Other than internal policy ambiguity and gaps in the institutional components, there is a limit to justifying the annual changes to the policy package (Campbell, 1998; Greif & Laitin, 2004; Orren & Skowronek, 1994; Streeck & Thelen, 2005). In addition, there is difficulty in considering the direction of economic policy because of private interests between the policy elite and interest groups as actors, and it is not easy to explain why policy elites prefer regular changes to the policy package.

This study aims to approach these questions from the ideation perspective that theoretical importance has recently been emphasized. It involves the process of identifying the role of the idea that triggers mechanism that policy change always occurs even when there is no demand from interest groups and environmental change, and the process of competition between different policy alternatives at the agenda setting stage through ideas. To do this, this research determines whether the direction of the economic policy announced annually is changed or fixed in terms of concepts or ideas by analyzing unstructured data. While institutional research has preferred a narrative analysis based on qualitative data, this research focuses on analyzing the phenomenon more objectively by using the method of extracting and analyzing meaningful data through computer operation. Computer-based research (Orren & Skowronek, 1994) can complement traditional social science methodologies, such as helping to identify patterns or rules in unstructured data, and it can also contribute to complementing the ‘absence of a microscopic framework for macroscopic phenomena’.

This study analyzes economic policy direction reports by using a text mining method that is one of the unstructured data analysis techniques. In short, using the analysis of economic policy directions, this research explores whether the ideas of policy elites continuously change and examines what these changes mean from an institutional perspective.

2. Theories of institutionalism

The theory of institutionalism emphasizes the importance of both formal and informal institutions and contexts as an alternative to morphological, pluralistic, and rational choice theories that understand phenomena based on a microscopic analysis of human behavior (Orren & Skowronek, 1996; Streeck & Thelen, 2005). As institutions attempt to verify organizations, and the individuals who populate them, are suspended in a connection of values, norms, rules, beliefs, and assumptions are regarded as natural, that are at least partially of these individuals’ own making (Barley & Tolbert, 1997). Institutional research in organizations particularly emerged as some variables of institutional theory, like institutional emergence, conformity, conflict, change, isomorphism, processes that establish schemas, rules, norms, and routines that treat organizations and managers as rational actors. However, early institutionalism focused on historical context has contributed to explaining that the political and economic structure constrains policy and institutional contexts influence the specific shape of the policy, however it is limited to theorizing what policies are selected and changed in uncertain situations. In relation to institutional change, early institutionalism has been described as punctuated equilibrium (March & Olsen, 1996; Mehta, 2010), in which institutions are changed by external shocks, such as war and economic crisis. This is helpful in explaining the sustainability and stability of the system, but it does not provide an adequate answer for gradual changes. To overcome these limitations, institutionalism has focused on the endogenous changes that can be triggered by the interdependence of institutional components and internal contradictions (Campbell, 1998; Greif & Laitin, 2004; Orren & Skowronek, 1994; Streeck & Thelen, 2005). It is possible to explain an endogenous change as it begins to regard the system as an orderly and unintentionally designed single unit, but as the various components begin to regard it as a complementary united complex at a time interval. In other words, the institution is composed of various components formed at different times and the contexts are in a conflictual or complementary relationship, so that gradual change can occur without any external impact.

On endogenous changes, Campbell (Campbell, 1998; 2004; 2005; 2007) explains them in terms of bricolage and translation. Changes by bricolage, which involve adding and reassembling new components, appear in the form of path dependence where the old system continues to exist, and these new components are merged with existing systems through interpretation. Orren and Skowronek (Orren & Skowronek, 1994; Orren & Skowronek, 1996) argue that institutions as composites have a no simultaneity of institutional formation in which heterogeneous institutional elements overlap according to the needs at that time, triggering institutional change. (Greif & Laitin, 2004), who maintains a similar stance, argues that institutional change occurs at an institutional refinement level that reinforces the existing system, not by the introduction of a completely new system, because the legacy of the former system constitutes the initial state of institutional change.

If an institution (as a complex system) changes as it is rearranged and reunited among the interdependence and conflicts of the internal components, it is necessary to discuss how the actors who perform it bind the components together. The ‘idea’ has provided a starting point for such discussion in recent years. In the study of institutionalism ideational processes are regarded as impactful to policy change. The processes help to construct the problems and issues that enter the policy agenda. The ideational processes also could shape the assumptions that affect the content of reform proposals related to policy. In short, ideational processes impact the ways policy elites perceive their policy interests and the political environment in which they mobilize (Béland, 2009). The processes are not only catalyst but also variable of policy change.

The idea is to provide a conceptual framework that can bridge the gap between actor-centered explanations and institutional constraints. Under the uncertainty of complex reality, the idea plays the role of a filter for what to recognize as a policy problem and a direction for how to respond to perceived problems (Bradford, 1999). By introducing the concept of ideas, it became possible to correct the “bias of macro-structure”, which was held by institutionalism, and to provide a mechanism for link the relationship between actors and institutions.

Despite the theoretical usefulness and role of ideas, discussions about the definition and types of ideas are emerging in various and multi-layered ways. For example, Campbell (Campbell, 1998) considers the normative aspects of historical institutionalism and the cognitive aspects of organizational institutionalism and suggests ideas as programs, ideas as paradigms, ideas as frames, and ideas as public sentiments. Mehta (Mehta, 2010) presents three types of ideas: policy solution, problem definition, and zeitgeist reflecting public philosophy. In sum, the ideas are divided into three categories: program, paradigm, and public sentiment.

The program idea is a concrete solution for solving the current policy problem and it has the technical and professional characteristics of problem solving. The paradigm idea is a theoretical assumption or a view of the world that suggests the macro direction of policy, and it serves as a criterion for limiting how the policy elite perceive the problem and the range of acceptable solutions. The public sentiment idea means the standard of judgment or recognition of the general public about the problem solution. Program, paradigm, and public sentiment ideas are more likely to be accepted as policy because they are more consistent. On the other hand, if the policy elite’s solution to the problem is judged or if it goes against the general public’s perception, the possibility of adopting it as a policy becomes low. If only the constraints of the institution in relation to the relationship between ideas and institution are emphasized, then the possibility that different outcomes may occur under the same institutional context will be neglected. There has also been a lack of explanation about why the actors adopt a policy. An explanation that links ideas, institutions, and actors is necessary. Genieys and Smyrl, 2016 argue that programmatic elites who share specific policy ideas compete for ideas to gain more support, and that the idea of a particular member of the elite being accepted through such a competition drives institutional change. According to Genieys and Smyrl, 2016, the state consists of a plurality of policy elites who share specific policy ideas, and they compete for ideas to acquire and maintain legitimate authority. Policy rivalry continues to seek change because of the competition for ideas to dominate the cognitive and normative framework, therefore policy changes occur even when there is no demand from the outside and the institution is stable.

As mentioned above, the significance of ideas in institutional research was examined. The idea is useful because it links the institution as a mechanism and the actor as a policy selector, and it allows us to understand why specific choices are made under specific circumstances. An idea has two-sided effects as dependent and independent variables that trigger institutional change, and it contributes to developing a medium-sized interface of micro- and macro-action choices. As mentioned earlier, there are various types and classifications of ideas, such as monetarism (Hall, 2001), neoliberalism (Bradford, 1999), capitalism diversity (Campbell, 1998; Hall, 2001), supply-oriented economic trends, and public sentiment ideas. As a result, the boundary between the institution and idea is mixed, and the explanatory power of the idea is degraded. To emphasize the conceptual difference between institution and idea, it is necessary to reduce the unit of analysis.

When the technical tools in science field were eased to social science research, technical analysis tool such as text mining analysis enables to study the socio-economic implications and the influence of institutions empirically. Furthermore, sociological thought on the link between institution and action to outline a theory of organizational structures by altering institutionalized roles and patterns of interaction.

What is required is a systematic exploration of the relative importance of behavioural and interpretive phenomena in the institutionalization process and, on the basis of such exploration, the fashioning of a set of methods that are sensitive to and systematic about documenting both cultural and structural dynamics (Barley, 1986; Barley & Tolbert, 1997) .

So, in relation to ideas and institutional changes, Genieys and Smyrl (Smyrl & Genieys, 2016) argue that various government departments or agencies compete for ideas to gain legitimacy, which may change policy in a stable administrative environment. This assumes that a plurality of elite groups is competing, and it is necessary to expand the discussion as to why a single institution or single elite group continues to generate ideas. In actuality the organizations, and the individuals who populate them, are suspended in a web of values, norms, rules, beliefs, and taken-for-granted assumptions that are at least partially of their own making (Barley & Tolbert, 1997).

Each sector of the government is generating policy ideas independently under their own functions and powers. In a single organization, efforts to differentiate ideas are continuously being carried out, and empirical research is needed to analyze them.

3. Method

4. Results

After deconstructing the economic policy direction reports into words, it is clear that the policy elites changed their policy ideas intentionally and regularly to differentiate them from the policy packages they built in the past. The results verify practical and theoretical contribution in institutionalism. Unlike the claims of Geniyes and Smyrl, 2016 that multiple policy elite groups compete for superiority of the cognitive and normative framework, policy elites continue to change their ideas. Differentiation from past ideas is reflected in the combination of continuously of detailed ideas with the dominant policy ideas, and this combination has always occurred, even when the external environment is stable.

This research also extends methodological perspectives in institutionalism analysis. It applies empirical text analysis to verify the relations between policy idea and policy change. Based on the results of this study, the indications of the research are as follows. First, the economic policy direction report forms the basic framework of the idea by centering on a few key words that appear repeatedly, such as “enterprise”, “market”, “investment”, “expansion”, and “support”. For example, the 94 words common to all 24 of the analyzed reports were used 27.95% on average, and the 7,005 words appear in only one report which accounted for 10.8%. In other words, while retaining the key elements of the idea, the new idea elements temporarily are introduced, emerge, be rearranged, or disappear according to the circumstances. This shows that the words as ideas are constantly re-emerging or mixing in competition with each other.

Second, the policy elite changed the policy direction by replacing about one-third of the economic policy direction report with the new words by introducing new policy words, and the remaining two-thirds contained previous words. The percentage of new words compared to the previous year varied from 60.23% at the maximum to 24.38% at the minimum. The policy elite emphasized the difference between past and present by reordering, collapsing, removing, and reproducing ideas, and the new policy package was trimmed to fit the economic situation. This is regarded as an intention to preserve the legitimate authority of the policy elite on a regular basis every year by differentiating themselves from the policy elite that produced the policy package in the past rather than engage in a competition of ideas with other policy elites or economic actors.

Third, if one-third of the previous economic policy direction report is replaced by new words without restrictions, it is completely new. However, the policy elite constrained the change to a certain extent so that the economic policy direction would not radically deviate from the overall path due to the accumulation of differences from the previous report. Based on the 1993 economic policy direction report, the economic policy direction reports during 1993–2016 maintained a policy package change of 53.28% on average compared to 1993. The limitation of this idea is that words are selected and rearranged within the scope of paradigm ideas and public sentiment ideas (Bradford, 1999), and words are interpreted as being selected within the institutional framework of the liberal market economy. Institutions limit their ideas, and paradigm and public sentiment ideas are considered as constraining program ideas.

Fourth, the differentiation of the idea was related to the presidential term. In the early part of each presidential term, the policy elite modified the words of the economic policy direction in accordance with the presidential agenda and the commitment of the president and decreased the extent of the change toward the latter half of the term. For example, in 2004, the first term of the Roh Moo-hyun administration, the new word rate was 33.8% compared to the previous year, but dropped to 25.2% in 2008, the last year of the administration. The direction of economic policy has been coordinated and adjusted according to the presidential term rather than influenced by exogenous economic conditions. The policy elites produce a report on the economic policy direction at the time of the presidential election in order to recognize and maintain their legitimate authority separately from the president or the authority party. However, this study could not confirm how the reorganization of government related to the Ministry of Strategy and Finance, which took place during the inauguration of President Lee Myung-bak, was related to the idea change.

Fifth, although the economic policy direction report is related to the economic policy of the year, it is difficult to find meaningful relevance between economic growth rate and new word rate. As economic growth slows, policy elites are expected to create a new policy package, however the actual new word rate is below average and the new word rate is rather high at the time of economic growth. The policy package reflects the economic situation, but shows that a new idea does not necessarily depend on economic conditions.

Through the micro approach to institutional analysis, this study explored the formation, change, and persistence of program ideas as manifestations of the intentional and strategic efforts of policy elites. The results provide empirical support for recent scholarly efforts that are focusing on the perceptions and ideas of actors as well as the interactions and conflicts of internal components in explaining institutional change.

However, the following limitations should be studied in future research.

First, the direction of economic policy is composed of program ideas, and it should be further discussed whether it is reasonable to assume that program ideas can be broken down into words. For the simplicity of research and the ease of text mining analysis, the economic policy direction was considered as a program idea, but the economic policy direction should be regarded as containing policy ideas and public sentiment about macroeconomics. These comprehensive parts need to be reinforced by descriptive and qualitative research.

Second, whether the economic policy direction report is suitable for analyzing the differentiation of ideas can be argued. Although the economic policy direction report contains the economic policy of that time, it is necessary to make a logical complement to the existing research that analyzes macroeconomic characteristics, such as monetary policy, neoliberalism, capitalist diversity, and supply-oriented economic trends (Campbell, 1998; Hall, 2001). In other words, it is necessary to agree on whether it is appropriate to microscopically analyze macroscopic phenomena.

Third, there is ambiguity as to whether a program idea is restricted by the institution or if it can function as an independent variable to trigger institutional change such as politicians’ power to justify how the activities of politicians shift to stay their interests. In addition, president’s agenda is also important variable because it affects idea and causes policy change. So, it is necessary to establish the relationship between the institution and the idea, and future research on understanding the pure influence on the idea system should be carried out. In addition, in-depth empirical studies are needed on the effect of change by the government organization as an institution or by the actor as an institution as they relate to idea change. For example, complementary descriptive and content analysis could be helpful to explain the results of the quantitative phase, such as quotes of the most representative parts of the reports.

Despite these limitations and needed reinforcements, this study is meaningful in that it discovered the importance of ideas in institutional change and suggested the possibility of linking the changes of actors, ideas, and institutions. The future studies need to further strengthen the current findings by expanding the scope of the documents to consider macro-level concepts as well as relationships and the impact of actors and other policy agenda.